POLYETHYLENE FILM MARKET
Europe: Film extrusion still buoyant / Plastics consumption above 6.5m t in 1999 / Shrink and stretch-wrap film with market share of 20% / Continuing takeover threat / 3-4% growth
More than 20% or 6.5m t of total plastics consumption in Europe goes into polyethylene film extrusion. Deep-seated structural changes during the nineties have clearly left their mark on the European PE film industry, which currently has over 1,300 companies and covers western Europe, the Czech and Slovak Republics, plus Hungary and Poland. Recently, the films sector has been going through a particularly turbulent phase.
It is not only the major corporates like Trioplast Industrier AB (PO Box 143, S-33323 Smalandastener) and Armando Alvarez S.A. (Avenida Pablo Garnica 20, E-39500 Torrelavega/Cantabria) that have been buying up smaller firms in their regional markets. At present, no-one seems to be safe, and larger companies are being swallowed up, too. One example was when the leading central European player on the PE film market, TVK (H-3581 Tiszaujvaros), took over the former leading Austrian stretch-wrap film manufacturer, the present-day Unterland Flexible Packaging AG (UFP, HQ: A-6330 Kufstein), in 1998 – see Plasteurope.com 6, 2000 and Plasteurope.com 20, 1999. Rumours are now circulating in the industry that the European market leader for PE film, the UK-based Polythene Industrie plc (BPI, 96 Fort Glasgow Road, GB-Greenock PA 15 2RP) is up for grabs. The first, but probably not the last, hostile takeover attempt was launched quite recently by the Scottish packaging group MacFarlane Group (21 Newton Place, Glasgow G3 7PY, Scotland) – see Plasteurope.com 19, 2000. The offer price of around EUR 150m was enough to catapult the price of the BPI share following a number of previous setbacks.
AMI industry guide now updated
In the latest edition of its proven market guide, “AMI´s Guide to the Polyethylene Film Industry in Europe”, the British market research institute Applied Market Information Ltd. (AMI, Bristol) gives detailed information on the consequences arising from the most recent market shake-ups, for example with regard to plastics types, processed products and the customer industries.
The guide covers more than 1,300 production companies for PE film in Europe. For the first time, it lists not only extrusion companies in western Europe but also in central Europe to underscore “the increasing importance of this region for the European plastics industry as a whole”. In addition to all the company addresses, the guide also gives e-mail addresses and, where applicable, websites. Apart from this, it also contains market data on the PE film industry for each of the listed countries and regions, e.g. the number of firms and the plastics consumption.
According to AMI, the majority of the European plastics consumption of 6.5m t (1999) is conventional LDPE (approx. 55%), although the consumption of other PE types is continuing to rise. Linear and metallocene polyethylene raw materials now account for 28% of the volumes processed by the film extruders, and the figure is on the up. The most successful markets are shrink and stretch-wrap film as well as industrial coextrusion film, reflecting the mounting demand for film produced from linear and HDPE grades.
The new AMI guide also reports that the stretch-wrap film market has become one of the fastest growing sectors in the PE films industry. Significant investments have been made throughout Europe, and particularly in Italy and Poland. Stretch-wrap film is used for stabilising and protecting pallets, but also increasingly for agricultural silo covers and for protecting rolls of paper. It cites annual growth rates of up to 10%. Other important areas of application are to be found in the building industry and in agriculture, e.g. membranes for moisture insulation, moistureproof roof sheeting, protective silage sheeting and for hothouses in horticulture. These markets are already relatively saturated and subject to the ups and downs of the European construction and agricultural industries.
The largest proportion of PE film manufacturers in Europe is in Italy. According to the British market research company, the increasing size and importance of the Italian stretch-wrap film producers is illustrated by the fact that the country is no longer dominated by small companies. With an average throughput of 4,481 t/y, Italian manufacturers have now advanced to ´middle-sized´ on the European scale. The largest number of small enterprises is now to be found in Poland, while Germany and Belgium have the largest number of large companies in terms of throughput. Italy has the biggest overall PE consumption with 1.3m t, followed by Germany with 1.1m t and the UK with 817,000 t.
According to estimates, the European film extrusion industry will grow over the next five years by around 3 - 4% a year, which would take the market to 7.5m t by 2004. It remains to be seen what the next few years will bring as far as the much maligned profit situation for extruders is concerned, and what the effects will be of the rampant consolidation process in the industry on the one hand and the new possibilities involving e-business in the other.
Book Service: “AMI´s Guide to the Polyethylene Film Industry in Europe”, 6th edition, 2000, 314 pages, DIN A4, bound, price EUR 275.00 + VAT: PIE-No. B 44911.
It is not only the major corporates like Trioplast Industrier AB (PO Box 143, S-33323 Smalandastener) and Armando Alvarez S.A. (Avenida Pablo Garnica 20, E-39500 Torrelavega/Cantabria) that have been buying up smaller firms in their regional markets. At present, no-one seems to be safe, and larger companies are being swallowed up, too. One example was when the leading central European player on the PE film market, TVK (H-3581 Tiszaujvaros), took over the former leading Austrian stretch-wrap film manufacturer, the present-day Unterland Flexible Packaging AG (UFP, HQ: A-6330 Kufstein), in 1998 – see Plasteurope.com 6, 2000 and Plasteurope.com 20, 1999. Rumours are now circulating in the industry that the European market leader for PE film, the UK-based Polythene Industrie plc (BPI, 96 Fort Glasgow Road, GB-Greenock PA 15 2RP) is up for grabs. The first, but probably not the last, hostile takeover attempt was launched quite recently by the Scottish packaging group MacFarlane Group (21 Newton Place, Glasgow G3 7PY, Scotland) – see Plasteurope.com 19, 2000. The offer price of around EUR 150m was enough to catapult the price of the BPI share following a number of previous setbacks.
AMI industry guide now updated
In the latest edition of its proven market guide, “AMI´s Guide to the Polyethylene Film Industry in Europe”, the British market research institute Applied Market Information Ltd. (AMI, Bristol) gives detailed information on the consequences arising from the most recent market shake-ups, for example with regard to plastics types, processed products and the customer industries.
The guide covers more than 1,300 production companies for PE film in Europe. For the first time, it lists not only extrusion companies in western Europe but also in central Europe to underscore “the increasing importance of this region for the European plastics industry as a whole”. In addition to all the company addresses, the guide also gives e-mail addresses and, where applicable, websites. Apart from this, it also contains market data on the PE film industry for each of the listed countries and regions, e.g. the number of firms and the plastics consumption.
According to AMI, the majority of the European plastics consumption of 6.5m t (1999) is conventional LDPE (approx. 55%), although the consumption of other PE types is continuing to rise. Linear and metallocene polyethylene raw materials now account for 28% of the volumes processed by the film extruders, and the figure is on the up. The most successful markets are shrink and stretch-wrap film as well as industrial coextrusion film, reflecting the mounting demand for film produced from linear and HDPE grades.
The new AMI guide also reports that the stretch-wrap film market has become one of the fastest growing sectors in the PE films industry. Significant investments have been made throughout Europe, and particularly in Italy and Poland. Stretch-wrap film is used for stabilising and protecting pallets, but also increasingly for agricultural silo covers and for protecting rolls of paper. It cites annual growth rates of up to 10%. Other important areas of application are to be found in the building industry and in agriculture, e.g. membranes for moisture insulation, moistureproof roof sheeting, protective silage sheeting and for hothouses in horticulture. These markets are already relatively saturated and subject to the ups and downs of the European construction and agricultural industries.
The largest proportion of PE film manufacturers in Europe is in Italy. According to the British market research company, the increasing size and importance of the Italian stretch-wrap film producers is illustrated by the fact that the country is no longer dominated by small companies. With an average throughput of 4,481 t/y, Italian manufacturers have now advanced to ´middle-sized´ on the European scale. The largest number of small enterprises is now to be found in Poland, while Germany and Belgium have the largest number of large companies in terms of throughput. Italy has the biggest overall PE consumption with 1.3m t, followed by Germany with 1.1m t and the UK with 817,000 t.
According to estimates, the European film extrusion industry will grow over the next five years by around 3 - 4% a year, which would take the market to 7.5m t by 2004. It remains to be seen what the next few years will bring as far as the much maligned profit situation for extruders is concerned, and what the effects will be of the rampant consolidation process in the industry on the one hand and the new possibilities involving e-business in the other.
Book Service: “AMI´s Guide to the Polyethylene Film Industry in Europe”, 6th edition, 2000, 314 pages, DIN A4, bound, price EUR 275.00 + VAT: PIE-No. B 44911.
02.11.2000 Plasteurope.com [17068]
Published on 02.11.2000