Worldwide demand for BOPP film is continuing to grow, despite the Covid-19-related slowdown in certain plastics markets, thanks to the resilience of the food packaging sector, according to a new report from AMI (Bristol / UK; www.ami.international). Growth in packaged foods, which are largely considered to be recession-proof, will continue to be a key driver for future demand for BOPP film. Its main use is as a cost-effective barrier protection.

Growth in demand for BOPP film in food packaging applications will be particularly strong in emerging markets experiencing population growth, urbanisation and rising incomes. Between 2014 and 2019 global demand for BOPP film grew by an average of 4.6% per year to more than 9m t, rising by just over 1.5m t, says AMI.

The BOPP film industry is also facing turbulence as a result of resin price fluctuations, trade tariffs, trade barriers and currency shocks – all affecting working capital and business planning. “Companies are acting more cautiously than in previous years in the face of this economic turbulence and financial risk,” says the report. It notes that the Covid-19 pandemic has exacerbated this, with disruptions of raw materials supply and logistics.

Despite this, BOPP film margins have improved after reaching a low two years ago, as a result of a reduction in over-capacity and more favourable raw materials prices.

The main focus of investment has been China, by far the largest market, for much of the 21st century, says AMI. However, the fastest growth in new investments has been in India. The country has witnessed a near doubling of BOPP capacity in the past five years “driven by the opening up of its retail sector, growth in middle classes and associated consumer spending on packaged food and other goods.” Recent BOPP investments were in large high-speed lines, averaging above 45,000 t/y nameplate capacity.

At the same time, e-commerce is expected to continue expanding its share over traditional retail channels. “This is resulting in rising demand for tapes and label films and has been further accelerated by the Covid-19 pandemic,” says AMI.

Trends aimed at meeting sustainability goals include downgauging and actions to address recycling. However, huge disparities exist between regions in terms of concrete actions. Europe and North America are the most advanced in their approaches to sustainability, which means that companies exporting to these regions need to adapt and innovate to trade effectively in the future, says the report. Simpler films are now perceived to be advantageous and many BOPP suppliers are reacting to capitalise on this trend.

Jindal Poly Films (New Delhi / India; www.jindalpoly.com) and Taghleef (Dubai / United Arab Emirates; www.ti-films.com), numbers one and two on the BOPP world market, are making acquisitions to increase their geographic footprint and extend their speciality portfolios. At the same time, western markets continue to be challenged by the threat of cheap imports and a higher volume of international trade. “Consolidation in the flexible packaging market is also creating more powerful customers,” AMI adds.