Innovative Research and Products Inc.
Home | Consultants | Patent Briefs | Conferences | Reports | Clients | Contact Us | Shopping CartShopping Cart  
iRAP View All ReportsVIEW
REPORTS
 
iRAP Press ReleasesPRESS
RELEASES
 

THE FUTURE OF NORTH AMERICAN ROTATIONAL MOLDING
Publish Date: Jan 2012,   Pages: 110,   Report Code: PL-114
(View Table Of Contents / Buy This Report)

Conventional wisdom suggests the packaging thermoforming business is recession-resistant since almost two-thirds of its output is consumed in the foodservice and food processing markets. What economists are calling “the Great Recession” of 2008-2009 proved otherwise. After registering steady sales growth of roughly 6% over the first 8 years of the decade the value of output from North American companies specializing in thermoformed packaging products fell back 2.4% in 2009. Here in early 2010 growth has resumed. Yet there are lingering effects of the recession in plastic packaging markets as consumers deleverage, restore their savings, and exercise thrift in their spending patterns.

 

In 2002 and again in 2005 PCRS conducted research programs covering the regional packaging thermoforming business. We revisited this field once again here in early 2010 to determine whether the sales setback experienced in 2009 will carryover to any extent into 2010 and future years.

 

We focused on 100 U.S. and Canadian companies with 50% or more of their business devoted to custom and/or proprietary packaging (as opposed to industrial product) thermoforming operations. We were encouraged to find that whereas 55% of the companies participating in our survey experienced a sales reduction in 2009 65% of these companies anticipate a sales rebound in 2010. If “the new normal economy” bears any resemblance to “the old normal economy” of the 2001-2008 period, regional sales of thermoformed packaging products should grow by 3.5% in volume terms and 5.5% in value terms out to 2014. Much will depend on the pace of recovery in the demand for packaging intermediate and final products in non-food-related markets – appliances, aftermarket automotive products, building and construction, housewares, medical products, and so on. The demand for packaging for foodservice and food processing will probably re-establish a prior trend-line growth rate of 2% in volume terms.

 

Partly due to the recession and partly due to the natural evolution of the business, packaging thermoformers confront a different set of challenges and opportunities on both the supply side and the demand side of their business going forward. As for the former the recession claimed some victims, and the pace of corporate consolidation picked up. Yet there remains significant idle capacity. In effect “the pie is smaller”, yet there are just as many “mouths to feed”. So competition is intense as processors seek to penetrate markets other than their traditional customer bases. The recession also reduced many processors’ scope for R&D and ultimately innovation in the short term.

 

On the demand side the packaging thermoformers need to continually respond to the evolving needs of their customers - and their customers’ customers, including the mass-merchandisers. There is pressure to integrate “green” materials into these packages. This is opening the door to biopolymers. A few regional packaging thermoformers are processing polylactic acid (PLA). Yet the common refrain among the officials we surveyed is that customers express an interest in biopolymers, yet they decline to pay the price premium for these materials. At this stage the most economical route to eco-friendly rigid plastic packaging materials is post-consumer and post-industrial recyclate. Recycled polyethylene terephthalate (RPET) in particular is benefiting from this move to sustainable packaging.

 

ABOUT THE AUTHOR

 

Dr. Peter J. Mooney is the founder and president of Plastics Custom Research Services (PCRS). Dr. Mooney holds a Ph.D. in economics from the University of North Carolina at Chapel Hill, and he has covered the plastics industry as a technical/economic market research analyst and consultant since 1981. He is a member of several plastics industry associations including the Society of the Plastics Industry (SPI), the Society of Plastics Engineers (SPE), and the Association of Rotational Molders International (ARMI). He is also a member of the National Association of Business Economists (NABE). Since 2008 he has served as secretary and assistant newsletter editor on the board of directors for the SPE Rotational Molding Division (RMD). He has researched and written almost 100 multi-client reports, as well as over 100 single-client reports for domestic and global companies. In addition he has organized, chaired, and made presentations to numerous domestic and global conferences addressing critical issues confronting the domestic and global plastics industry.

(View Table Of Contents / Buy This Report)

@iRAP 2017. All Rights Reserved.