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Report Shows Growth in $32 Billion Plastic Additives Industry

HOUSTON-(Business Wire)-September 4, 2008 - Demand from China has helped drive growth in the plastic additives industry, pushing the industry to 12.2 million tonnes in 2007. The industry as a whole was valued at $32 billion, according to the new Global Plastic Additives report from the experts at Townsend Polymer Services and Information.

The single most important mega trend affecting the plastic additives industry is emerging China, according to the report. Exploding demand for both domestically processed and imported plastics, especially in PVC, has resulted in China accounting for 28% of worldwide additives volume. China now surpasses all other reporting regions.

In additives products for plastics, it is not surprising that plasticizers — predominately used in PVC — remain the largest product category and account for 54% of total global volume. However, it is notable that the report found the use of flame retardants in plastics grew at one of the fastest rates worldwide for all additives. Increased acceptance of plastics, replacing other fabrication materials, requires incorporation of flame retardant additives to reduce the personal and property hazards and risks of fire.

The $32 billion plastic additives industry continues undergoing structural market changes, such as globalization, product life cycle maturity, strong growth in emerging markets, low-cost Asian sourcing and regulatory pressures. These factors are profoundly re-shaping the industry supply chain. A partial list of some of the major trends/ issues/drivers that impacted change and are influencing the industry are found in Townsend’s Global Plastic Additives report:

Resin Production/Demand: This driver remains the baseline of additives consumption.
End Use Markets: Closely tied in with resin demand are applications for plastics as each additive has its own end use pattern.
China: As an emerging global economic powerhouse, no business decision can be made without considering the influence of China.
Emerging Economies: A number of countries (BRICs) are considered to be emerging markets, requiring strategic focus.
Pricing/Feedstocks: The rapid run-up in prices for energy for raw materials and to run plants affected additives prices.
Globalization: As the plastic processing industry consolidates, so have the additive suppliers moved to establish positions in all the major regions.
Environmental/Regulatory: This area continues to provide opportunities as well as threats to additive suppliers. Among the major areas of activity include: REACH, RoHS, WEEE, Phthalates, and more.
Supply Chain Shifts/Value Migration: The polyolefin prime resin producers continue to reduce the number of products they produce, which affects additives demand.

For more detailed information on any of these trends, or data and information contained in the 700-page Global Plastic Additives study, please contact Abbe Scheiner at ascheiner@townsendpolymer.com or +1-610-372-6716.

About Townsend:

Townsend Polymer Services & Information is a leading provider of consulting services and information to clients in the plastics industry, worldwide. Townsend’s unique position is based on its expert knowledge of the industry and its markets, backed up by its leadership in information gathering and analysis since 1972. Townsend’s mission is to assist plastic industry clients in becoming more successful and profitable by supporting their business decisions and management processes with valued and objective insights and solutions. Visit us online at www.townsendpolymer.com for additional information on these and other products.

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