LONDON, October 18 /PRNewswire/ -- In recent years, several sectors of the European manufacturing industry have shifted their business to Asia to benefit from cost advantages and capitalise on market growth in the region. Plastic processors have also followed suit in order to compete with Asian companies and improve their offerings to customers in those regions. This has adversely affected the European masterbatch and colourants industry, which has lost customers to Asia and therefore become more competitive, price-driven and less profitable.
"The plastics market is growing in the European Union (EU) in virtually every sector of the industry and chemical class," remarks Frost & Sullivan Industry Analyst Robert Outram. "Growth in the high density polyethylene (HDPE) and PolyEthylene Terephthalate (PET) sector has been particularly good, with growth rates since 2001 ranging between 3.4 to 4.4 per cent per year. This is an important sector of the plastic colourants markets as HDPE and PET are used in the making of plastic bottles and containers, often requiring some colourant."
To a large extent, expansion of the European plastic industry is driving the plastic colourants markets. The industry is witnessing growth, particularly in high-price and technical applications such as films and automotive parts. As Asian companies enter the market, compelling prices to decline, these high-performance applications are providing opportunities to European pigment producers and allowing them to distinguish themselves as technology leaders.
However, European pigment producers are facing growing price pressure. The cost of producing a kilogram of organic pigment is lower in India and China, than in Europe. Typically, Asian pigment producers charge EUR2 to EUR3 less per kilo for organic pigments, in comparison to their European counterparts. This is attributed to low costs of construction, workforce wages and environmental controls in the regions. While tightening of environmental legislations in these countries is expected, it is unlikely to make a significant impact on bridging cost disparities.
"Competition for sales has largely been on a price basis as the degree of innovation in the market is limited and the market itself has noticeable resistance to evolving technologically," explains Mr. Outram. "Consequently, the main tool competitors can leverage in the market is price."
With competition focussed on price, driven by masterbatchers and plastic producers, price erosion of colourants has occurred. As a result, funds available in the market for innovation and development of new additives have dwindled and products are becoming commoditised further.
In view of the competitive nature of the plastic colorants markets, an effective business strategy will become crucial for survival. European participants are likely to acquire Asian companies or form alliances with them in order to shift production to East Asia to curb costs and remain competitive. Product innovation will become essential for European companies to successfully differentiate themselves from their Asian competitors. In addition, finding feasible methods to fund research and development, while reducing current production costs will become imperative for market success.
European Markets for Plastic Colourants is part of the Chemicals and Materials Subscription, which also includes research in the following markets: The Global Inkjet Inks Market, European Markets for Engineering Polyester Thermoplastics, European Markets for Flexible Plastic Food Packaging, European Market for High Performance Polyamides and, Innovative Engineering Plastics. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
Background
Frost & Sullivan Chemicals and Food Group is the strategic market consultant delivering insight and understanding to support business growth internationally. We identify and analyse the critical market challenges companies must address to become successful competitors in their industry. Our work is focused on these challenges in order to provide our clients with market strategies that enable them to increase revenues, market share and profitability.
The Group continuously monitors a comprehensive spectrum of chemical and food markets for trends, market measurements and strategies, and delivers powerful data via research publications, bespoke market intelligence projects and customised consulting.
List of key industry participants: Albion Colours, Ami pigments Pvt. Ltd, Ampacet Corporation, Arichemie, BASF, Bayer, Bericap, BrollBuntpigmente GmbH, Bruchsaler Farben, Cabot Corporation, Cadmium Association, Cappelle, Cappelle pigments, CCP Masterbatch, Cefic, Ciba Specialty Chemicals, Ciba, Clariant, Cleveland Pigment and Color Co., Columbian Chemicals Co., Color Plastic Chemie (CPC), Degussa Corporation, Dainippon Ink and Chemicals Inc., Deifel GmbH, Eastern Chemicals, EC pigments, Eckart GmbH & Co., Elementis Plc, Engelhard, Eurocolors (Cefic association), Ferro, Francolor pigments, Gabriel Chemie, General quimica, Gustav Grolman GmbH & Co, Habich GmbH, Hampton Colours, Heubach GmbH, Holland Colours Group, Holliday pigments Ltd, Horsta Chemicals Co. Ltd, huntsman Tioxide, James M Brown, Jaysynth, Johnson Matthey, JM, Kemira, Kerr McGee Pigments GmbH, Keystone Aniline Corporation, Kronos worldwide inc, Lanxess AG, Lona Industries Ltd, Magruder, Mazda Colours, Meghmani, Millennium chemicals, Narayan Organics Pvt. Ltd, Nubiola, Ostacolor, Polyone, Polyplast Muller GmbH, Precheza as, Prisma Colour Ltd, Rockwood Pigments, Ruetgers, Sachtleben chemie gmbh, A.Schulman, Shepherd, Silberline, Ste Languedocienne De Micron Couleurs (SLMC), Society of Dyers and Colourists, Sudarshan Chemical Industries Ltd., Sun Chemical Corporate, Sun Chemical Corporate, usgs, Vibgyor Chemtex International, W Hawley & Son, West & Senior, Worlée-Chemie GmbH, VTC Silvergate, Vita Thermoplastic Compounds, Hellyar Plastics, Polykemi
List of keywords in this press release: plastic, plastic colourant, Europe, Asia, plastic processor, masterbatch, high density polyethylene, HDPE, polyethylene terephthalate, PET, films, automotive parts, pigment producers, organic pigment, India, China, East Asia, research, information, market, trends, technology, service, forecast, market share
Frost & Sullivan
