Despite the plastics packaging market reaching a mature status, it is still a viable and growing market, however recent economic uncertainty has led to oversupply in Europe and the US, according to a report from FT.com.
In the packaging industry plastics are ubiquitous and come in many forms - everything from plastics bags, to PET bottles, food trays and closures of every description.
Commercial-scale plastics were first introduced more than 50 years ago and have more recently attracted the critical attention of environmental groups.But, according to the FT report, this mature sector of the chemical industry can still pack a punch, exhibiting pretty respectable growth potential, particularly in the developing Asia/Pacific region.
Stacked against natural and traditional products - such as wood, paper, glass, aluminium and steel - plastics are price competitive, offer a variety of properties and, according to producers, consume less manufacturing energy than traditional alternatives.
In recent years the glass packaging industry has taken a real hammering as the PET industry goes from strength to strength - mainly at the cost of the glass industry.
World demand for the biggest plastic groups - polypropylene (PP), PVC, polyethylenes, polystyrene and PET - reached 136m tonnes in 2001, the FT report said.
By 2006, according to Chemical Market Associates Inc (CMAI), the industry consultancy, world demand is likely to approach 180 million tonnes. The world's largest PP producer, Basell a fusion of the polyolefins businesses of BASF and Shell Chemicals, reports that "demand growth has rebounded from 2001's low rates".
In North America, PP growth was 10.1 per cent for this year through to July. And, in Europe, PP grew 4.2 per cent. Other plastic types such as HDPE grew 3.2 per cent, LDPE grew 2.9 per cent and LLDPE. 4.5 per cent. Basell estimates that demand for both polyethylenes and PP, between 2002 and 2007, will rise by 4-5 per cent in Europe and by 5-6 per cent in the North American Free Trade Area region, the Chemical Market Associates reported.
Asian demand, including China and India, during the same period is forecast to increase by between 6.5 per cent and 8 per cent.
Growth so far this year in both Europe and North America has been driven by customer re-stocking following 2001's recession-linked cyclical demand and profits collapse, which forced a number of producers to close plants or suspend production.
The recent recession in the US and the subsequent knock-on effects in Europe have impacted the plastics business quite significantly, stunting growth. However in the Asia/Pacific region there is quite a different story, with demand reported as being robust.
Surinder Bahl, project manager with Phillip Townsend, US-based industry consultants, forecasts that "the Asia/Pacific region is poised for the first time to displace North America as the world's leading consumer of polyethylenes".
Over the next five years, he expects "consumption growth of more than 6 million tonnes, or 36 per cent of total worldwide growth over the period, which should be more than sufficient to propel the region to the top spot among polyethylene consumers".
Polyethylene production capacity in the Asia-Pacific region is also set to exhibit strong growth, with 4.6 million tonnes of new or expanded capacity being planned.
Almost two-thirds of the increase will come from China, but significant additions are also planned for India, Singapore and Thailand. However, these additions will not keep pace with the region's appetite for plastic materials.
In these regions much of the growth in plastics is being driven by the increased use of packaged foods and beverages, a growth that is expected to be maintained for some period to come, particularly in the China market.