The group says that the purpose of the review is to see how efficiency and value can best be maximised.
"We are confident that our blow-moulded plastic business is an attractive franchise and, like our global glass operations, has significant value. We believe there may be a number of ways for us to benefit our investors as a result of this strategic review," said Terry L. Wilkison, O-I executive vice president and general manager of the Plastics Group.
ACI Packaging, an affiliate of Owens-Illinois, announced in August that it would conduct a similar strategic review of its Australian and New Zealand plastics packaging businesses. In other words, every aspect of the group's global plastics operations is being examined.
This global strategy is unsurprising when you consider the importance and size of the blow-moulded plastics market. According to market research firm Mastio, blow-moulded consumer packaging represents approximately 6 per cent of total blow moulding resin consumption - 6.6 billion pounds was produced for this purpose in 2001 alone. And with an average annual growth rate of 7.5 per cent, consumer packaging is anticipated to surpass 9 billion pounds by 2005.
The food packaging segment, which embodies 80 per cent of consumer blow moulding, represents even greater opportunities for processors. Mastio predicts that this market will grow at an average rate of over 8 per cent per annum, while non-food uses within consumer blow moulding are growing at a slower rate, at around 6 per cent per annum. This is because the displacement of glass and metal, and other more traditional materials, is further developed in these markets.
One of the fastest-growing products in this sector is containers for salad dressing and condiments. According to the researchers, this is due to a combination of new coextrusion technology and bottle designs, plus the advantages of replacing glass with an unbreakable container. Liquid-food packaging is projected to average more than 6 per cent annual growth over the next five years.
HDPE and PET still represent the major resins used for blow moulded consumer packaging. For the near term, Mastio predicts that PET bottle markets are set to continue their double-digit growth of the last few years. In some sectors such as single-serve soft-drink and water bottles PET is still capturing market-share from glass bottles.
But despite some inroads by PET, HDPE remains the largest-volume resin for consumer blow moulding. HDPE usage dropped 4 per cent to 5 per cent in 2001 but was still well over 4 billion pounds. Many HDPE resin suppliers forecast no real growth in blow moulding consumption this year. However, several large processors are more optimistic and anticipate HDPE will reach 6.5 billion pounds by 2006.
Owens-Illinois is the largest manufacturer of glass containers in North America, South America, Australia and New Zealand, and one of the largest in Europe. O-I also is a worldwide manufacturer of plastics packaging with operations across the globe. Plastics packaging products manufactured by O-I include consumer products (blow moulded containers and injection moulded closures) and prescription containers.