AMI: Investment slows in global BOPP film industry
The biaxially oriented polypropylene (BOPP) film industry is set for a period of readjustment, as earlier high rates of investment in capacity have now slowed down, said AMI.The research group said over-enthusiastic investment in new BOPP capacity in the first part of this decade has driven down margins and utilisation rates around the world. But utilisation rates should steadily improve over the next five years, which could bring relief to BOPP industry margins. Demand for BOPP film globally reached nearly 4.5 million tonnes in 2006. Asia represents the largest regional market, accounting for 40% of global demand in 2006.
Western Europe accounted for 18% of global demand and the North American Free Trade Area 13% in 2006. Utilisation levels in these regions have mainly been supported by export markets. Growth for Western Europe, NAFTA and Japan is forecast by AMI at an average of just under 2% per year over the next five years, compared with nearer 9% per year for the rest of the world. AMI said there have been substantial increases in BOPP film use in the Indian sub-continent, the Middle East and Russia. Russia and Eastern Europe accounted for 6% of worldwide demand in 2006.
There has been increased investment in new lines in these regions, with Russia, for example, seeing five new BOPP film plants coming on stream in the 2005-2007 period. AMI said there have been substantial increases in BOPP film use in the Indian sub-continent, the Middle East and Russia. Russia and Eastern Europe accounted for 6% of worldwide demand in 2006. There has been increased investment in new lines in these regions, with Russia, for example, seeing five new BOPP film plants coming on stream in the 2005-2007 period.