02 October 2012 21:17 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--Colombia’s food and beverage plastic packaging market decreased 32.3% in 2009 because of the global economic crisis, but bounced back in 2011 and will continue growing through to 2016, an analyst said on Tuesday.
In 2011 market revenue for the sector stood at $617.9m (€482.0m). Revenue is expected to reach $952.3m in 2016, at a 3.8% compound annual growth rate (CAGR), said Camilo Marin, an analyst for consultancy firm Frost & Sullivan.
The sector is being driven by a strong Colombian economy that is expected to grow by 4.5% in 2012, which is above the estimate of 3.7% for the entire continent, Marin said.
In addition, Colombia’s recently signed free-trade agreement with the US has given the country access to the world’s largest market in products and services.
“The free-trade agreement should lead to a significant impact in terms of economic growth, increased imports and generation of jobs,” the analyst said.
According to Marin, market growth was also being driven by increased demand for plastic packaging.
“Plastic packaging is transparent, which allows for customer inspection of goods. It’s also easy to transport, as lightweight plastics make products more portable,” he said.
However, the analyst emphasised that producers would have to adopt strategies to counteract threats that could hamper growth.
The development of new types of resins and more cost-effective transformation methodologies could reduce plastic consumption, he said.
“Whether it is done for ecological or economic reasons, the light-weighting trend means manufacturers are using thinner bottles and consuming less virgin plastic,” said Marin. “Coca-Cola has been a pioneer in this initiative.”
In addition, rising oil prices could restrain the feedstock availability for future plastic production and affect resin producers’ margins.
“The rising prices for oil and its derivatives are negatively affecting local plastic manufacturers,” Marin said.
According to Marin, PET is the fastest growing segment, mainly because the plastic is replacing glass in soda bottles in Colombia.
The top five companies in the sector with 79% of market share are Dow Chemical, Mexichem, Enka, Propilco and Ecopetrol.
($1 = €0.78)
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