SINGAPORE (ICIS)--Malaysia expects no increase in plastics exports this year “due to challenging environmental issues”, but the overall industry should be able to pull a 2% growth amid a global economic slowdown, an industry executive said on Monday.
“With an anticipation of the slowing global and Malaysian economies, the plastics industry is expected to grow at about 2% in 2019,” Malaysia Plastic Manufacturers Association (MPMA) vice president CC Cheah told ICIS in an e-mail interview.
The country’s plastics shipments in 2018 were flat at Malaysian ringgit (M$) 14.6bn, weighed down by a contraction in exports of plastic bags following restrictions in the EU on the use of single-use plastics to reduce marine litter.
In 2017, Malaysia’s plastics industry posted a 9.1% growth in turnover to M$29.8bn, with exports up 11.2% at M$14.6bn.
Malaysia, which is a major exporter of plastic bags, counts the EU as a big market for its plastics exports – which until 2018 had been growing at a rate of 5-10%.
Plastic bags were among the top 10 most found plastic waste items on Europe’s beaches, according to the EU.
In response, some countries in the region have started charging fees on use of plastic bags, also called a bag tax, to reduce consumption.
The bag tax, notwithstanding, MPMA does not expect a strong hit on overall consumption of shopping bags.
“We are not anticipating a great impact on plastic shopping bags consumption due to the bag tax. Consumers will still pay for the tax as they need the bags,” MPMA’s Cheah said.
Malaysia’s exports of plastic bags declined 4.0% in 2018 to M$4.22bn, which accounted for about 29% of its total shipments of plastic items.
“The drop in plastic bags sales may also be compensated by the growth of roll bags or garbage bags,” Cheah said.
Given EU restrictions and emphasis on recyclability of plastics, “some [Malaysian] companies are trying to re-capture the North American markets”, the MPMA executive said.
The EU launched in 2018 its new strategy for plastics, banning some SUPs, with a 2030 target for all plastics packaging to be recyclable, as part of its circular economy action plan.
“It [EU plastics strategy] [is] mainly affecting the bags business but not for the films sector. Packaging films sector is still the largest export component due to growing demand from the food sector,” Cheah said.
“The impact is only on increasing cost whereas the consumption growth is still ... intact,” he added.
Malaysia’s exports of plastic films posted a “mild growth” last year, according to MPMA.
A global economic slowdown, however, would weigh on general consumption of plastics.
Interview article by Pearl Bantillo
($1 = M$4.08)
Click here to see regulatory targets and a list of chemical and mechanical recyclers on the ICIS Circular Economy topic page.