BLOG: Success in the new HDPE world: Tactics must be accompanied by a whole new strategy

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

“Tactics without strategy is the noise before defeat,” wrote Sun Tzu.

The right tactics for the global high-density polyethylene (HDPE) business include a razor-like focus on all the import markets other than China, as China moves inexorably towards greater self-sufficiency:

In 2022-2040 China’s net cumulative HDPE imports could be as low as 49m tonnes versus the ICIS base case of 118m tonnes, reducing the total global net import market to 199m tonne from 268m tonnes.

Even worse outcomes seem possible because of China’s new “less is more” approach. This involves reducing carbon emissions and increasing recycling, as China also strives to reduce polyolefins consumption in general through re-use and redesign.

China will continue to add to its HDPE local capacities a part of a long-standing government policy of lowering dependence on imports of commodities in general.

As the size of the global export pie shrinks, the right tactics must also involve learning to overcome distribution and customs challenges in the much smaller import markets outside China, including Africa, South & Central America and Asia and Pacific.

But to avoid the “noise before defeat”, global HDPE companies need new strategies. Producers must build entirely new business models. The successful companies of the future will be those who build competitive advantages in carbon management and in recycling as “less is more” becomes a major global phenomenon.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.