Your Business Outlook - April 2002

Mastio’s latest polyethylene film market study shows medical film to be the 10th fastest growing market within the 42 film markets that Mastio & Company follows. Medical film is forecasted to grow at an average rate of 7%/yr to more than 308 million lb by 2006. Many of the processors that Mastio regularly surveys say they have not felt the effects of the slowing economy. As one processor said, “What recession? I don’t remember health care being optional.”

Some of this bullishness is due to advances in flexible packaging, such as inserts, stronger films, and unique sealing configurations. These advances are allowing custom-designed flexible packaging to support heavy, bulky, or unusually shaped products that formerly needed the strength of rigid trays. As a result, many companies in the medical packaging market are switching from rigid to flexible packaging. Flexible packaging uses less material and is less expensive than rigid packaging. These advantages have made medical film one of the five leading markets for flexible packaging.

 

What’s hot, what’s not

Growth potential remains strong for medical gowns and other protective apparel. One of the trends driving this growth is customer demand for film products that can perform more than one function—such as a medical gown or a curtain/screen. One result will be a trend to consolidate several medical films into one product.

Medical gloves are another attractive market. One catalyst for medical gloves is heightened airport security since last Sept. 11. However, the highest growth potential for medical PE film appears to be for infectious-waste containment bags.

Slower growth is predicted for certain PE medical films—namely waste-disposal liners, pouches, and device packaging. These applications have already converted from reusable to single-use medical packaging. While single-use packaging has penetrated the U.S. market, it has not scratched the surface of its potential in other countries such as China and Latin America.

 

Price pressures on film

While the current economy is not negatively affecting the sales of medical films, customers are starting to come to suppliers looking for price rollbacks on these products. This pricing pressure has triggered a cost-reduction push at many processors. For example, processors are centralizing procurement and consolidating their supplier base. Also, there is a drive to reduce consumption of expensive nonwoven materials.

 

Faster, thinner, cheaper

According to Mastio’s survey, medical PE film processors expect the following trends for the future: more automation, higher extrusion output rates, ability to hold tighter gauge tolerances, more use of coextrusion, more easily processed materials, highly specialized materials for breathable films, and downgauging. Many medical-film manufacturers feel that thinner films with less material are the key to success in this market.

 

Increasing use of LLDPE

As the accompanying chart illustrates, LLDPE is the fastest-growing resin in PE medical film. LLDPE resins accounted for 52% of this market in 2001. In 2006, LLDPE consumption is forecasted to reach 54%. LLDPE films are favored because they are stronger than LDPE films in thinner gauges.
After LLDPE, LDPE resins hold the next largest share, accounting for approximately 39% (84.7 million lb) of the medical film market in 2001.
HDPE and MDPE resins are less than 10% of the market. HDPE film can be produced at much lower gauges and allows faster fabrication and a greater bag yield/lb than LLDPE.

 

A concentrated field

There are approximately 38 companies that manufacture medical PE film and packaging products. The five largest companies in 2001 were (in descending order) Clopay Corp. (Griffon Corp.), Pliant Corp., Maxxim Medical, Rexam Medical Packaging, and Banta Healthcare Group. Together, they hold 55% of the total market.

 

Mastio & Company, based in St. Joseph, Mo., is a well-known consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call (816) 364-6200 or visit www.mastio.com/pt/outlook.html.