The most recent polyethylene film market study by Mastio & Company forecasts promising growth for industrial packaging in the second half of 2002.

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Top Five Producers

1 Tyco Plastics (Tyco International Ltd.) 2 AEP Industries, Inc. 3 Polyethylene Packaging Div., Bemis Co., Inc. 4 Pliant Corp. 5 Sigma Stretch (Sigma Group)

The most recent polyethylene film market study by Mastio & Company forecasts promising growth for industrial packaging in the second half of 2002. The U.S. economy is strengthening, economists believe the recession has ended, and many processors of industrial packaging film are seeing an upswing. This is a far cry from the fall of 2001, when the industrial packaging film business stood still and sales stopped for weeks. The past year’s economic slowdown took its toll on many small industrial film processors, several of which closed or filed Chapter 11. The recession also encouraged the flight abroad of markets like textiles that use industrial packaging film.

Consumer confidence in the economy is a major factor for industrial PE film packaging. Consumer spending is the key to growth because consumer goods are increasingly packaged in cross-laminated films, bubble packaging, heavy-duty sacks, rack and counter bags, multi-wall sacks, industrial liners, stretch films, and shrink films.

Industrial PE packaging film consumes approximately 4.1 billion lb annually and represents about 24% of total PE film consumption. Industrial film processors predict that this major sector will exceed 6 billion lb by 2006, representing 8% annual growth.

The largest industrial packaging-film products include stretch film, shrink film, and industrial liners. Stretch film represents approximately 34% of PE industrial packaging segment, and shrink film another 18%. Stretch and shrink films also have the greatest potential for growth. 

 

Stretch & shrink films

Industrial stretch film continues to be one of the largest, most rapidly evolving PE film markets today. During 2001, stretch-film consumption slowed for the first time in nearly seven years. Even some large stretch-film producers saw a decrease in sales of as much as 5%. These same companies are forecasting growth for the third and fourth quarters of 2002 and stronger growth in 2003. Stretch film is forecasted to grow by an average of 10% through 2006.

Shrink films and pallet shrink bags and shrouds are experiencing a resurgence, regaining market share lost to stretch films since the 1970s. The increased popularity of supercenters, wholesale clubs, and discount stores where customers purchase products in bulk has added to demand for shrink film. For example, case-overwrap shrink bags for bottled water are a fast-growing segment of the shrink-film business. Also, pallet shrink bags and shrouds offer greater moisture and barrier protection than stretch wrap and are in demand for covering heavier, non-uniform pallet loads such as heavy equipment, gasoline-powered engines, furniture, boats, and other large objects.

Industrial liners are another promising area for film producers. Industrial liners represent 25% of industrial packaging films. Growth in this market is forecasted at 7% per year.

 

LLDPE outpaces other PEs

LLDPE is still the most-used resin for industrial packaging films. LLDPE consumption in this market is predicted to grow over 8% per year and will be approximately 66% of total PE industrial packaging film by 2006. Stretch film is one stronghold for LLDPE.

LDPE is forecasted to be 29% of total resin consumption for industrial packaging film. LDPE resin remains the principal material for shrink film due to its high clarity and ease of processing. LDPE is also the resin of choice for pallet shrink film because of its heat-shrink characteristics.

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.