A recent report from industry consultants, AMI Consulting points to Asia as the fastest growing and most dynamic market for thermoplastic masterbatch products in the world. Despite the impact of the global recession demand for masterbatch products has continued to power ahead in the region and is forecast to continue growing by over 7%/year. The most significant driver of this demand is the continuing expansion and rapid development of the market in China. China is the dominant force in the Asian masterbatch industry accounting for around 60% of demand and production.
In China masterbatch production has grown rapidly over the past five years more than doubling to meet a comparable increase in demand. Over the same time China has moved from being a net importer to a net exporter of masterbatch which is starting to have a profound influence on its Asian neighbours with increasing volumes being exported (often at very competitive prices). China is now a net exporter of all main masterbatch types with the exception of additive varities where the investment in production has lagged the 30%/year growth there has been for additive masterbatch in China over the past five years.
And additive masterbatch demand is expected to be a strong growth driver for the Chinese masterbatch industry going forward as processors and end users demand greater functionality and performance from products. Other markets will primarily be driven by their use in consumer products and packaging and a continuing shift away from the direct use of pigments and dry blends.
South Korea and Thailand are the other significant masterbatch markets, accounting for 11% and 9% of the regional demand respectively. Both have well developed markets for masterbatch as the local processing industry is relatively sophisticated generally operating to high standards. A strong growth market in recent years, although starting from a relatively small base, has been Vietnam where there has significant growth in plastics processing. However, the use of masterbatch is still relatively unsophisticated, but it has already attracted a number of foreign investors for masterbatch production such as Clariant and Culamix.
In general though plastics processors in Asia are increasingly demanding more sophisticated products and raw materials. All of this has had an impact on the masterbatch industry with companies becoming more technically advanced in their product development and switching away from the use of dry pigments or compounds.
In terms of the structure of demand Asia has a slightly higher requirement for colour masterbatch compared to black or white, reflecting the wide demand for colours for consumer product manufacturing in the region. A significant proportion of the additive masterbatch demand is accounted for by the use of anti-fibrillation masterbatch for the woven flat yarn raffia market.
Although there is expected to be some slowing in growth rates for masterbatch in Asia going forward, there remains significant room for further development of the market in the region. Future demand will be fuelled by the twin trends of increased production of plastic components, packaging, consumer goods and other products in the region and the continuing penetration of masterbatch versus competing colouring methods. The impact of the recession has been relatively muted in most Asian countries and demand for masterbatch continued to grow last year at around 6% and is expected to advance at between 7-8%/year to 2013 giving rise to a total demand for the region of over 1.2 million tonnes.
MASTERBATCH MARKETS IN ASIA: Growing demand and rising customer expectations is a detailed market study from AMI Consulting.
More information: www.amiplastics.com