Market participants will be encouraged by the massive market potential in the region, which primarily stems from the market's novelty and current low penetration in target applications.
New analysis from Frost & Sullivan (materials.frost.com), Bioplastics Markets in Southeast Asia, finds that the market is expected to grow at a compound annual growth rate of 129.8 percent in the next five to seven years.
The bioplastics market is likely to find the going good with favorable local government support and initiatives, increasing competitiveness of bioplastics due to increase in oil price, and the market recognition of bioplastics as a green product. In fact, the market is covering significant ground in the region.
"For instance, in the bags segment, bioplastics is replacing polyethylene (PE) – mainly low-density polyethylene (LDPE)," says Frost & Sullivan Industry Analyst Xu Dan. "It is also substituting polyethylene in some film applications in the packaging segment."
Although the replacement rates of traditional plastics such as PE or polystyrene (PS) with bioplastics are likely to be minimal, it will be a huge leap for the novel bioplastics market, and will count as high growth. Moreover, the efforts of governments, especially those in Thailand, to derive 5 percent of their plastics from bio-based sources in 2012 have given a huge boost to the market.
The governments are also looking to attract domestic and international businesses by introducing an incentive program that includes research funding and favorable tax policies. The teething problems of a developing market notwithstanding, capacity expansion and greater geographical penetration will inflate the market growth rate in the next two to three years.
While strategizing for this market, bioplastic companies will have to be aware that the Southeast Asian consumers are more cost conscious than their western counterparts, and therefore, may not be willing to pay a premium for the product. However, growing sensitivity to climate changes and a rise in oil prices have worked together to encourage the public, governments, and private companies to evince greater interest in bioplastics.
"Increasing prices of conventional resins are likely to pave the way for the greater usage of bioplastics in Asia and other parts of the world," notes Dan. "The higher oil prices are responsible for this rise in resin costs, which, in turn, has made bioplastics an attractive raw material alternative for the plastics manufacturing sector."
Bioplastics will gain further attraction if market participants can educate consumers of its benefits. At present, in Southeast Asia, bioplastics is perceived as a niche market, beset by cost and performance issues. These concerns have to be addressed before market participants can make any headway.
"Lack of local production as well as the low levels of consumption and public awareness is major barriers to the greater usage of bioplastics," remarks Dan. "This challenge is likely to diminish as more companies set up manufacturing plants in the region."
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the bioplastics markets in Southeast Asia, then send an email to Donna Jeremiah, Corporate Communications, at djeremiah[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country. Upon receipt of the above information, an overview will be sent to you by email.
Bioplastics Markets in Southeast Asia is part of the Chemicals & Materials Growth Partnership Service program, which also includes research in the following markets: Engineering Plastics in Southeast Asia, Engineering Plastics in China, China Flame Retardants Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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Bioplastics Markets in Southeast Asia