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Abundance of Raw Materials and New Production Units Drive Bioplastics Market in Brazil and Mexico Finds Frost & Sullivan - Given higher prices, consumer perception important for widescale adoption
Abundance of Raw Materials and New Production Units Drive Bioplastics Market in Brazil and Mexico Finds Frost & Sullivan

 

PRZOOM - /newswire/ - Sao Paulo, Brazil, 2010/06/03 - Given higher prices, consumer perception important for widescale adoption.

   
 
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Both Brazil and Mexico are nascent markets for bioplastics, when compared to those in Europe or the U.S. Bioplastics are currently penetrating such segments as food packaging and agricultural films. However, large production scales in Brazil are expected to give a new direction to this market in the region.

Competitive production scales and an increasing demand will be crucial to make bioplastics a growing and profitable market in the region. Legislation and government incentives, currently underdeveloped for bioplastics, are also important in this stage of the industry, to support small local companies.

In addition, awareness among the end user and final consumer regarding bioplastics' positioning in the market will be crucial for the products' success, especially given their higher prices.

Frost & Sullivan expects that bio-based and petrochemical plastics will coexist in the market. However, in the short to medium-term, bioplastics cannot be considered a threat to petrochemicals, as volumes will correspond to less than 5% of the total plastics' demand.

The Brazilian market for bioplastics has promising growth projections for the next five years. In 2009, the bioplastics market in Brazil was composed mostly by PLA, starch-based, and PHB resins, representing volumes of 1,286 MT – metric tonnes and revenues of US$4.4 million. For 2015, the bioplastics market in Brazil is expected to reach $618.0 million, with 250,086 MT locally consumed.

Brazil is the leading producer of sugarcane in the world, delivering attractive production costs for this raw material. As sugarcane and ethanol production in Brazil is constantly increasing, this will be a competitive advantage for the country to expand bioplastics production based on ethanol. From 2004 to 2009, sugarcane production in Brazil increased at an average annual rate of 9.8%.

Competitive elements to the bioplastics market in Brazil will be strongly linked to product demand, R&D, local infrastructure, and incentives. Investments from private investors and the government will grow about 25% by 2013 and by about 35% by 2015.

"Key drivers of the bioplastics market in Brazil include the availability of feedstock and a focus on the carbon footprint among key end-user sectors," explains Frost & Sullivan Research Analyst Alessandra Lancellotti. "Restraints include crude oil price fluctuations and higher prices compared to that of conventional plastics."

The Mexican conventional plastics market had a shipment of 4.6 million MT and that of its bioplastics market was equal to 1,200 MT in 2009. The Mexican bioplastics market is in the growth stage in the product life cycle, and the expected average annual growth rate for this market is higher than 20%. Growing environmental awareness and concern in Latin America is a driver for the market.

Corn-based plastic is the most known resource in Mexico, but major problems exist because the country is the fourth largest producer in the world, and it still needs to import 5% to 10% for local food demand.

"Conventional plastic production companies in Mexico are reluctant to start production, since they are afraid the demand will be low," cautions Lancellotti. "Bioplastics in Mexico is still an emerging market."

However, both Brazil and Mexico, as top global grains and crops producers, are promising manufacturers for bio-based plastics under competitive costs. This competitive advantage in raw materials, especially for Brazil with sugarcane, is likely to develop an important local demand for bioplastics.

Bioplastics' production in Brazil and Mexico for local and international consumption takes advantage of local competitiveness in production and free trade agreements that could warrant major international demand markets penetration.

If you are interested in more information on this study, please send an email to Tatiana Brull, at tatiana.brull[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

Strategic Assessment of the Bioplastics Market in Brazil and Mexico / N7DF

 
 
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Abundance of Raw Materials and New Production Units Drive Bioplastics Market in Brazil and Mexico Finds Frost & Sullivan

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