biodegradable plastics – are costly green products still relevant during an economic crisis-mar09
TRANSCRIPT
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Biodegradable Plastics Are CostlyGreen Products Still Relevant During
an Economic Crisis?
W.F. Kee
Research AnalystTechnical InsightsMarch 10, 2009
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Focus Points
Impact of Economic Crisis
Global Biodegradable Plastics Market
Industry Survey on Environmental Issues
Key Drivers for Growth
Existing and Emerging Applications
Strategic Recommendations
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Impact of Crisis on the Global Chemicals andMaterials Market
JapanAutomotive giants are hit hard byeconomic recession andresulting drop in global demand;this directly affects all dependentchemicals and materials markets
JapanAutomotive giants are hit hard byeconomic recession andresulting drop in global demand;this directly affects all dependentchemicals and materials markets
USA
Housing market collapse affected a wide range ofchemicals and materials markets
Significant job losses in the industry and plantclosures (Dow, BASF, Rohm & Haas and others)
Decline in consumer demand affects end-marketpricing, which in turn led to volume reduction
USA
Housing market collapse affected a wide range ofchemicals and materials markets
Significant job losses in the industry and plantclosures (Dow, BASF, Rohm & Haas and others)
Decline in consumer demand affects end-marketpricing, which in turn led to volume reduction
Europe
Decline in consumer demand resulted inscaling-down of production and redundanciesacross all industries.
Construction. automotive and real estateindustries and the finance and bankingsectors have already been hit, affecting thechemicals and materials markets
Europe
Decline in consumer demand resulted inscaling-down of production and redundanciesacross all industries.
Construction. automotive and real estateindustries and the finance and banking
sectors have already been hit, affecting thechemicals and materials markets
RussiaRussia is affected by theeconomic downturn but its
strong position in oil and gasreserves suggest a quickcomeback
RussiaRussia is affected by theeconomic downturn but itsstrong position in oil and gas
reserves suggest a quickcomeback
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Global Response: Massive Government Stimulus
China Interest rate cuts $586bn stimulus (infrastructure, rural)India
Interest rate cuts $4bn stimulus package (infrastructure,exports, textiles)
Global Response Governments infusing capital into financial institutions Globally coordinated interest rate cuts IMF (International Monetary Fund) offers bridge loan to meet foreign exchange requirements Discussions, coordinated efforts (G20 summit)
Brazil Infrastructure development under PDP
(more than $64bn into countrys financialsystem)
USA $787bn American Recovery
and Reinvestment Bill $700bn bailout rapid interest
rate cuts $23bn support for top three
auto companies; Plan to create 2.5 millionjobs by 2011
UK: 250bn bailoutGermany: $700bn relief packageBelgium and Switzerland: Capital infusionECB: Interest rate cuts
France: $50bn stimulus package
Japan: Interest rate cuts 447bn yen stimulus
package
South Korea: Interest rate cuts and
efforts to keepcurrency stable
$11bn stimuluspackage
Russia Support for Russian
ruble $20bn stimulus package
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What Will Catalyze the Turnaround forChemicals and Materials?
Green Chemicals and Materials Biodegradable products, sustainably sourcedchemicals, bioenabling chemicals and materials will drive growth in marketsegments from solar cell chemicals to bioplastics and from detergents to next
generation biofuels
Renewable Sourcing and Feedstock The sourcing and utilization of renewablechemicals and materials can provide a competitive advantage to companiesthat suffer from price fluctuations in traditional feedstock
In spite of fiscal challenges, credit crunch and contraction of consumer markets, there are still anumber of drivers creating growth opportunities in the global chemicals and materials markets.
Green Chemicals & Materials
Renewable Sourcing & Feedstock
Logistics and Supply Chain Acquisitions
E-commerce Geographic Regions
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Investment in Green Policies / Strategies
Q: Over the next year, my companys rate of investment in green policies/strategies will?
Rate of Green Investment
(N=593)
67%
33%
0%
0% 20% 40% 60% 80%
Decrease
Remain Unchanged
Increase
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Drivers for Environmental Investment
Q: There are many drivers which contribute to a company making environmental investments, what are the main reasons drivingyour decision to go green?
Drivers of Going Green
(N=400)
33%
38%
46%
50%
54%
59%
62%
69%
67%
61%
0% 20% 40% 60% 80%
Potential competitive advantage
Growth opportunity for company
Corporate social responsibility
Meeting customer expectations/requirements
New technology opportunities
Ability to enter new markets
Greener Image
Product development
Potential cost savings
Leverage existing markets
61%
Note: Multiple mention question. Only top ten responses shown.
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Poll 1
Q1: In this economic downturn, do you think we should
continue to invest in green technologies even if thetechnology is more expensive?
A. YesB. No
Please respond A or B on the textbox of your screen.
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Key Drivers for the Biodegradable Plastics Industry
HighHighMediumImprovements in R&D impact ofbiotechnology
MediumMediumLowEco-labeling
HighHighMediumIncreased demand from educated
consumers
HighHighHighDrive for less dependence on oil
HighHighHighGreen procurement policies
HighHighHighRegulations EU, Japan
HighHighHighTrend of going green
HighHighHighClimate change
8-12 years4-7 years1-3 yearsDriver
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Global Volume Forecast by Polymer Type
Global Volume Forecast by Polymer Type (2003 - 2013)
0
50
100
150
200
250
300
350
400
450
2003 2007 2010 2013
Year
Volum
e(kt)
Others
PHAStarch-based
PLA
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Volume Share by Polymer Type
2003
63.9%
27.3%
0.8%
8.0%
PLA Star ch PHA Other
2010
43.3%
39.8%
11.2%
5.7%
PLA Star ch PHA Other
2013
38.6%
38.2%
18.6%
4.7%
PLA Starch PHA Other
2007
51.8%39.4%
1.4%
7.4%
PLA Starch PHA Other
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Existing and Emerging Application Sectors
Existing andExisting and
EmergingEmerging
ApplicationsApplications
Agriculture -mulching film
Compostable Waste /Carrier Bags
Healthcare
Automotive
Electronics
Film and Rigid
Packaging
Toys
Existing Application Sectors Emerging Application Sectors
Catering Products
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Key Players
Metabolix
Natureworks
Cereplast
Plantic
Rodenburg
Novamont
Player
Apparel, furnishings, carpets,plastic cards
Fiber and nonwovens, films,water bottles, catering products
PLA
Consumer goods - cosmeticpackaging, razors, brushes,applicators, cell phones, pens andoffice supplies
Disposable cutlery, agriculturalfilm
PHA
Hybrid resins for automotive,consumer electronics, toys,cosmetic packaging
Injection molding, thermoforming,extrusion coating and blowmolding applications
Starch / PLAblend
Water flushable applications water dispersible labels, health &
hygiene
Rigid packaging, injectionmolding, flexible films, barrier
resins
Starch
Plastic replacement, automotive,electronic packaging
Flower pots, agricultural filmsStarch
Injection molding, foams,thermoforming, extrusion, tire
additive
Packaging film, agriculturalapplications, waste and shopping
bags, catering
Starch
Emerging MarketsExisting MarketsPolymer
Type
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Application Roadmap
Present 20252015 2020
TIMELINE
Application
Rigid and flexible plastic replacement
Toys
Electronic Applications
Automotive components
Medical Applications
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Poll 2
Q2: What application sectors would you like to have the option ofusing biodegradable plastics? (may choose more than one)
A. Food packaging
B. Carrier / waste bags
C. Disposable cutlery
D. TextilesE. Toys
F. Electronic casings
G. Others
Please respond A/B/C/D/E/F or G on the textbox of your screen.
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Strategic Recommendations
Challenges Recommendations Implementation
CostCompetitiveness
Improve upon processing economicsDevelop more efficient technologies
Monitor new technological developments,
especially biotechnology
Seek cheaper feedstock
Integrated processProcess optimization
Genetically modified bacterial
strains
Improvement ofProperties
Develop new and better technologiesImprove blending prospects
Reinforcement using natural fibersConsider incorporating nanotechnology
Structural modification of polymersCross linkage
Development of biocomposites ornanocomposites
IndecisionRegarding
Positioning ofProducts
Develop products that can act as drop-inreplacements
Introduce innovative products that open newmarkets
Sustainability as a branding tool
Investigate emerging markets
Environmental,Health and
Safety Issues
Carbon footprint assessmentProper disposal guidelines
Cradle to cradle conceptEnsure proper ESH testing
Closed loop processLife cycle analysis, or similar
Low energyEfficient green processes
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Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by taking our survey.
What would you like to see from Frost & Sullivan?
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For Additional Information
Steve LeeStrategic Account Manager
Chemicals, Materials and Food, Asia Pacific(65) 6890 [email protected]