biodegradable plastics – are costly green products still relevant during an economic crisis mar09
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Biodegradable Plastics – Are Costly Green Products Still Relevant During
an Economic Crisis?
W.F. KeeResearch AnalystTechnical InsightsMarch 10, 2009
2
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
3
Impact of Crisis on the Global Chemicals and Materials Market
JapanAutomotive giants are hit hard by economic recession and resulting drop in global demand; this directly affects all dependent chemicals and materials markets
JapanAutomotive giants are hit hard by economic recession and resulting drop in global demand; this directly affects all dependent chemicals and materials markets
USA
Housing market collapse affected a wide range of chemicals and materials markets
Significant job losses in the industry and plant closures (Dow, BASF, Rohm & Haas and others)
Decline in consumer demand affects end-market pricing, which in turn led to volume reduction
USA
Housing market collapse affected a wide range of chemicals and materials markets
Significant job losses in the industry and plant closures (Dow, BASF, Rohm & Haas and others)
Decline in consumer demand affects end-market pricing, which in turn led to volume reduction
Europe
Decline in consumer demand resulted in scaling-down of production and redundancies across all industries.
Construction. automotive and real estate industries and the finance and banking sectors have already been hit, affecting the chemicals and materials markets
Europe
Decline in consumer demand resulted in scaling-down of production and redundancies across all industries.
Construction. automotive and real estate industries and the finance and banking sectors have already been hit, affecting the chemicals and materials markets
RussiaRussia is affected by the economic downturn but its strong position in oil and gas reserves suggest a quick comeback
RussiaRussia is affected by the economic downturn but its strong position in oil and gas reserves suggest a quick comeback
4
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 country’s financial system)
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 million
jobs by 2011
UK: £250bn bailoutGermany: $700bn relief packageBelgium and Switzerland: Capital infusionECB: Interest rate cutsFrance: $50bn stimulus package
Japan:• Interest rate cuts• 447bn yen stimulus
package
South Korea:• Interest rate cuts and
efforts to keep currency stable
• $11bn stimulus package
Russia• Support for Russian
ruble• $20bn stimulus package
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What Will Catalyze the Turnaround for Chemicals and Materials?
• Green Chemicals and Materials – Biodegradable products, sustainably sourced chemicals, bioenabling chemicals and materials will drive growth in market segments from solar cell chemicals to bioplastics and from detergents to next generation biofuels
• Renewable Sourcing and Feedstock – The sourcing and utilization of renewable chemicals and materials can provide a competitive advantage to companies that suffer from price fluctuations in traditional feedstock
In spite of fiscal challenges, credit crunch and contraction of consumer markets, there are still a number 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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Perceptions on Environmental Issues
Perceptions of Environmental/Green Issues
30%
30%
18%
12%
9%
1%
29%
23%
15%
12%
19%
2%
30%
34%
20%
12%
3%
1%
0% 10% 20% 30% 40%
Moral, ethical obligation
Critical to growth of company
Important to customers
Good public relations
Irrelevant
Don't know/care
Total Sample (N=593) CEOs (N=248) Other Organization Leaders (N=345)
Note: The Industry Survey on Environmental Issues was presented during Frost & Sullivan’s Growth, Innovation and Leadership (GIL) event in Sept, 2008
Q: How do you primarily view the current high profile of environmental/green issues?
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Investment in Green Policies / Strategies
Q: Over the next year, my company’s 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 driving your 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 the technology is more expensive?
A. Yes
B. 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 of biotechnology
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
Vo
lum
e (kt)
Others
PHA
Starch-based
PLA
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Volume Share by Polymer Type
2003
63.9%
27.3%
0.8%
8.0%
PLA Starch PHA Other
2010
43.3%
39.8%
11.2%
5.7%
PLA Starch 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 and Existing and
Emerging Emerging
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 - cosmetic packaging, razors, brushes, applicators, cell phones, pens and office supplies
Disposable cutlery, agricultural film
PHA
Hybrid resins for automotive, consumer electronics, toys, cosmetic packaging
Injection molding, thermoforming, extrusion coating and blow molding applications
Starch / PLA blend
Water flushable applications –water dispersible labels, health & hygiene
Rigid packaging, injection molding, flexible films, barrier resins
Starch
Plastic replacement, automotive, electronic packaging
Flower pots, agricultural filmsStarch
Injection molding, foams, thermoforming, extrusion, tire additive
Packaging film, agricultural applications, waste and shopping bags, catering
Starch
Emerging MarketsExisting MarketsPolymer
Type
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Application Roadmap
Present 20252015 2020
TIMELINE
Ap
plica
tio
n
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 of using biodegradable plastics? (may choose more than one)
A. Food packaging
B. Carrier / waste bags
C. Disposable cutlery
D. Textiles
E. 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
Cost Competitiveness
Improve upon processing economicsDevelop more efficient technologiesMonitor new technological developments, especially biotechnology
Seek cheaper feedstockIntegrated processProcess optimizationGenetically modified bacterial strains
Improvement of Properties
Develop new and better technologiesImprove blending prospectsReinforcement using natural fibersConsider incorporating nanotechnology
Structural modification of polymersCross linkageDevelopment of biocomposites or nanocomposites
Indecision Regarding
Positioning of Products
Develop products that can act as “drop-in”replacementsIntroduce innovative products that open new markets
Sustainability as a branding toolInvestigate emerging markets
Environmental, Health and
Safety Issues
Carbon footprint assessmentProper disposal guidelinesCradle to cradle conceptEnsure proper ESH testing
Closed loop processLife cycle analysis, or similarLow 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 ManagerChemicals, Materials and Food, Asia Pacific(65) 6890 [email protected]