AVAILABILITY, COST MOVEMENT AND NEW DEVELOPMENTS

IN POLYMERIC FILMS

Brief Introduction :
This presentation is focused on two most important constituents of the
Polymeric Films; mainly Polyester Or PET Films and Biaxially
Oriented Polypropylene films or BOPP Films.
A brief run down of capacities in the major markets of the world
mainly U.S.A, Europe, West Asia, India, China, Japan and Korea.
Focus on India and capacity build up in India.
Emergence of India as a Power house for PET and BOPP films.
Tapping global Markets for Flexible Packaging Laminates a novel
strategy.
The supply chain and cost advantages.
New Products and newer opportunities.

World Polyester Film Demand by End use and Film gauge a historical track
and Future trends.

 Observations :
Decline in Imaging or photographic
applications and decline in Magnetic Tapes
or Audio and Video Tapes.
Growth of
Electronics

Packaging and Electrical /

Comparison of World Polyester Film Demand by end use 2006 with 2011

World Polyester Film Demand in Packaging Films.

Observation

: Emergence of Asia mainly China and India

 The data for global capacity for BOPP Films is

Presented in a different format mainly due to the
predominance of Flexible Packaging as an end use
for BOPP.
Also use of BOPP in flexible Packaging globally is
about 4 times of that of PET Films.

Regional distribution of BOPP films upto 2007.

World BOPP Film Capacity - 2002 to 2007

Region
Western Europe

2002

2003

2004

Kilotonnes

2005

2006

2007

982

1024

1092

1106

1126

1129

75

91

108

151

214

232

1057

1115

1200

1257

1340

2361

North America

586

619

635

637

624

619

Central and South America

234

277

285

300

312

350

TOTAL AMERICAS

820

896

920

937

936

969

Central and East Asia

1214

1450

2137

2693

2924

2961

South East Asia and Oceania

447

492

552

623

660

731

TOTAL ASIA - PACIFIC

1661

1942

2689

3316

3584

3692

MIDDLE EAST and AFRICA

121

155

178

225

277

287

TOTAL WORLD CAPACITY

3659

4108

4987

5735

6137

6309

Eatern Europe
TOTAL EUROPE

Observations :
Emergence of Asia Pacific as the dominant
producer of BOPP films.
Comparative slow start for Indian BOPP
manufacturers

Current Indian Capacity and Future Trends.

PET FILMS - Thin Films
Manufacturers
Jindal Polyfilms
U flex
SRF
Ester
Garware
Polyplex
MT2
Venlon
Sumilon

m.t. / Year

2008

2009

72000
54000
29000
28000
20000
20000
14000
3000
2000

84000
54000
4000
28000
20000
32000
14000
3000
2000

2010
146000
54000
54000
53000
20000
45000
14000
3000
2000

2011
171000
54000
54000
53000
20000
45000
14000
3000
2000

Notes :

Expansions : Jindal, SRF and Polyplex are expected in

second half of 2009 and hence only 50% of such
expansions are considered in 2009.
For 2010 Jindals addition of 50,000 tpa has been
considered. Esters expansion has been considered in
2010.
For 2011 Jindals addition of 25,000 tpa has been
considered.

Capacity build ups are a great source of comfort for

users of Pet film in India.
Also Pet film prices are likely to be much lower than
the prices in USA, Europe, Japan and Korea.

Current Indian Capacity and Future Trends.

BOPP Films
Manufacturers
Jindal Polyfilms
Cosmo Films
Uflex
Max India
Biax
Others
Polyplex
SRF

m.t. / Year
2008
120000
60000
30000
30000
5000
10000

2009
220000
75000
30000
30000
5000
2000
15000

2010
300000
90000
30000
30000
20000
2000
30000
15000

2011
380000
105000
30000
30000
35000
30000
30000

Notes :

In 2008 Jindals 2 new lines are expected to produce 30,000 MT as

start ups are expected in Aug and Oct 08.

Jindals additional 2 more lines are expected to start up by mid 2009.

Polyplexs & Cosmos new line is expected to contribute 50% of installed

capacity in 2009.

In 2010, Jindals further 2 more lines are expected to start up.

Polyplex and Cosmo are expected to reach full capacity.

Biax and SRF are expected to start their new lines.

2011, sees all present players reach full capacity with Jindal emerging
as the largest producer in the world by a fair distance with a total of
10 lines in India.

Emergence of India as a Power house for Pet and BOPP Films

From the data presented so far, it is evident that China and

India are the drivers of the growth momentum.
Advantage that India offers :

Unlike the Chinese policy of Buyer Beware , India offers reliability in

quality, delivery and commitment to internationally acceptable and
commonly understood ENCO Terms .
No gap between SAY WHAT I MEAN and MEAN WHAT I SAY
Enforceable and equitable Legal system. Letter of Credit not
enforceable in China.
Lower cost of production in India compared to China. However,this does
not ensure lower pricing.
Huge investment in new capacities ensuring availability of quality
products at competitive prices.
Decline of U.S.A, Europe and Japan as dependable suppliers as all
producers in these regions suffering from huge reduction in margins.

Tapping global Markets for Flexible Packaging dominates a Novel Strategy.

With the data presented so far, it is evident that the supply, pricing and
quality of Indian producers of base films of Pet, BOPP and Metallized films
are equivalent to the best in the world.
To move forward and en-cash on the opportunity available a few important
facts and suggestions.
First of all facts :
Man power cost for production and marketing of most medium or large sized
converters in India are about 4 to 5% of sales Price. In Europe and U.S.A
this is about 18 to 20%.
Pricing strategies for the major converters in Europe and U.S.A is to price
their products at about 100% over their Raw material cost as against Indian
converters pricing their products at 50% over their Raw material cost.
With imposition of Dumping Duties on Indian PET Films in USA, Brazil,
Europe, Turkey and Korea the cost of Pet films in these countries is about
20 25% higher than the price in India. This provides a great opportunity
to be competitive in the worlds largest markets.
To really en-cash on the opportunity provided by the scenario that has
emerged, I strongly recommend following strategy.

To approach the large converters in the developed markets of Europe and

USA to appoint Indian converters as their out sourcing agents.
Indian converters to gradually take over the long lead time, repeat runs
from large global converters like, ALCAN, AMCOR, PRINTPACK.
To supply fully converted products to them and at 20% lower cost to
start with :
As a rough estimate more than 30000 mt of laminates can move to Europe
and USA per year from 2009 onwards. Priced at US$ 5.00 per kg this
could provide an increased market for US$ 1.5 billion for Indian
Producers.
For reference the size of the European market for converted laminates is
US$ 16billion.
The size of the U.S laminate market is estimated at approx US$ 21
billion.
The financial health of the converting industry in Europe and U.S is
rapidly deteriorating with high cost of inputs ( as a result of Anti
Dumping duties) coupled with high labour costs. Most major converters
are either shrinking capacities or moving to lower cost operations in
Eastern Europe.
This situation provides great opportunity for Indian converters to tie up
with the European and U.S converters to provide :
Outsourcing facility from India.
Utilize15 the marketing strengths of the European and U.S converters to
aquire knowledge of these markets and gradually build up volumes.

NEW OPPORTUNITIES IN INDIA FOR FLEXIBLE PACKAGING

CONVERTERS

In the last 12 years, no new investment has been made in building polyester film lines
in Europe and the U.S.
In India vast improvements in technology has been achieved in terms of accuracy of
gauge, - flatness of the films.
Increasing speeds resulting in lower costs.
Introduction of Co-extrusion technology to reduce haze improve tensile strength and
provide ultra clear films with no extra cost.
In BOPP no major investments have been made in Europe and the U.S over the last 5
years, whereas in India BOPP production has more than doubled in the last 5 years.
Excellent quality has been achieved in BOPP films with higher barrier.
Film hot tack properties to receive extrusion coating.
Low density cavitated films for wrap around labels.
Low gauge heat sealable films.
The lowest additions are various grades of off line coated films now available in India.
One side PVDC coated PET film for High Barrier Meat Packing applications.
Both sides Acrylic Coated BOPP film for Aroma retention overwraps.
One side PVDC, other side Acrylic BOPP for High Oxygen barrier applications.
One side PVDC, other side Acrylic cavitated BOPP for high oxygen barrier biscuit
monolayer applications.
One side Acrylic Coated, other sides LTS for high speed, low SIT applications for
biscuit packaging.