Status and Prospects for Flexible Plastic Packaging

By Zeng Yanju

Rapidly increasing demand for flexible plastic packaging

The plastic packaging sector has become one of the fastest
growing sectors of the Chinese plastic industry in recent years.
According to statistics, the total output value of the packaging
industry reached RMB400 billion in 2005, accounting for 2.2% of
GDP (gross domestic product) and rising to twelfth place among
the 42 major sectors of the national economy. The ability for
technical innovation and anti-risk in packaging companies has
improved constantly in recent years. Product variety continues
to increase and product quality has improved remarkably.
   The output value of the plastic packaging sector accounts for
30% of the total output value of the packaging industry. Through
development for more than 20 years, the manufacture of plastic
packaging materials in China has developed into a sector with
complete product variety, high technical level and considerable
production scale. It holds an important position in the
packaging market and plays an indispensable role in the national
economy. Plastic films are the basic materials used in flexible
plastic packaging. The average annual output growth of plastic
films during the Tenth Five-year Plan period (2001-2005)
maintained the 15% rate that was experienced during the Ninth
Five-year Plan period (1996-2000). The demand for plastic films
in the domestic market continued to increase at an annual rate
of 9%. Both the output growth and the demand growth of plastic
films in China are almost twice as high as in advanced countries.
Plastic films in China have an extremely bright market prospect.
Take PP (polypropylene) film for instance. The per capita annual
consumption of PP film is 9kg in China but 17kg in the United
States and Europe. The output of plastic films in China today
accounts for around 40% of the total output of plastic products
and growing faster than any other products in the sector. China
has 12 thousand plastic packaging material producers with
considerable scale. Among those are more than 2 240 plastic film
producers. Sixty five of them have an output of over 5 thousand
tons a year, 25 of them have an output of over 10 thousand tons
a year and 5 of them have an output of over 50 thousand tons a
year. There are 4.3 thousand companies making filament and
braided rope products, over 500 companies making plastic foams
and 679 companies that produce packaging boxes and packaging
containers.
   Synthetic resins used in plastic film production in China
include mainly PP, PVC (polyvinyl chloride), PE (polyethylene)
and PET (polyethylene terephthalate). Processing methods
include blowing, bio-oriented stretching and flow casting. ,
Around two thirds of the plastic film produced is used as
packaging materials, around 30% is used as agricultural films
and the balance is used as electric, photosensitive, electronic
and information materials. There are 180 BOPP (bi-oriented
polypropylene) film production lines in China today with a total
capacity of 2.4431 million t/a. The average annual growth of the
output is over 15%. China's output of BOPP film can basically
meet the domestic market demand. There are 190 CPP (chlorinated
polypropylene) film production lines with a total capacity of
500 thousand t/a. Of that total, 200 thousand t/a can be produced
by the 119 domestic production lines, and the capacity of the
nearly 70 imported production lines is 300 thousand t/a. Due to
the price rise of raw materials and the price drop of products,
the profit margin of CPP film producers has narrowed. CPP film
producers should therefore conduct technical innovation to
upgrade products and enhance competitive edge.
    BOPET (bi-oriented polyester) film has developed rapidly
since 2003. Nearly 30 production lines have been added and the
capacity has increased by 400 thousand t/a. The actual output
was 160 thousand tons in 2004 and reached 650 thousand tons in
2006. There is already a capacity surplus. It is therefore
imperative for BOPET film producers to develop functional and
differential varieties. Thirteen companies in China have
introduced 18 BOPA (bi-oriented polyamide) production lines
from abroad in the past two years. The capacity has reached 74.8
thousand t/a and the output was 40 thousand tons in 2005. The
capacity for making BOPA film is therefore currently in surplus.
   The application of flexible packaging in China started in the
1970s. The output of packaging plastics was 8.075 tons in 2005
with an average annual growth of 15%, and the output of flexible
plastic packaging films reached around 4.0 million tons with an
average annual growth of 21%. The output of various plastic
packaging containers (drums, bottles and boxes) was 1.2 million
tons in 2005. Among the producers, numbering more than 600,
around 25 make over 5 thousand tons a year and 4 produce over
10 thousand tons. Major producers include Zijiang Group and
Zhuhai Zhongfu Enterprise Co., Ltd.
   With constant advances in material processing technology in
China, shopping bags, commodity bags, garbage bags and
freshness-preserving bags have become a part of people's life.
Great quantities of flexible plastic packages are also used in
the packaging of industrial goods, household utensils, clothes
and medicines. Food packages account for 60%-70% of the flexible
packaging market and packages for medical apparatuses and
medicines account for around 25%.
   There is still a considerable gap between China's level of
development in flexible packaging and the norms of the leading
countries. For example, the proportion of flexible packages is
65% in advanced countries, but only 5% in China. Moreover,
technically specialized products such as sterilized flexible
packages for teas and wines are yet to be developed here. Hence
the demand for flexible plastic packages in China will grow
rapidly in future.

Development priority of flexible plastic packages

After rapid growth in the 1990s, the flexible plastic packaging
sector in China entered a long period of stable development.
Margins are gradually shrinking and competition is becoming
fiercer. Development priorities for flexible plastic packages
in China are as follows:
    (1)  Development and application of high-blocking
packaging materials with product quality protection and product
shelf-life extension: For example, the development and
application of high-blocking co-extruded composite films should
be strengthened. Owing to their functions of product quality
protection, product staling prevention and product shelf-life
extension, high-blocking plastic packaging materials have been
developed rapidly and found extensive application.
    (2)  Development and application of sterilized packaging
materials, antibiotic packaging films and radiation-resistant
packaging films: Sterilized packaging materials and
technologies have their outstanding advantages. They need no
anticorrosive agents and no refrigeration in sterilized
conditions, retain the original nutrients and flavors of foods,
greatly extend product shelf life and are convenient to store
and transport. Their market is therefore developing rapidly, and
their applications are constantly expanding. Beyond enjoying a
considerable share of the packaging of milk products and juices,
t