Prospects of BOPP Film in China

Biaxially oriented polypropylene (BOPP) film, which is colorless and odorless, has excellent properties such as non-toxicity, high transparency, high tensile strength and good impact strength. It is widely used in industries including food, clothing, medicine and chemical engineering. Multi-layer films made by compositing BOPP film with polypropylene flow cast film (CPP film), polyethylene film or polyvinyl alcohol film have excellent gas-barrier, moisture-barrier, oil-proof and tear-resistant properties. BOPP film has been developing rapidly as a packaging material in recent years.

I. Status of BOPP film production in China


Most of China’s BOPP film producers are located in southern and eastern regions, including Guangdong, Jiangsu and Zhejiang provinces. China’s BOPP film production capacity in recent years is shown in Table 1.
China started to export BOPP film from 2002, and the export volume in that year was 10 kt. However, domestic users of most high-tech BOPP film products, such as capacitor film, rely on imports. With the rapid increase in production capacity, the supply of BOPP film now exceeds the demand in China. In 2010, although the combined design capacity was 3 086 kt/a, actual output was only 2 520 kt, due to producers’ continually shrinking profit margins.
Some of China’s large BOPP film producers are listed in Table 2.
According to Applied Market Information Ltd. (AMI), a consultancy, about 6% of China’s BOPP film output in 2011was exported. In the next few years, with the construction of new production lines, the export volume will continue to increase, mainly going to neighboring countries. In 2012, China's BOPP film capacity reached 4 000 kt/a; since the market demand was 3 450 kt, the operating rate was still not high.

Table 1 BOPP film capacity in China from 2008 to 2012 (kt/a)
Year    Capacity
2008    2 316
2009    2 681
2010    3 038
2011    3 608
2012    4 000


Table 2 China’s major BOPP film producers in 2012 (kt/a)
Company    Capacity
Gettel Group Plastic Co., Ltd.    200
Jiangsu Zhongda New Material Group Co., Ltd.    175
Guangzhou Hongming Material Science and Technology Co., Ltd.    125
Fujian Times Package Films Co., Ltd.    12.5
Zhejiang Yimei Film Industry Group Co., Ltd.    120
Jiangsu Shuangliang Hengchuang Packing Co., Ltd.    115
Jieyang Yuntong Plastic Packing Co., Ltd.    100
Ningbo Asia Plastics Technology Co., Ltd.    100
FSPG Hi-Tech Co., Ltd.    95
Zhejiang Great Southeast Co., Ltd.    85



II. China’s BOPP film industry faces challenges

1. Excess capacity, high production costs and low value-add

BOPP film is one of the most important materials used in the packaging industry. In spite of BOPP film being a rapidly developing product, its development faces various problems in China: (1) most BOPP film producers have relatively small scale and the industry has not been centralized yet; (2) many producers have similar product varieties and most high-end polypropylene raw materials are imported; (3) domestic sales compete on price, minimizing profits; (4) most enterprises lack the ability to develop new products and can only produce low value-added products; (5) almost all production facilities are imported and their maintenance costs are high. The export of BOPP film made in China will be significantly affected by the low production cost of BOPP in the Middle East. The Chinese government encourages investment in downstream products and construction of a large number of new BOPP film plants. In particular, 300 kt/a of new BOPP film capacity will be put into operation in 2016.

2. High-end production equipment and raw materials rely on imports

Since all high-end production equipment is imported, Chinese producers need up-front capital. Moreover, All these factors will increase the investment risk of domestic enterprises.
Although both the quality and the yield of polypropylene, the raw material of BOPP film, have been improved significantly, some high-end polypropylene products, like products which can be used to produce products including stiff film for tobacco packaging, electrical tape and highly transparent film, still must be imported. Because the import of polypropylene requires a long procurement cycle and Chinese importers have weak ability to bargain, the production costs of Chinese enterprises remain high.

3. The BOPP film industry is impacted by substitutes

Besides the problems discussed above, China’s BOPP film industry also faces challenges from the substitutes of BOPP film. For instance, CPP film, a kind of non-stretch, non-oriented film made through melt casting, quenching and flat extrusion, has advantages over BOPP film such as lower technical barrier, less investment in equipment and lower production costs. Since CPP film is made from flat extrusion, it can easily be used for subsequent processing such as printing, making composites and aluminizing. With the improvement of polypropylene quality, equipment performance and processing capabilities, the gap between the quality of CPP film and that of BOPP film has been narrowed. The application fields of CPP have been expanded significantly, and it has gradually replaced BOPP film to make packaging film for boxes of DVDs and other audio/visual products, lids of frozen food cans, bakery packages, anti-fog packaging film for vegetables and fruit, flower packaging and label paper. In some areas where high quality packaging material is not required, CPP film can replace BOPP film due to its lower cost. With the advance of polymerization technology and the substantial expansion of production capacity for PET (polyethylene terephthalate) chips in China, the price of BOPET (biaxially oriented PET) film could be lower than that of BOPP film in the future, upsetting the BOPP film market. Moreover, new films under research, such as highly oriented HDPE (high density polyethylene) film, may replace BOPP film in some areas.


III. Prospects of China’s BOPP film industry


1. More functional BOPP film products will be developed

Downstream products which consume large amounts of BOPP film include color printing film, adhesive tape film, composite film and pearlized film. The development of BOPP film products with special applications will expand the BOPP film market and bring great economic benefits to the enterprises. Special purpose products of BOPP film include long-acting antistatic film, low (ultra-low) temperature heat-sealing film, pyrocondensation film, anti-fog film, laser film, BOPP synthetic paper, aluminizing substrate film, tangle film, stretch film, capacitor film and lithium-ion battery separator membrane.
Not only can BOPP film easily be functionalized during production, but BOPP film products with more advanced properties can be acquired through compositing, coating and deposition during secondary processing.

2. Capacity per production line is increasing

Since small production facilities (under 10 kt/a per line) cannot compete with facilities whose capacity per line is over 30kt/a, some have been modified to produce special films in order to survive. As technology improves, new BOPP film equipment shows characteristics such as larger production capacity, higher speed, greater width, higher automation, more product varieties and better performance. Normally, a new production line should at least have a capacity of 35 kt/a, a line speed of 450 m/min and a width of 10 m. However, technology’s advance will never stop. A 30 kt/a line may seem large now, but it will look relatively small in several years. China’s BOPP film producers should find out the right development orientation and “save for a rainy day.”

3. Production scale is expanding

Currently, there are about 100 BOPP film producers in China. In the past five years, some strong enterprises have ramped up their production. Now, nearly ten enterprises have a capacity over 100 kt/a each. The industry has become more centralized to form some scale economic advantages. Meanwhile, the production and innovation costs can be lowered.

4. High performance materials become popular

Polypropylene resin can make the BOPP film production line run with a speed of over 400 m/min. Before 2008, only a few enterprises in China, including Sinopec Yangzi Petrochemical Co., Ltd., could produce this new material. However, with plenty of production facilities put into operation after 2009, more and more producers in China have the ability to produce it. Several years ago, most of China’s polypropylene producers employed the Spherizone process. Now, various processes such as the Novolene process and the Unipol process are being used and many high-performance varieties of polypropylene can be produced.
Since raw material accounts for more than 80% of the total cost of BOPP film, purchasing raw material at the right time is very important for producers to increase their profitability, especially when polypropylene prices are fluctuating.