Excellent growth ahead for the polypropylene industry

Phillip Townsend Associates, a global consulting company based in Houston, has released its 7th annual report on the polypropylene (PP) industry. For the year 2000, global polypropylene consumption grew by 6% over the previous year.

'With further consolidation of the polypropylene industry, globalisation is a hot topic again. It is not surprising that Basell is the leader of the pack, but what is interesting is the changes that have occurred in the next tier of polypropylene producers,' says Kevin Smith, project manager of Townsend's Polypropylene Annual Report.

Smith adds, 'There are only three truly global polypropylene producers: Basell, ExxonMobil and Dow Chemical. BP Chemicals, Atofina, Sumitomo and Formosa Plastics are on the verge of globalisation. Other major producers, like Borealis, DSM, Reliance, PetroChina, SINOPEC and Sunoco (Aristech) are only producers in one region.'

According to the report, which includes profiles for over 50 major polypropylene producers, the big opportunities for these producers are in injection moulding and fibres. Understanding the relative importance of each regionally will be critical to success. 'For example, North American converters have not seized the opportunity for blow moulded polypropylene bottles like other regions - they still prefer alternative materials like HDPE or PET', says Smith.

Smith concludes, 'An end-use industry that is already globalised will temporarily apply pressure on its resin converters to use the same grade in all regions. Global producers like Basell are well placed to develop business with these companies.'

Townsend still predicts excellent growth (over 7% globally) over the next 5 years, according to Smith.