Brazil’s flexible plastic packaging industry saw revenues and production volumes decline in 2009 due to the global economic crisis, according to a study carried out by Brazilian chemical and petrochemical consultancy MaxiQuim for national flexible plastic packaging industry association Abief.

Revenues last year totaled 9.02bn reais (US$5.05bn), down 12.5% from 10.3bn reais in 2008. “The drop was a result of lower production levels and to a 7.8% decline in average prices,” Abief president Alfredo Schmitt told journalists at a meeting in São Paulo.

In 2009, output of flexible plastic packaging was 1.51Mt compared to 1.6Mt a year earlier.

Last year’s production accounted for 47.7% of apparent consumption of polypropylene (PP), high-density polyethylene (HDPE), low-density polyethylene (LDPE) and linear low-density polyethylene (LLDPE) resins, which totaled 3.17Mt.

In 2008, 49.5% of the 3.22Mt of PP and PE resins consumed in the country were directed to production of flexible plastic packaging, according to the study.

The food industry was the main consumer of flexible plastic packaging last year, accounting for 31% of total demand. Retailers followed with 23%, of which 14% is represented by plastic bags, and industrial applications with 19%.

According to Schmitt, government incentives directly and indirectly bolstered the industry and prevented production and revenues from falling even further.

For 2010, the sector projects an increase in production volumes of at least 8% following a conservative GDP growth estimate of 5.3%, the executive said. Revenues are expected to grow more driven partially by price adjustments, Schmitt added.

The executive pointed out that raw material prices rose 11% in the first months of 2010. “Prices will inevitably be passed down the chain and consequently to final consumers.” Schmitt also explained that the expected price increases will be essential in ensuring stable margins for the industry this year.

According to Abief, of the 11,300 plastic manufacturers in the country, some 35% are flexible plastic packaging producers.

Similar Posts:

Share