Plastic compounding is a technique where plastic is blended and melted with antioxidants, reinforcements, and plastics to enhance plastic materials’ physical, aesthetic, electrical, and thermal characteristics. The rising demand for plastics from the packaging sector is expected to enhance the demand for the product. Moreover, the rising adoption of plastics from the electrical and electronics industry is expected to enhance the demand for the compounding process. These factors may incite remunerative opportunities for the industry.
As per Fortune Business Insights™ estimates, the plastic compounding market size is expected to touch USD 87.11 billion by 2026 at a CAGR of 6.5% during the forecast period.
Post COVID-19 Impact
Rapid Automation in Industries Aided in Market Expansion
The industry is slowly reviving amidst the post-COVID-19 phase. The relaxation of lockdown, the resumption of lockdown, and rapid automation in industries enhanced the demand for the plastic compounding process. Furthermore, the increasing demand for high-quality plastics from the electronics industry enhanced the adoption of the process. Moreover, the growing demand for the process from the packaging industry is likely to generate remunerative opportunities. In addition, extensive demand from the construction and automotive manufacturing industries is expected to enhance the industry growth.
Factors Driving the Industry
Growing Adoption in the Packaging Sector
The growing demand for the process from the packaging industry is likely to enhance its adoption. With increasing demand for ready-to-cook and packaged foods, the demand for effective and robust materials is likely to grow exponentially. The packaging material provides extreme rigidity and protects brittle materials from rains and contamination. These factors may enhance the industry’s growth in the coming years.
Increasing Adoption of Compounded Plastics in the Construction Industry
The rapidly developing construction industry is expected to enhance the demand for better materials. The integration of the process for the production of pipes, cables, doors, and windows is likely to enhance its demand. Furthermore, the increasing demand for the process in several residential projects is expected to enhance the industry’s growth. Furthermore, the increasing adoption of the process in commercial projects is expected to foster the adoption of plastic compounding. Compounded plastics reinforce materials and enhance their strength. Moreover, the increasing demand for attractive interiors is likely to bolster the adoption of the process.
Strong Demand for Lightweight Materials for Automobile Parts Production
The rising demand for compounded plastics for automobile parts may fuel the industry’s growth. The increasing demand for lightweight materials required for automotive production may facilitate plastic compounding demand from the industry. Furthermore, strong demand for fuel-efficient and low-emission vehicles is expected to enhance the demand for the product. The material is considered to be an ideal alternative to heavyweight materials. These factors are likely to enhance the industry’s progress.
Factors Hampering the Industry’s Progress
Raw Material Price Fluctuations
Constant fluctuations in raw materials are likely to hamper the industry’s growth. Further, as crude oil and its alternatives act as derivatives for resin production, the adoption of plastic compounding techniques may increase exponentially. These factors are likely to act as restraints for the industry.
Strategies Undertaken by Manufacturers
Several manufacturers focus on the development of effective strategies to mitigate challenges. For example, BASF enhanced the production capacity of its compounding facility situated in Altamira, Mexico, in May 2019. The rising production capacity may allow the company to meet the global plastics engineering demand. Furthermore, automation has enabled companies to elevate their production capacities. Moreover, investments in research & development may empower manufacturers to enhance their offerings significantly.
Robust Demand from Several Sectors Promises Remunerative Growth Opportunities
Rising applications of plastic compounding from the automotive, packaging, and other industries suggest that the industry is guaranteed to grow significantly in the coming years. The COVID-19 pandemic presented huge challenges. However, manufacturers devised several strategies to counter the challenges presented and came up with solutions to resume sales and production. Thus, it can be observed that the strategies implemented promise positive growth opportunities.
About the author:
Anirudh Rao is a graduate of Mass Communication and Journalism. He loves writing and watching films. He has a passion for business studies and expertise in paper research. Besides writing, he loves photography, cinematography, storytelling, music-making, and filmmaking.