Polypropylene Woven Bags & Sacks Market: Focus Shifts to Emerging Nations as U.S. and Europe Saturate

PP woven bags sacks

by Shambhu Nath- Senior Research Consultant

Mr. Shambhu Nath with an experience nearing a decade, has helped over 50 large and medium to small business enterprise to foray into new markets, increase footprint in the existing bucket and understand the nature of the beast. These beasts are the companies that have been primarily engaged in chemicals, material or packaging activities, and encountering challenges either in maintaining P&L or staying ahead of their competitors. He has authored over 300 industry research papers consisting critical information such as market growth, total addressable market, serviceable addressable market, market size, forecast, player strategies, market share estimates and winning imperatives along with recommendations.

 

The environmental movement has virtually declared a war against plastic, and yet, polypropylene is being manufactured and used at a large scale across the world. IKEA – the world’s leading furniture retail company – recently collaborated with Neste to start the world’s first large-scale production capacity of bio-based and recyclable polypropylene. This entails the transition of a mounting number of industrial sectors towards burgeoning use of environment-friendly plastic components in several products.

As polypropylene is one of the most versatile polymers, woven polypropylene finds numerous applications in a wide range of industries, especially in the packaging industry. The increasing use of polypropylene (PP) woven bags & sacks as packaging solutions is attributed to the excellent material characteristics and eco-friendly properties of polypropylene. This is expected to result in the global market for PP woven bags & sacks surpassing US$ 3.5 billion by the end of 2018.

Though environmental awareness is high among consumers and manufacturers in the developed nations, like the U.S. and Europe, the market for PP woven bags & sacks is much larger in the emerging nations, such as China and India. Why are emerging economies outpacing developed economies in the production and sales of PP woven bags & sacks? What is restricting the growth of the PP woven bags & sacks market in the developed countries?

Existing Regulatory Framework Confines the Market Growth in the U.S. and EU

The imposition of environmental rules in the developed countries is promoting the use of eco-friendly materials in the packaging industry. Ideally, this should boost the adoption of PP woven bags & sacks in the leading economies. On the contrary, the stringency of these regulations associated with the manufacturing of polypropylene is creating numerous challenges for manufacturers in these regions.

For example, in the U.S., plastic and rubber manufacturers need to comply with the regulations developed by various regulatory bodies, including the U.S. Environmental Protection Agency (EPA). Various processes involved in the manufacturing of polypropylene can lead to air as well as water pollution, which has led to various U.S. states establishing regulations on the production of polypropylene. In order to protect the environment from harmful emissions released during the manufacturing of polypropylene, the Texas Commission on Environmental Quality has developed strict rules that all the polypropylene manufacturers in the region must conform to. This is the primary reason why polypropylene manufacturers in the country fail to maintain competitive prices of polypropylene.

Higher prices of polypropylene manufactured in these regions ultimately affect the sales of PP woven bags & sacks in end-user industries. Whereas, the absence of stringent regulations in the emerging nations and lower costs of raw materials, manufacturers are able to offer PP woven bags & sacks at much cheaper rates.

Average Growth in Construction Activities in Developed Countries Reduce the Adoption of PP Woven Bags & Sacks

Owing to their suitability as a packaging solution for raw materials used in construction activities, the demand for PP woven bags remains the highest in the building and construction industry. Especially in the cement industry, PP woven bags & sacks are widely used as the most appropriate packaging solution. The global demand for PP woven bags & sacks in the building & construction industry is expected to surpass US$ 1.1 billion by the end of 2018.

However, in developed nations, such as the U.S., construction activities are growing at a moderate pace. The value of total construction activities in the U.S. was US$ 1.24 million in June 2017, which increased up to US$ 1.33 million in May 2018 and then it declined to reach US$ 1.31 million in June 2018. Also, in the European Union, investments in the construction sector are likely to remain steady in the upcoming years. This signifies that the building & construction industry in the U.S. has reached its saturation, which also makes a significant impact on the applications of PP woven bags & sacks in the country.

In the emerging nations, on the other hand, the infrastructure developed has gained momentum post the Great Recession. As stated by the Organisation for Economic Co-operation and Development (OECD), the emerging Asia is expected to grow by approx. 6.3% per year during 2018-22. As the negative effects of the Great Recession continue to ebb, the building & construction sector in emerging markets is expected to increase in the near future.

Eventually, as the building and construction industry accounts for over 32% of the total global share of the PP woven bags & sacks market, emerging nations, including China and India, are expected to dominate the market in the coming years.

The insights presented here are from a research study on Polypropylene Woven Bags and Sacks Market by Fact.MR.

 

(1)  IKEA and Neste take a significant step towards a fossil-free future. (June 2018)  https://www.neste.com/ikea-and-neste-take-significant-step-towards-fossil-free-future

(2) Standards of Performance for Volatile Organic Compound (VOC) Emissions from the Polymer Manufacturing Industry (2018) https://www.ecfr.gov/cgi-bin/text-idx?node=sp40.7.60.ddd

(3)  Value of Construction Put in Place – Seasonally Adjusted Annual Rate (2018) https://www.census.gov/construction/c30/pdf/totsa.pdf