Under the acronym of BOPP, a powerful industry is going on resulting in high and steady worldwide growth rates.
The rise of this industry is established on the special features of such a versatile and extraordinary material as Biaxially Oriented Polypropylene actually is, this has made the BOPP be the uncontestable star in the flexible packaging industry.
The unstoppable consumption of packaged food along with the development of emerging countries are key factors which ensure the current and future demand for this material.
The wealth of in-detail studies conducted by specialized consultants have foreseen the industry growing around 4% annually to 2020 span, resulting in a production of over ten million tons of BOPP film.
To the same extent, the latest figures provided by the largest BOPP film producers show annual turnovers of thousands million euros.
They are overwhelming figures, even for someone like me who has experienced the development and evolution of this market over the last thirty years.
My link with this industry goes back to 1987, when I traveled to Fujiyama, Japan, being part of a technical crew in charge of studying and being trained about this technology which, later on, we would end up applying in the first Spanish BOPP film manufacturer.
At personal scope, I have fun when I remember the shock sparked by such a special and different culture and lifestyle to which I had to get used quickly, mind you, coming across with a few memorable anecdotes.
Concerning the professional context, this experience marked the beginning of what has been my career so far, and my first contact with an emerging industry identified, those days, by this three factors.
Firstly, an extremely sophisticated technology and highly specialized, which required vastly qualified professionals. A market which was pretty dependent on both the raw materials producers and the multinationals which owned the technical knowledge and the necessary economic resources to acquire the pricey machinery. And, finally, a market difficult to tap into on account of the thorough protection of the know-how, encrypted under high levels of confidentiality and secrecy.
Features like those led the BOPP manufacturers to be only a few and implemented just in industrialized countries such as Japan, USA, and a part of Europe.
Since then, during the following twenty years, my career went by providing with technical support, at the production facilities, to the main worldwide BOPP manufacturers located in Europe, Asia and America.
Those journeys around the world were the ones which daily link me to the market and the different stages it went through. In this way, I could realize how the starting situation remained for only a few years due to the fact that several factors boosting the spread of BOPP manufacturers were added to the normal evolution of this market, specially highlighting one of them, the disclosing of the know-how.
This disclosing happened because of the knowledge leakage triggered by the movement of technical people from already consolidated large companies to either startups or companies already settled in the market searching for coming into this business area. It is worth to mention the effect of the information flow from raw material and machinery producers on this knowledge transfer.
As an immediate consequence, this progressive and easier access to the know-how lured powerful investors and resulted in the implementation of numerous production factories in developing countries such as India, South America or China, where the low labor expenses and the growing demand have been especially appealing.
Thus, for instance, China moved from incorporating to this market with scarce factories set up in the eighties to featuring more than sixty nowadays.
Moreover, the expansion of the BOPP has remarkably contributed to the evolution of both the technology and the machinery. So it is amazing to study how kicking off with the first portable extruder, invented by Mr. Erich Munhch in 1973, now we are checking out the current automated ones managed by PLCs capable of reaching eight and even twelve meters width, with thickness able to be downgauged below twelve microns, although this deserves a whole new chapter.
BOPP at two speeds
Within this global context, the current situation of BOPP shows a growing industry, doing it at two speeds:
Speed A pushed by two parameters: production rate and price.
Speed B boosted by two factors: R&D outcomes and specialization.
Looking at the first scenario, we come across a situation dealing with massive investments in large production capabilities, which leads to an overproduction not being able to take in by the market and a competence based on prices and low-profit margins.
In this speed A the industry is focused on both a quick growth and the sale of commodities addressed to less demanding markets.
So, the market strategy is based on the set up of high production rate machinery and reducing the raw material and labor expenses to, later on, tap into the market by competing through reduced prices.
Looking at the second scenario also named speed B, we find an industry focused on the research and with marked intentions to stir the market up by developing highly specialized products and serving cutting-edge applications.
The market strategy, in this case, is way different; seeking for developing auxiliary and side processes to obtain very specialized films requiring complex technical knowledge. These processes usually are particular coatings which provide the BOPP with additional characteristics which mean a great value added.
It has to do with implementing new manufacturing techniques through changes in the film structure which allow feeding the different layers independently, enabling the BOPP as a real alternative to other plastic materials, like the PET, being more competitive both in price and yield.
Besides, there is a will to bring the BOPP technology to other sectors thus allowing to release the full potential of the polymeric materials, just as their application in emerging markets. In this way, they jump into the market to compete by means of quality and exclusiveness.
The main challenge the companies working under these fundaments have to face is how to protect their know-how, coming back to those confidentiality levels found at the beginning of this sector. Therefore, it is necessary that every involved actor, raw materials, auxiliary processes and so on have to be integrated into their own production stream, that has leaded to great companies taking over competitors and smaller providers of auxiliary processes.
Mergers between them and masterbatch producers are to highlight, enabling them to develop their own mixtures and raw materials, without any intervention from external agents. Counting on all of them they add experience and knowledge, make new synergies and global power centers, and, above all, they make sure their formulations will not be disclosed.
To sum up, therefore, we face with a market which tends to turn into a monopoly, and in the presence of a plastic industry whose next evolutive stage will be necessarily marked by the development of sustainable materials, it means compostable, reusable, or recyclable, as by its total incorporation to the new industrial revolution, identified by the digitalization and automation of all of their processes.
As it is said in my hometown, live to see…
CEO HT Masterbatch