The COVID-19 outbreak and aftermath have pushed manufacturers in the plastic compounding market to step up and meet critical demands, especially in the medical milieu. Compounding Solutions, a leader in plastic compounding for medical applications, recently collaborated with OEMs to address the burgeoning demand for high-quality compounds and polymers required in devices used for the prevention and treatment of coronavirus infection. Such industry-wide efforts have played a vital role in pushing market penetration during the pandemic.
Industry participants have recently been implementing various other strategies to make a mark in the booming sector. Notably, plastics have found their way into essentially all spheres, which has further increased the significance of plastic compounding.
According to a Global Market Insights Inc. report, the global plastic compounding market size is estimated to reach more than $63.2 billion in revenue by 2028. This article explores the plastic compounding process and the latest developments in the market, underlining measures taken by some key companies operating in the sector.
What does the plastic compounding process entail?
Plastic compounding involves melt-blending of plastics with certain additives with the intention to change the physical, thermal, electrical, and aesthetic attributes of the material. The compounding process utilizes several materials, including polyethylene, polypropylene, polyvinyl chloride, nylon, polyethylene terephthalate, acrylonitrile butadiene styrene (ABS), polyurethane, and polystyrene & expanded polystyrene, among other polymers.
The process converts a base resin into the desired form of plastic with properties that make the material more efficient, uniform, and effective. The agents and additives as well as other products like anti-abrasion additives that are introduced in the process can improve the end product. This pelletized material then goes through extrusion or molding to take the shape of a plastic part.
Some key trends that companies are leveraging to gain a better business standing in the plastic compounding market have been highlighted hereunder:
- Increasing adoption of effective expansion plans
Industry players have been attempting to penetrate newer regions and niche markets to expand their presence in the global sector. In March 2022, chemicals behemoth BASF’s Indian arm increased the production capacity of its Ultramid polyamide range to accommodate the rocketing market demand. These polyamide grades are adopted widely in the electrical & electronics sector, industrial products, automotive applications, and consumer goods.
SABIC, a prominent chemicals manufacturer, started up its novel PP (polypropylene) compounding line in Belgium in October 2021. The new line extended the firm’s PP production capacity at its site in Genk. The new facility has been equipped with large-scale extrusion technology to cater to the surging demand for a consistent and reliable supply of high-performance and high-quality PP compounds.
Increasing implementation of similar expansion strategies by companies in the industry has been favorable for product penetration.
2 . Rising prominence of sustainability across operations
The plastics industry has been seeking ways to integrate more recycled polymeric material in major sectors to meet sustainability goals while addressing stringent regulatory requirements and consumer concerns to decrease plastic waste. One notable challenge that persists in this context is the quality deficiency in polymers that arise from the mechanical and thermal stress that the material faces during the recycling process.
As a result, recycled plastics contain contaminants and impurities that expedite polymer degradation, eventually altering the material’s properties. Thus, manufacturers are adopting different measures to tackle such performance and quality issues while promoting sustainability.
In September 2021, SABIC launched its first automotive grades with mechanically recycled content as part of its TRUCIRCLE range of circular solutions. The new resins, viz., the T2E-3320EH PP compound and the XENOY T2NX2500UV and T2NX5230 resins, contain nearly 29% recycled content and promise superior performance akin to that of incumbent virgin resins, complementing consumers’ sustainability objectives.
In October 2021, Dow, an expert in sustainable solutions, announced several initiatives in order to establish an initial supply of completely circular polymers in 2022. These initiatives supplemented the company’s efforts to reduce greenhouse gas (GHG) emissions, prevent plastic waste, and supply recycled plastic products to consumers that are the same as virgin plastics created using fossil fuel-based feedstocks in terms of performance. Such moves have been helpful in integrating sustainability across the industry.
3 . Strategic alliances among key industry players
Leading companies in the plastic compounding market have been formulating efficient strategies, such as mergers & acquisitions, and investing in product development and innovation to improve their product offerings. BASF is one such industry leader that has been engaging in various expansion moves to maintain its position in the business.
In January 2020, BASF closed the takeover of chemicals giant Solvay’s polyamide business to widen its polyamide capabilities with the incorporation of well-known products like Technyl, which would enable it to provide its customers with a broader array of engineering plastics solutions, particularly in the e-mobility and self-driving spaces.
With the September 2021 launch of IrgaCycle, BASF introduced a novel range of additive solutions to cater to the prevalent need in plastics recycling. Recently, in March 2022, the company inked a strategic co-operation deal with Zhejiang REEF Technology Co., Ltd., a plastics products specialist, to develop cutting-edge recyclate formulations for applications in the packaging, automotive, and consumer industries.
As part of this deal, BASF provided the IrgaCycle additives as well as its technical expertise in recycled polymer formulations. Similar initiatives by companies are positively influencing the competitive landscape of the plastic compounding industry.
4 . Growing emphasis of manufacturers on strengthening product portfolios
By focusing on product innovation and development, companies in the industry have been focusing on advancing and fortifying their existing product portfolios. In May 2022, BASF introduced the Ultramid A3U44G6 DC, expanding its range of flame-retardant engineering plastics for the e-mobility sphere.
In another instance, in September 2020, custom compounder RTP acquired patents for anti-scratch additives from TenasiTech, a Boston-based additive supplier, to broaden its surface protection portfolio. RTP stated that the base technology substantially enhanced the mar and scratch resistance of injection molded thermoplastics.
Such efforts and strategies adopted by companies have been beneficial for the product landscape of the plastic compounding market in recent years. The enhanced product offerings by manufacturers are set to support market growth in the coming years.
With companies investing in varied strategies to improve their business standing, the global industry has witnessed significant development in key regions. Prominent efforts by manufacturers to address pertinent consumer and environmental needs are expected to shape the future of the plastic compounding market.