January 14, 2020 • Posted in Market Insights

2020 Plastics Market Forecast: Rotational Molding and Color & Compounding

Capitalizing on Opportunities in Rotational Molding and Color & Compounding

In this installment of the 2020 Plastics Market Forecast series, Brian Brantley, our market manager for Rotational Molding, and Pete Nutley, our market manager for Color & Compounding, discuss the opportunities they see in their respective markets, including sustainability, automation, and investments. Their responses anticipate a year of growth for both markets.

Brian Brantley kicks us off by sharing his predictions for the Rotational Molding market and which trends businesses should focus on in 2020.

“In 2019, we saw a mix of some companies getting acquired, while others were shutting their doors. Here are two areas where I see rotational molders making the biggest impact in 2020:

Sustainability: Retail customers are increasingly requesting eco-friendly products, making the need for sustainable practices greater than ever. As a result, parts processors will continue to look for ways to incorporate more sustainable practices into their operations and increase their use of recycled materials. Many companies are taking note. In 2019, PepsiCo announced its initiative to reduce its use of virgin plastics by 35% and increase its use of recycled material in plastics packaging to 25% over the next five years.

At M. Holland, we’re seeing an uptick in interest for sustainable materials and applications from parts processors that are experiencing customer demand for these types of solutions. In 2020, we’ll be focusing our sustainability efforts in this market on connecting our customers with new re-processors and showing them the advantages of downgauging (reducing the amount of plastic in their parts).

Automation: Rotational Molding is a labor-intensive process. In fact, Plastics Custom Research Services noted in its final North American Rotational Molding Business report that the average number of employees per machine has risen over the last 25 years, even as robotics and automation are creating more efficient processes. To help increase profitability and combat the skilled labor shortage, I expect to see further advancements in automation in 2020, giving it a more central role in the most labor-intensive rotational molding processes.

Rotational molders will likely turn to feeding systems, which disperse resin directly into the mold. This process decreases the need for physical labor, while also reducing waste, which has an added benefit of sustainability. Still, other companies are working on products that will use robotics to trim parts. All of these tactics will reduce the need for labor, creating more streamlined and efficient processes.”

M. Holland Brian BrantleyAuthored by Brian Brantley, Market Manager, Rotational Molding

Where automation is pushing boundaries in Rotational Molding, additive manufacturing and sustainability are key drivers of opportunity in the Color & Compounding market. Next, our market manager for Color & Compounding, Pete Nutley discusses market growth areas and trends, providing insight into what we can expect from this segment as we enter the new decade. Here’s what Pete has to share:

“I’d like to start by re-visiting my predictions from last year. First, sustainability was a big area of focus for everyone in plastics. It’s clear the industry needs to address the issues of plastic waste and sustainability, and I’m proud to work for a company that is willing to tackle it head-on. M. Holland will continue making strides in this area in 2020 as we guide clients and suppliers toward materials that address plastics waste and sustainability concerns. With post-industrial recycled content (PIR) and post-consumer recycled content (PCR), there’s plenty of interest in the broader market.

There’s more to look forward to in 2020 as we continue to refine products and service offerings to address differing needs across compounding segments. What can we expect next year?

  1. Continued Growth: The global compounding market space is worth more than an estimated $146 billion, with the North America Free Trade Agreement (NAFTA) making up 17%, or about $25.3 billion. NAFTA is projected to grow at 3% CAGR over the next five years. I predict segments like masterbatch and reclamation will grow even faster.
  2. More Investments in Compounding: The compounding market space saw at least eight NAFTA-publicized investments in 2019, and even more globally through expansion or acquisition. We also continue to see more private equity investments, as more companies acquire organizations that focus on compounding.
  3. Trends: Sustainability, Additive Manufacturing, and Material Pricing: Just like we saw in 2019, sustainability will continue to be a major area of opportunity in compounding in 2020. The companies that can tell a compelling story with their PIR and PCR efforts will benefit the most. We’ll also see compounds enhancing the properties of recycled feedstocks, effectively creating upcycled products.

As non-traditional forms of manufacturing (e.g. additive manufacturing) gain steam, we’ll need compounds for additive manufacturing to address differences in physical properties. For instance, we’ll see the introduction of Underwriters Laboratories (UL) “blue” cards, which identify the testing of physical properties by different processes and machines.

The oversupplied polymer market will create opportunities in material pricing, but it will also bring challenges. Polymer buyers must understand the pedigree and compliance of feedstocks. For compounders selling products globally, they’ll need to meet global regulations or face severe penalties.

It’s an exciting time that will require intense focus and hard work, but I’m looking forward to all that lies ahead!”

M. Holland Peter NutleyAuthored by Peter Nutley, Market Manager, Color & Compounding

In our last installment of the 2020 Plastics Market Forecast series, M. Holland’s market manager for Automotive, Matt Zessin, will discuss what the automotive market has in store for 2020. Don’t forget to check out previously-published market insights from our Healthcare, 3D Printing, Wire & Cable, Electrical & Electronics, and Flexible Packaging market managers.

What are you most excited about for the Rotational Molding and Color & Compounding markets in 2020? Let us know on Twitter, LinkedIn, or Facebook.

If you enjoyed this article, take a look at M. Holland’s 2019 Market Trends Series:

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