-- Free trade agreements with the United States drive exports and benefit domestic plastics packaging industry
SAO PAULO, Feb. 5, 2013 /PRNewswire/ -- Their light weight and low costs are helping plastics steal the march over conventional materials such as glass, paper, and metal in the food and beverage packaging market. Plastic packaging can provide comparable - if not better - barrier properties, protection, and shelf life for foodstuff. It also offers unparalleled benefits such as transparency, which enables inspection of goods; easier transportation, as lightweight plastics make products more portable; and is easy to shape, label, and design.
New analysis from Frost & Sullivan (http://www.chemicals.frost.com), Analysis of the Plastics for Food and Beverage Packaging Market in Colombia, finds that the market earned revenues of $677.7 million in 2012 and estimates this to reach $952.3 million in 2016. Polyethylene terephthalate (PET) is the most used resin in Colombia for the production of food and beverage packaging.
"Another reason for the perceptible shift to plastics is its faster filling rates," saidFrost & Sullivan Leader Alessandra Lancellotti Ribeiro. "With less time needed to fill food packages, even when the foodstuff is hot, plastic packaging has gained a competitive edge over other materials."
Despite these advantages, the Colombian plastics market has room for improvement and product development. For instance, the resins market is concentrated and is dominated by multinational companies, and this poses entry barriers.
The competitive structure at the converter level is fragmented, which translates to low margins for converters. Fragmentation invariably spawns price wars, which allows smaller companies with less efficient cost structures to compete against larger companies. Larger companies will also shy away from offering a wide range of services in addition to their products.
The rising prices of resins and the demand for lower prices from consumers further constrict manufacturers' profit margins. Even with the development of new types of resins and more cost-effective transformation methodologies, the plastic packaging market is pegged back by down gauging and bottle light-weighting.
Manufacturers will be able to compensate for falling revenue through economy of scale, as the mature manufacturing sector is now favorably positioned to attract investments and succeed in foreign markets. Colombia's new trade agreements will also contribute to its food and beverage packaging market by increasing exports.
Colombia's free-trade agreement with the United States opened the door to the world's largest market for products and services. Consequently, there has been an increase in economic growth, exports, and jobs. The United States is the main destination for Colombian exports, accounting for 42.0 percent of the total exports in 2011.
"Improved economic conditions in Colombia have made industrialized food, which requires packaging, more affordable," noted Lancellotti Ribeiro. "As convenience is a key requirement in the market, suppliers prefer plastic because it is easier to process into various formats and allows for easy-to-open packaging that can incorporate other materials, such as paper or metal."
These outstanding properties of plastics have popularized it in the Colombian food and beverage market, raising the bar for newer materials.
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Analysis of the Plastics for Food and Beverage Packaging Market in Colombia is part of the Materials Growth Partnership Services program, which also includes research in the following markets: Asia-Pacific Biorenewable Materials Market, Western European Fall Protection Equipment Market, Food Grade Phosphoric Acid Market, and North American Flexible Packaging Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Analysis of the Plastics for Food and Beverage Packaging Market in Colombia
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SOURCE Frost & Sullivan