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Press Release: UK Plastic Packaging Market Development Report

Released: July 2009

After researching the UK plastic packaging market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2004-2008:

In 2008 a 1% reduction took the value of the plastic packaging market to £3.199 billion. This compounded a 5% reduction recorded in the previous year. Prior to this year-on-year increases were recorded with growth rates of between 3% and 6%. Overall the value of the sector increased by a cumulative 3% between 2004 and 2008. The decline evident during 2007 and 2008, is believed to be due to the deteriorating economic conditions which were evident in the period. Furthermore the trend towards more recyclable packaging materials is believed to have dampened demand. Indeed, especially in the consumer sector a shift is evident away from polymer based plastic packaging towards biodegradable plastics. Furthermore there has been an increased focus on reducing the amount of packaging used. Nonetheless, plastic remains one of the most popular packaging materials, accounting for an estimated 36% of the total packaging market in 2008, compared with a lower 35% in 2004. Furthermore, the market has continued to gain market share from other packaging materials, in particular glass packaging, as plastic benefits from a number of advantages, including the design adaptability and relatively light weight of the material. In addition, the industry has been buoyed by demand for plastic bottles and closures, as well as increased demand from the healthcare sector.

Market Forecast 2009-2013:

The current economic downturn is expected to continue to contract the total value of the UK market for plastic packaging in the 2009 and 2010. In 2009 a 8% reduction is anticipated reducing the total value of the sector to £2.957 billion. MBD believe that any recovery is not likely until the second half of 2010 and thus still anticipate the sector to contract in value by a further 2% to £2.911 billion. Post downturn MBD expect the sector to exhibit year-on-year growth, with rates of between 2% and 3% forecast. In 2013 the value of the sector is predicted to reach £3.117 billion, representing a 2% increase for the year, and a negligible reduction compared with 2008.The sector is projected to be affected by high energy prices, as well as raw material costs which companies have so far during the year had to pass on to customers. The market is becoming increasingly dependent on the trends in the end use markets, many of which are reaching a level of maturity, and growth is likely to be more dependent on the efforts by end users to utilise packaging to stimulate product differentiation. Furthermore, market development is expected to be restricted by the trend towards reducing packaging and towards using more recyclable materials, which is largely driven by legislative requirements. However, plastic is expected to remain a popular packaging material in a number of sectors.

Note to Editors:

MBD specialises in business to business market research. The range of reports and industries in which we operate in is constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

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