Market Trends of brazil adhesives Industry
Plastic packaging with the largest share of around 64% in overall production to drive the packaging industry
- The packaging is mainly used for protection, containment, information, utility purpose, and promotion. The growing market of Brazil is expected to boost packaging usage and register a CAGR of 3.27% during the forecast period. In 2017, packaging usage accounted for 144.3 million tons of packaging, including paper and paperboard and plastic. Due to COVID-19 in 2020, the market registered a negative growth of -6.56%, this was due to disruption in the supply chain, shortage of packaging material, restrictions on the import and export of goods, and factories operating at low capacity.
- In 2021, the market registered a positive growth of 3.72%, with 147.7 million tons of packaging material used for various purposes. It is expected that the packaging industry will keep growing as there has been a rise in the e-commerce sector which has given a significant boost to the packaging industry as special packaging is required for shipping goods. The Brazil e-commerce market grew by 31% in the first half of 2021, and in 2020, it had already grown by 40%. In today's competitive market of FMCG, it has become inevitable for companies to use attractive packaging and bring innovation to their packaging to stand out from their competitors and maintain their brand image in the market.
- The Brazilian government has taken steps toward the use of plastic as regulations have been made to include recyclable plastics in their product packaging. Packaging production is majorly driven by plastic in the country, which nearly accounts for around 64% of the packaging produced in 2021. With the advancement of plastic recyclability, the plastic segment is likely to maintain a CAGR of around 3.50% during the projected period.
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Increasing demand for electric vehicles will augment the industry’s growth
- Brazil has a GDP of 8,570 USD per capita, with a growth rate of 0.8% Y-o-Y in 2022. The automotive industry sector contributes around 5.5% of the GDP. Brazil is the 8th largest producer of automotive vehicles in the world and the 2nd largest producer in Latin America after Mexico. The vehicle production comprised 76% passenger vehicles, 16% light commercial vehicles, 7% heavy trucks, and 1% buses in 2021.
- The economic slowdown in the country was observed in 2020 because of the COVID-19 impact. This results in a reduction in vehicles in terms of production, sales, and exports. The production sharply decreased by 31%, and exports decreased by almost 25% in 2020 compared to 2019. The supply chain disruptions, lockdowns in the country, and chip shortage are the major reasons behind this decline in production. Despite these situations, Brazil is able to secure the 8th position in vehicle production in the same year.
- The company has shown recovery in 2021 and onwards since the economy came back to normal through the regular supply of raw materials, imports and exports, and the opening of lockdowns. The production and exports increased by 10% and 29%, respectively, in 2021 compared to the year 2020. Electric vehicle registrations also increased by 77% in 2021 in Brazil, and it is expected to increase further in the coming years, which shows the future connectivity trend.
- The production of automobiles is going to increase further due to the investments of multinational automotive manufacturers, such as BMW, Mercedes-Benz, Audi, and Volkswagen, in Brazil.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Growing demand for logistics and transportation in Brazil will likely boost the aerospace industry
- Rapid growth of sustainable products to drive the footwear industry
- Supportive government policies for residential projects to aid the construction industry
- Rising demand for smart and aesthetic furniture to thrive the production
