Market Trends of Latin America Plastic Packaging Industry
This section covers the major market trends shaping the Latin America Plastic Packaging Market according to our research experts:
PET Material is Expected to Witness Significant Growth
- PET containers and bottles are used in a variety of applications. However, its major application includes liquid packaging. Adoption of PET can lead to up to 90% weight reduction, as compared to glass, allowing a more economical transportation process. Additionally, better mechanical qualities provide weight reduction, as compared to PE and PP bottles.
- A closer look suggests that the primary reason for the projected rise in the use of PET in the region, in the shorter run, could be the falling prices of PET resins. Due to the US-China trade war, the prices of PET resins have been continually falling. With almost all major economies of Latin America, apart from Mexico, Argentina, and Brazil, being net importing countries, this is expected to bring down the prices of bottle-grade PET resins, thereby, greatly reducing the production costs.
- Further, due to the availability of low-cost labor, recycled plastic from the region is considered to be among the cheapest in the world, and hence, it is exported to Europe and other regions. This has also helped increase the rate of recycling of PET in the region. In Mexico, PET bottle recycling plants operated by Mexico City-based PetStar recently reached an annual production capacity of 50,000 metric ton.
- However, as the usage of plastic and plastic products has potentially hazardous implications on the environment, many consumers in Latin America are starting to use environment-friendly products. This also led to many governments in these countries imposing very stringent rules and regulations in the industry, making it a relatively slower growing industry, compared to other materials.
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Mexico is Expected to Witness Significant Growth in the Flexible Plastic Packaging
- Flexible packaging has been witnessing faster growth than many other forms of packaging. It includes trends, such as e-commerce, digital printing, and sustainability, that are being used to drive market development and growth. Customers in the country are eager to pay more for specific product attributes boosted by flexible packaging. The customers are also willing to pay additional for food stored in flexible packaging.
- The companies that are involved in food processing and agribusiness (Tyson, Driscolls, Bachoco, Sunny Ridge, among others) are demanding better and greener packaging technologies than the available ones. Baked and salted snacks are also witnessing strong growth, providing extensive opportunities for flexible packaging manufacturers in the country.
- Moreover, in Dec 2019, Azelis entered into Latin America with the acquisition of Megafarma, a premier Mexican specialty distributor for pharma, food, and veterinary sectors. Headquartered in Mexico City, the company represents some of the most renowned raw material producers and serves a large number of customers in all Mexican regions. The integration of Megafarma will provide Azelis access to a promising market and creates a robust platform for growth in the global specialty chemicals and food ingredients distribution business. Instances like these are expected to boost the demand for flexible packaging, which includes pouches.
- According to the National Chamber of the Cosmetics Industry (CANIPEC) of Mexico, the Mexican consumers spend about USD 90 on cosmetic products annually. More importantly, only 10% of that expenditure is done on premium products, and hence there is massive scope for upscaling of packaging as the acceptance of premium products grows. This has been confirmed by the fact that in 2019, premium beauty products registered a 15% growth in Mexico.
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