Functional and barrier coatings to hit $5bn by 2018

Monday, 25 November, 2013

A new report from Smithers Pira estimates the global market for functional and barrier coatings used in paper and board applications will reach $5.1 billion by 2018.

Worth an estimated $4.2 billion in 2012, the market is expected to increase by almost 420,000 tonnes by 2018.

The report, The Future of Functional and Barrier Coatings for Paper and Board to 2018, says that demand is fairly evenly spread across the three major sectors: the Americas, EMEA and Asia-Pacific. However, in coming years there will be a marked shift towards the Asia-Pacific sector and China will increase its share to 26% of the market in 2018, while the US will slip to 25%.

Changes in consumer lifestyles and demographics - such as growing demand for convenience, on-the-go meals and smaller packs - have led to increased use of functional and barrier coatings for the paper and board sector.

Recycling and sustainability concerns are also important factors, the report shows. Many retailers are insisting on traceability of source materials and environmental awareness in their suppliers, creating a need for biodegradable, recyclable or compostable coating materials for these packaging applications.

Food and beverage packaging accounts for 85% of these coating materials, the report reveals. Within this sector, the fresh, chilled and frozen food sectors are expected to experience above-average growth in demand, according to the report.

Almost 40% of coating materials are used in the beverage and liquids sector, mainly in the form of extrusion polymers and aluminium foil laminate.

Despite the expected economic recovery, cost remains at the forefront of everyone’s minds, from the raw material suppliers through to the final consumers. Many coatings consist of polyethylene or aluminium or both, so raw material price volatility in these markets increases the pressure on manufacturers to come up with viable alternatives at competitive prices, the report found.

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