Lacking a mainstream product, firms continue to invest in costly research and development
New York, NY (PRWEB) October 20, 2014
The Bioplastics Manufacturing industry has experienced steady growth over the five years to 2014. Concerns over the future of petroleum-based plastics have created a surge in demand for bioplastics that are more recyclable and sustainable. Furthermore, the rising price of crude oil has put plastics manufacturing firms at a disadvantage, as they must increase prices to maintain profit margins. All of these factors, combined with a steady flow of government support, have enabled the industry to make substantial strides forward despite lingering recessionary effects. In the five years to 2014, IBISWorld estimates industry revenue to grow. The US Bioplastics Manufacturing industry has a low level of concentration. The four largest industry participants hold a combined market share less than 15.0% of revenue. Concentration has edged down over the past few years, reflecting the entry of new industry participants that produce bioplastics from a range of renewable sources. This downward trend is expected to continue as more firms enter the market.
IBISWorld Economic Analyst Daniel Carusotto says in the updated report, “rising environmental awareness over the period has encouraged the government and large companies to promote the use of bioplastics, directly benefiting the industry.” Companies such as PepsiCo and Coca-Cola have begun using bioplastics in lieu of traditional petroleum-based plastics. Using bioplastics has helped companies reduce input volatility associated with using petroleum-based products and at the same time, appeal to the environmentally friendly consumer. Additionally, the Bioplastics Manufacturing industry has benefited from the government's push to transition to more environmentally friendly products, such as bioplastics. In fact, the governement instituted a program called Biopreffered, which gives bio-based materials preference over petroleum-based products in government purchase decisions. Despite these positive trends, the industry is still in its beginning stages, leading to high expenditure on research and development. High expenditure has led to compressed profit margins for industry participants, with many operating at a loss.
In the five years to 2019, IBISWorld expects that a stronger economic environment, expansion into new markets and positive legislation will benefit demand for industry products. “Due to higher levels of consumer spending, more packing products will be needed, leading to higher demand for plastics,” Carusotto says in the updated report. Additionally, new markets, such as the construction and medical segments, will open up a new source of demand for industry participants. As a result of these positive trends, IBISWorld expects industry revenue to increase.
For more information, visit IBISWorld’s Bioplastics Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures bioplastics, organic plastics derived from renewable biomass sources. Designed to biodegrade, bioplastics are made from sources such as vegetable oil, cornstarch, pea starch or microbiota.
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