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Extrusion Coating Market Overview
Global extrusion coating market is estimated to be valued at $3,703.8 million in 2017 and is projected to witness a CAGR of 4.2% during the forecast period. Expanding food and beverage industry and increasing economic growth are the key factors driving the market growth. Extrusion coating refers to the process of applying molten plastic to different types of substrates, such as paper and paperboard, aluminum foil, and polymer films. It helps protect these substrates from moisture, water vapor, grease, and heat besides acting as an oxygen and aroma barrier.
GLOBAL EXTRUSION COATING MARKET, BY APPLICATION, KILOTONS (2013-2023)
Based on material type, the extrusion coating market has been categorized into low-density polyethylene (LDPE), ethylene-vinyl acetate (EVA), polypropylene (PP), and others, where the category of “others” includes high-density polyethylene (HDPE), ethylene butyl acrylate (EBA), and polyethylene terephthalate (PET). In terms of value, LDPE held the largest share in the market during the historical period and is estimated to contribute more than 70.0% share to the market in 2017. Increasing demand for LDPE resins for the production of films, which are used as packaging materials, bags, and sacks, is the prime factor for the dominance of this material type in the market.
On the basis of substrate, the extrusion coating market has been categorized into paper and paperboard, polymer film, aluminum foil, and others, where the category of “others” includes cellulose and nonwovens. Paper and paperboard is the leading substrate in the extrusion coating market and is estimated to contribute more than 45.0% in terms of value to the market in 2017. This can be attributed to its wide usage in different types of cartons, sacks, bags, and corrugated boxes.
The extrusion coating market has also been categorized into liquid packaging, flexible packaging, commercial application, and photographic application. Liquid packaging was the largest application area of extrusion coating materials during the historical period and is estimated to account for more than 40.0% share in terms of volume in the market in 2017. This can be attributed to the growing use of these materials in liquid packaging to increase the salability of different types of liquid and semi-solid food items, such as milk, juice, and sauce.
Geographically, Asia-Pacific (APAC) has been the largest market for these materials in terms of value. During the forecast period, the extrusion coating market is also expected to witness the highest growth in APAC. Increasing demand for these materials for packaging applications in different industries, such as food and beverage, healthcare, and personal care, is driving the market growth in the region.
Extrusion Coating Market Dynamics
Rising demand for extrusion coating materials in emerging economies is providing ample growth opportunities to the players in the market. Expanding food and beverage industry is the major factor driving the extrusion coating market growth.
The global food and beverage industry has witnessed substantial growth over the last decade, which is expected to continue in the coming years. This can be majorly attributed to the rise in disposable income, growth in population, increase in government regulations, and rise in awareness among people regarding health.
Growing health concerns among people are stimulating the demand for low-calorie, sugar-free, gluten-free, and lactose-free food products. Rise in the trend for convenience food products, such as ready-to-eat, ready-to-cook, and ready-to-drink items, is another factor boosting the growth of the food and beverage industry. These materials play a significant role in packaging applications in the food and beverage industry, as they help protect products from external environmental factors besides lending an aesthetic appeal to them. Altogether, these factors are expected to drive the growth of the extrusion coating market.
The demand for these materials in emerging economies, such as APAC, Latin America (LATAM), and Middle East and Africa (MEA), is on the rise, owing to the rapid growth of industries such as food and beverage, healthcare, personal care, electronics, consumer goods, which make use of packaging materials for their products.
In addition, rising disposable income of people in these economies and increasing industrial R&D activities resulting in new product launches are factors supporting the increasing adoption of consumer products, which, in turn, require these materials for their packaging. In addition, developing countries such as South Korea, India, Brazil, and China are expected to witness strong economic growth in the coming years owing to rapid industrialization and urbanization. Altogether, these factors are expected to provide potential growth opportunities to the players in the extrusion coating market.
Primary raw materials used in the production of LDPE, EVA, and PP are ethylene, propylene, and vinyl acetate. Occasional ethylene supply disruptions due to extended maintenance periods at production facilities and unplanned shutdowns at certain sites create a demand–supply gap, which results in their increased prices.
In addition, continuously rising demand for petrochemical products has further encouraged international chemical companies to increase the price of ethylene, which is used as the base feedstock for the production of numerous products in the petrochemical industry. Thus, fluctuations in the prices and availability of raw materials may hamper the extrusion coating market growth in the coming years.
Extrusion Coating Market Competitive Landscape
Some of the major players operating in the global extrusion coating market are Borealis AG, Chevron Phillips Chemical Company LP, DowDuPont Inc., Exxon Mobil Corporation, INEOS Group Holdings S.A., LyondellBasell Industries N.V., Mondi Group, Qenos Pty. Ltd., SABIC, and Westlake Chemical Corporation.