Modest improvements are set to occur for plastic bottle manufacturers over the next five years, as future demand for bottled beverages takes off. For these reasons, industry research firm IBISWorld has updated a report on the Plastic Bottle Manufacturing industry in its growing industry report collection.
Los Angeles, CA (PRWEB) January 04, 2013
Whether a consumer is buying a soda at the corner store or purchasing laundry detergent at the supermarket, plastic is the preferred way to package staple products. The prevalence of plastic containers and bottles, however, has not kept the industry immune to economic volatility. In the five years to 2012, industry revenue is expected to decrease at an average annual rate of 0.4% to $12.4 billion. “The Plastic Bottle Manufacturing industry relies on several key industries to purchase its products,” says IBISWorld industry analyst Lauren Setar. “Soft drink producers, for example, account for nearly half of industry revenue. However, since 2007, revenue in the Soda Production industry has declined due to changes in consumer tastes and reduced spending during the recession.” This decline has led to weakened demand for the plastic bottles in which soft drinks are packaged. In 2010, downstream markets began their recovery from the recession, and as a result, revenue for the industry is expected to rise 2.4% in 2012.
Meanwhile, the Plastic Bottle Manufacturing industry has had to contend with production abroad; industry imports are expected to grow at an average annual rate of 5.9% in the five years to 2012. The United States has been a net importer of miscellaneous plastic bottles and containers since 2004. As globalization increases, domestic companies will continue to shift manufacturing abroad to leverage lower production costs, though foreign imports will continue to challenge the viability of domestic manufacturing. The industry has a moderate level of market share concentration. Relationships and long-term contracts with major customers have allowed the industry to be dominated by a few key players, including major companies the Reynolds Group, Plastipak, the Consolidated Container Company and Rexam, rather than fragmented like other plastic manufacturing industries. Over the past five years, the industry's concentration has increased as a result of a growing number of mergers and acquisitions. “The recent upswing in acquisitions indicates that companies are making a concerted effort to increase profitability by claiming larger portions of market share,” adds Setar. “From 2007 to 2012, the number of establishments and enterprises has fallen, causing a modest increase in industry concentration.”
Over the next five years, industry operators will continue to benefit from economies of scale due to the recent rush of mergers and acquisitions among major players. For example, one of the larger deals during the past five years occurred when major player Rexam PLC purchased the plastic division of Owens-Illinois in 2007. These moves demonstrate a trend toward acquisitions as a means to become more competitive within the industry. As the economy continues its recovery, increased demand from customers will be the main driver of revenue growth in the next five years. Although the price of plastic will continue to rise over the next five years, operators will likely pass that cost down to customers, preserving profit margins. For more information, visit IBISWorld's Plastic Bottle Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures a range of bottles from different plastic compounds based on their end use. These bottles are then sold to beverage, food and chemical manufacturers for packaging soft drinks, milk, condiments and household and automotive chemicals. This industry does not manufacture reusable plastic bottles.
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About IBISWorld Inc.
Recognized as the nation's most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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