Plastics industry faces 'roadblocks' in Australia

By Kate Tilley
Correspondent

Published: June 14, 2013 3:39 pm ET
Updated: June 14, 2013 3:42 pm ET

Related to this story

Topics Public Policy, Oceania

MELBOURNE, AUSTRALIA — Australia’s “inconsistent, complex and costly” regulations, unattractive capital investment location and rising gas costs are stunting the plastics and chemical industries’ growth, a trade group says.

The Plastics and Chemicals Industries Association (PACIA) in Melbourne, the industries’ peak representative body, released a strategic industry roadmap at its national conference in June.

The 16-page document outlines key issues. It is based on two reports by Australia’s national science agency, the Melbourne-based Commonwealth Scientific and Industrial Research Organisation. The reports were co-funded by PACIA and the federal Department of Industry, Innovation, Science, Research and Tertiary Education.

Ross Pilling, PACIA board member and managing director of Melbourne-based chemical company BASF Australia Ltd., said the plastics and chemicals sector can either “continue down the business-as-usual road and inevitably face industry contraction” or choose “a road to sustainable growth.”

“Australia must be more than a commodities exporter and value-added products importer,” Pilling said.

The roadmap report said the plastics and chemicals sector has reached a “critical tipping point” and calls for urgent action. Australia has many traditional competitive advantages as an investment destination, including abundant natural resources for feedstock and energy; a skilled, capable workforce; good health, safety and environmental performance; and stable financial and political systems.

But those advantages are increasingly offset by three main “roadblocks” — costly and complex regulations; a lack of capital investment; and uncompetitive natural resource prices, including gas.

The report said Australia’s regulatory environment has endemic complexity, hampers new product introduction, adds costs and makes the nation uncompetitive with major trading partners.

Despite multiple regulatory reviews since 1996, “little meaningful reform progress” has been made. In February 2006, Australia’s peak intergovernmental forum, the Council of Australian Governments, identified chemicals and plastics as a “hot spot” for regulatory reform and, in October 2008, agreed to implement regulatory and competition reforms. “In May 2013, many regulatory reforms have not been achieved,” the roadmap report said.

It said plastics and chemicals companies must significantly invest in plants and equipment to compete with more modern, larger plants, especially in Asia and the Middle East.

The roadmap said Australia’s abundant energy, mineral and water resources, which are essential feedstocks for the plastics and chemicals sector, should be a major competitive advantage. But the gas market’s “broken” regulatory regime “poses a serious risk” to industry viability.

“This invaluable industry is at the crossroads. The time for reviews has passed; now it is time for action,” the report said.

The plastics and chemicals industries must work with governments to remove roadblocks, innovate and take advantage of new markets and opportunities, it said.

Australia’s plastics and chemicals sector has an annual turn¬over of about A$40 billion (US$38.1 billion) and contributes A$11.6 billion to the country’s gross domestic product. It is Australia’s second-largest manufacturing sector, directly employs more than 60,000 people and supplies 109 of Australia’s 111 industries.

 


Comments

Plastics industry faces 'roadblocks' in Australia

By Kate Tilley
Correspondent

Published: June 14, 2013 3:39 pm ET
Updated: June 14, 2013 3:42 pm ET

Post Your Comments


Back to story


More stories

Image

FPI joins curbside recycling group

January 28, 2015 11:47 am ET

Foodservice Packaging Institute is joining the board of the Curbside Value Partnership, a non-profit group that works to improve curbside recycling...    More

Image

Agricultural container recycling grows

January 28, 2015 11:42 am ET

Plastic pestitcide container recycling shot up by nearly 40 percent last year, according to new statistics from the Virginia Department of...    More

Image

China's plastics industry making a shift

January 27, 2015 3:41 pm ET

China's plastic industry is in the midst of a “profound adjustment” from large-scale and high-speed growth to growth focused on quality,...    More

Image

UK legislators reject fracking moratorium

January 26, 2015 12:19 pm ET

UPDATED: Environmental campaigners turned their anger on the United Kingdom's Labour party Monday after a vote to impose a moratorium on fracking...    More

Image

Auto industry on the hunt for new lightweight materials

January 26, 2015 4:03 pm ET

The auto industry is focusing on lightweighting, and this is igniting a race to find new materials that can meet ever-changing performance needs of th...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events