Dow to leverage global abilities, local knowledge to help packaging firms

By Nina Ying Sun
Assistant Managing Editor

Published: May 14, 2014 3:12 pm ET
Updated: May 14, 2014 4:15 pm ET

Image By: Dow Chemical Co. Dow executives speak to the media about Pack Studios Shanghai. From left: Paul Wu, value chain marketing director; Diego Donosa, Mark Saurin and Lawrence Cheung.

Related to this story

Topics Packaging, Materials, Film & Sheet, Materials Suppliers, CHINAPLAS
Companies & Associations Dow Chemical Co.

SHANGHAI — Consumers in the U.S. find PET bottled beverages on shelves or in refrigerators in grocery stores, but in China many bottled beverages are kept in store “warmers.”

The reason is Chinese consumers prefer to have their non-carbonated beverages, such as ready-to-drink tea, served warm, especially during colder seasons. Region-specific consumer preferences like this affect all food packaging, including multilayer films.

That’s the type of challenge Dow Chemical Co. aims to tackle together with brand owners, converters, retailers, and other key players in the value chain, at its new Pack Studios facility in Shanghai, officially launched on April 23, the first day of Chinaplas.

Located in the Shanghai Dow Center, Pack Studios Shanghai will help Asia Pacific customers bring new packaging applications to market faster.

Four executives from Dow Packaging & Specialty Plastics, the largest business unit in Dow, hosted a media tour of the facility’s material science and analytical science labs. They included Midland, Mich.-based Business President Diego Donoso and Singapore-based Asia Pacific Commercial Vice President Mark Saurin.

Donoso said Dow has a very strong position in Asia, with its Sadara joint venture with Saudi Aramco of Riyadh, Saudi Arabia, ready to come on stream in the middle of 2015 with four production units. About 60 percent of Sadara’s output will supply the Asia Pacific market, Saurin added.

Combining Sadara with Dow’s investment in shale gas in the U.S. Gulf Coast, Donoso said Dow is poised to deliver global growth in the packaging industry for the next decade.

Beyond growth, Dow is focused on innovation and sustainability, he said. Having worked and lived in Latin America, Europe, Asia, and North America over his 20-plus-year tenure at Dow, Donoso said Asia and Latin America are currently driving a lot of innovation.

In addition to Shanghai, Dow runs Pack Studios in Freeport, Texas; Horgen, Switzerland; and São Paulo, Brazil. Each center features a collaboration room, laboratory facilities as well as fabrication and testing equipment.

Saurin said 40 percent of the world’s flexible packaging is done in Asia with a 5 percent annual growth rate. Asia’s growing middle class now has higher expectations in terms of food safety, convenience and aesthetics.

Dow’s integrated feedstock positions, in-market capability and expertise, and technical innovation will help the company move faster here, he said.

Particularly in Greater China, Dow’s packaging business has seen growth at 1.5 times to twice the GDP growth rate, according to Lawrence Cheung, commercial director Greater China.

“There could have been more growth,” he said, as the company has been relying solely on its plant in Thailand as well as some imports from Europe and North America to supply the Asia market.

Sadara will expand and strengthen Dow’s product offering to Asia to include butane grades of linear low density polyethylene, high density PE, and more LDPE, Cheung said. Dow already offers higher alpha-olefin LLDPE grades. Saurin believes the breadth of Dow’s product offering make the company unique in the packaging industry Asia.

“When a customer wants to make one-layer film, five-layer film, 11-layer film, Dow has products that can be used in every layer of the film structure,” he said, “That resin capability, married with strong adhesives in both water-based, solvent-based, and solvent-less formulations, to laminate polyethylene structures together, allow us to create and drive innovation for the whole film structure.”

Dow also possesses the ability to be both global and local, he said. “That’s important because we are able to recognize trends quickly, develop products quickly all over the world, and use that experience to leverage to other geographies very quickly.”

Pack Studios Shanghai combines the capabilities of application development labs in Singapore and Shanghai specializing in film extrusion and packaging converting, respectively. It also offers access to a global network of industry experts and works across both flexible and rigid packaging, from protective barrier films, sealants, and adhesives to rigid plastics like caps and closures.

Based in Hong Kong, Cheung said lifestyle changes in China are creating tremendous demand for food packaging films.

“It’s growing several-fold.” In addition, China's Third Plenum underscored the importance of food safety, he said, and packaging films can help achieve that.

Specifically, Cheung sees two trends in packaging — thinner and smaller. Decreasing thickness requires higher performance enabled by multilayers. He also noted the market popularity of water-based adhesive for lamination films.

“We see a lot of our customers investing in multilayer films.” He said Dow is working with machinery suppliers to bring down equipment costs. The price would be half or two-thirds of a European or American machine, he said.

Due to the nature of food packaging products and related government policies, Chinese local brand owners dominate the industry, Cheung said. They currently represent about 70 percent of Dow Packaging’s local business and also bring faster growth than international brands.

But he was quick to add Dow does not limit itself to local brands. Global brands need to go beyond the costal, big cities and open up the market in China’s second-tier, third-tier cities.

“The game will continue,” he said.


Comments

Dow to leverage global abilities, local knowledge to help packaging firms

By Nina Ying Sun
Assistant Managing Editor

Published: May 14, 2014 3:12 pm ET
Updated: May 14, 2014 4:15 pm ET

Post Your Comments


Back to story


More stories

Image

Acquisition expands Rieke Packaging's stake in Asia

July 28, 2014 4:39 pm ET

Diversified rigid packaging components producer Rieke Packaging Systems now has a bigger footprint in Asia.    More

Image

Deal combines US packaging thermoformers

July 28, 2014 12:42 pm ET

Thermoformed medical packager Nelipak Corp. is expanding its North American holdings and access to the U.S. health care market with the purchase of...    More

Image

Formosa to be compensated for Vietnam riot

July 28, 2014 1:44 pm ET

Taiwan's Formosa Plastics Group will receive $2.39 million from the Vietnamese government and insurance companies for damages suffered during the...    More

Image

Ukraine's Group DF may be forced to sell Crimea-based additives plant

July 28, 2014 10:12 am ET

Group DF, the industrial business of Ukrainian tycoon Dmitry Firtash, may be forced to sell off Eastern Europe's biggest producer of titanium oxide,...    More

Image

Sealed Air's move to Charlotte will put it all under 'One Roof'

July 25, 2014 2:03 pm ET

Sealed Air Corp. shook the ground last week by announcing plans to relocate its headquarters from Elmwood Park, N.J., to Charlotte, N.C., in a move th...    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

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

More Events