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November 13, 1995 01:00 AM

PET GROWTH CALLED `VIRTUALLY UNSTOPPABLE'

Roger King
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    JAMESBURG, N.J.-World demand for virgin PET resin will more than double from 5 billion pounds in 1994 to 10 billion pounds by 2000, putting PET in the major leagues of polymers, an international PET expert said. In fact, soft drink bottle production in 2000 will equal the entire 1993 PET market, said G. Keith Mitchell, director of PCI (PET Packaging, Resin, Recycling) Ltd., of Derby, England.

    Mitchell, who spoke at the PET Update '95 conference, held Nov. 1 in Jamesburg and sponsored by Packaging Group Inc. of Milltown, N.J., noted that the growth of PET has increased an average of 19 percent worldwide in recent years and is ``virtually unstoppable.''

    However, ``PET's growth has been meteoric, but this needs to be tempered by the realization that it is still a relatively small-volume polymer, representing only 16 percent of total world polyester production. The market is still being dominated by the fiber sector.''

    He predicted that PET packaging resin use in overall polyester production will grow to 20 percent in 2000.

    Staple fiber will stay at 36 percent of that total production; filament yarn will drop from 35 percent to 34 percent; PET film will drop from 7 percent to 5 percent; and engineering polymers and other uses will drop from 6 percent to 5 percent of the total, Mitchell said.

    At the same time, PET plants worldwide will be operating at only 65 percent capacity, if current conditions continue, and world markets will see a surplus of as much as 4 billion pounds of production capacity per year between 1997 and 2000, he said.

    ``It takes two years to build a PET plant. The surplus in 1998 is unavoidable because bulldozers are moving now,'' he said. ``You've seen North American producers building outside their local markets. Northern Asia producers will be doing the same.''

    Thus, total world production capacity of virgin PET will equal 15 billion pounds per year, he said.

    Factors driving growth are:

    Greater use of small and con-toured soft drink bottles.

    Increased use of hot-fill bottles, particularly in the Far East.

    Rapid expansion of developing markets, based on glass replacement, in Latin America and Eastern Europe.

    Replacement of PVC in mineral water packaging in Europe.

    Continued substitution of other materials such as high density polyethylene, polypropylene, tinplate and polyester due to PET's superior physical characteristics of clarity and impact strength.

    High levels of organic growth in PET-packaged products such as mineral water.

    Greater use of PET in the sheet thermoforming sector.

    PET's growth, apart from meeting the requirements of the markets it serves, is due to its being ``a highly profitable product diversification for the polyester producers,'' Mitchell said.

    Concurrent with the doubling of the world PET market is the disappearance of restrictions that came from limited resin supply; the overall resin market will ease substantially before the turn of the century, he said.

    The PET market will grow, Mitchell said, in the Americas in part because of its replacement of glass and metal containers in South America; the replacement of preform imports by local PET resin processing; expansion of the use of hot-fill PET bottles within North American Free Trade Agreement countries; and increased consumption of PET-packaged mineral water for domestic and export consumption.

    In Europe, growth will come from a shift in Germany from a 21-ounce glass container for mineral water to a 1-liter PET bottle; Eastern European replacement of glass packaging and a general increase in the use of PET; and possibly greater PET use in alcoholic drink packaging.

    In the Asia-Pacific region, increases will come through geographic expansion into central and western China and northern Thailand; hot-fill technology spreading from Japan to China and Southeast Asia; and the use of small bottles in Japan.

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