As global markets and new technologies reshape the polyethylene business, it sometimes seems as if the only constant in our industry is change. That, and a track record of solid growth.
During the past decade, global demand for PE has consistently increased, on average, ahead of global gross domestic product. The current compounded global growth rate (1994-2000) for all of polyethylene is a healthy 6 percent. For linear low density PE, the global growth rate is even better, at 7.3 percent.
Historically, the basic functionality of PE has driven its strong global growth, especially in emerging markets. However, in more-developed economies, technology is enhancing the benefit package and is fueling demand.
PE also has become increasingly global. Once a buzzword, globalization is now a reality. How best to capitalize on this trend? Think globally but act locally.
As the world becomes a smaller place, it does not necessarily signal a shift to a single global market with similar needs and expectations from area to area. Rather, globalization provides us with the opportunity to more clearly understand, and deliver against, individual customer needs wherever they reside.
In emerging economies, economic growth is driving the demand for the latest packaging concepts in storage and transportation. Additionally, the availability of plastics for food preservation is spurring demand with more options for preserving a variety of food for a longer period.
Another factor responsible for driving change in the PE business today is technology. Until recently, much of the fanfare surrounding new technology for PE manufacturing has centered on specialty products. However, new manufacturing technologies now deliver benefits to processors, end-users and consumers in many applications.
As exciting as globalization and new manufacturing technologies are, however, their true worth is determined strictly by the improved functionality they deliver — in other words, can they help someone make money? More than ever before, companies have the potential to ``mass customize'' products to meet a variety of needs. This requires all of us to ask informed questions.
How are customer needs changing — not only in North America, but around the world? What product benefits offer value to them? Which are they willing to pay for? Determining the answers to these and other questions can help the industry squeeze the most value from new technology and continue the growing, global demand for PE.
Azzaro is North America commercial director, polyethylene, for Midland, Mich.-based Dow Chemical Co.