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October 16, 2006 02:00 AM

Stretch, shrink films gaining in global market

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    The global market for stretch and shrink films is on the upswing, pushed along by factors like the growth of warehouse stores.

    Global demand for unitization films is currently about 7.6 billion pounds annually, with about 74 percent used in stretch film; 23 percent in shrink film, and 3 percent in stretch hoods.

    By 2010, the total will grow to 10.2 billion pounds, according to presenters at Applied Market Information LLC's recent conference in Atlanta, Stretch & Shrink Film 2006. The fastest-growing sector will be stretch hood film, which will grow 20 percent per year. Stretch films will grow 5-10 percent annually, depending on film type, and shrink films will stay flat.

    The market will be influenced by decisions like Wal-Mart Stores Inc.'s five-year plan to reduce packaging, with a goal of saving 733,700 tons of carbon dioxide, 323,800 tons of coal and 66.7 million gallons of diesel fuel.

    That means a lot more stretch hoods for bulk packaging, and a lot less cardboard.

    ``Packaging is where consumers and suppliers come together and can have a real impact, both on business efficiency and environmental stewardship,'' Wal-Mart Chief Executive Officer H. Lee Scott said when the company announced the initiative Sept. 22.

    ``Even small changes to packaging can have a ripple effect. Improved packaging means less waste, fewer materials used and savings on transportation, manufacturing, shipping and storage.''

    AMI research director Andrew Reynolds said demand for PE films will see restrained growth in Western countries, but faster expansion in Asia, especially in China. Key growth markets are stretch film and distribution packaging, food packaging, protective packaging and labels.

    ``A lot of the reasons for the growth are the historical drivers [of] economic growth, lifestyle trends, the need for more sophisticated packaging,'' Reynolds said in a Sept. 26 presentation.

    He cited ``the increasing sophistication of the supply chain'' for growth in unitization films.

    ``And one of the reasons why polyethylene is growing so fast in Asia is the strong evolution and the kind of retailing structures we're very used to seeing in North America. Large stores like Wal-Mart [are] growing quite a presence in China and therefore driving and introducing the same kind of packaging models, the same kind of protective models ... that they're used to using here in the United States.''

    Reynolds said the stretch hood offers significant cost savings over shrink hoods and is encroaching on pallet stretch film.

    ``As it's developed, it's become more economical, particularly as the number of suppliers in that segment increases,'' he added.

    Metallocene resins are playing a role. In 2005, the total global market for metallocene PE resins was 3.7 billion pounds. That figure is expected to grow to 10.1 billion pounds by 2010.

    Reynolds sees growth in building and construction products, palletized bagged goods, appliances and the beverage market.

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