Plastic Caps And Closures Market

Declining global demand for glass bottles and containers, owing to its high cost and fragile properties is the key factor projected to favor the growth of plastic-made products including plastic caps and closures. Manufacturers in the plastic caps and closures market are increasingly preferring PET bottles over glass packaging to further ensure ease of handling and safe transportation. As per a recent market intelligence outlook by Future Market Insights, the global plastic caps and closures market is slated to reach a valuation of nearly US$ 54.7 Billion by 2027, expanding at a moderate CAGR of 4.8 percent.

In A Highly Fragmented Global Plastic Caps and Closures Market, Regional Players Outplay Global Companies

With the shifting competitive landscape in global plastic caps and closures market, owing to low running costs, well-established networks, and the ability to understand local trends and demands, the local and regional players in the global plastic caps and closures market have come the forefront—currently holding nearly 82 percent of the total market share in the global plastic caps and closures market. As per FMI’s study on global plastic caps and closures market, key factors contributing to the dominant position of regional players include low costs pertaining to production, transportation, and logistics.

Stringency in Standards Influencing Demand for Plastic Caps and Closures

In a bid to reduce the impact of color and additives in plastic caps and closures, with high demand for dimensional accuracy and process safety, packaging regulations are projected to influence the demand for quality and seamless products, specifically in food, cosmetics and pharmaceutical industries. Critical parameters such as homogenous dyeing and exact coloring, high dimensional stability, and careful selection of raw materials have been covered under various regulation, globally. Although stringent regulations result in quality products, it is projected to be a key factor creating an upward pricing pressure, thereby, restraining the growth of plastic caps and closures market. The EU has enacted the Regulation on Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) to protect consumers and environment from the harmful impact of chemicals. The EU has also outlined guidelines in Food Contact Material Regulations that covers the safety of all materials that come in contact with food. Similarly, The Federal Food, Drug and Cosmetic Act includes food contact substances (FCS), or any substance intended to be used as a material for manufacturing, processing, packing, packaging, transporting or holding food.

Global Plastic Caps and Closures Market Driven by Material Innovations

Companies in the plastic caps and closures market are increasingly adopting innovative packaging solutions, using an extensive range of polyethylenes and polypropylenes. Plastic caps and closures manufacturers are using innovative materials such as High-density polyethylene (HDPE) to ensure lightweighting in caps and closures for carbonated soft drinks (CSDs). To cater to the growing demand for lightweight plastic caps and closures closures, SABIC recently developed a new grade of HDPE with organoleptics, exhibiting strong shear thinning. Moreover, increasing demand for food products with longer shelf life, has resulted in packaging practices aimed at reducing food waste in the chain—specifically in the ready-to-eat food sector. Nanomaterials with improved barrier properties are projected to remain the most preferred alternative to layered plastics to increase shelf life and improved food quality.

Demand for One Piece Caps, Liner-Less Caps Gaining Traction

Given the growing demand for lightweight plastic caps and closures for improved size control, shorter cycle time, lower operating torque, and less effect of colorants on shrinkage, cost effective one-piece closures are high in demand. As per estimations, one-piece plastic caps and closures are projected to remain highly efficient with maximum material saving avenues, thereby reducing the conversion costs because of the elimination of the lining process in manufacturing plastic caps and closures.

Competitive Landscape Analysis: Plastic Caps and Closures Market

Mergers and Acquisitions to Remain the Key Market Strategy favoring Value Creation in Global Plastic Caps and Closures Market

Global players in the plastic caps and closures market are solidifying their market position through strategic collaborations such as mergers and acquisitions to expand their product portfolio and geographic footprint. For instance, in November 2017, Pact Group Holdings Ltd. acquired the Asian packaging operations (excluding Japan) of the Closure Systems International, Inc. for US$ 110.55 Mn. Global Closure Systems was acquired by RPC Group Plc (a plastic products design and engineering company) from PAI Partners (private equity firm) for US$ 714.6 Mn. It was formed in 2005, as a spinoff of Crown Holdings Inc.’s beverages and specialty closure business. Another key player in the plastic caps and closures market Berry Plastics Group, Inc. entered into a marketing alliance with Klöckner Pentaplast Group, a provider of packaging, printing, and specialty solutions. Most recently, Amcor announced its plan to acquire Bemis in an all-stock combination, translating into a stronger value proposition for its global, regional and local customers in the global plastic caps and closures market.

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