Plastics is one of Greek industry’s most dynamic and fastest-growing sectors, whose firms have invested heavily, mainly abroad. In the last 10 years, domestic consumption of plastic packaging materials has grown by an annual average of 5.2 percent. Greek plastics firms are strongly export-oriented, and their consolidated financial statements show that the biggest portion of their revenue comes either from exports or from subsidiaries abroad. The sector is closely intertwined with other industries, such as packaging and household goods, and is sensitive to fluctuations in the prices of raw materials. Over the years, it has made serious inroads into the markets for other competing materials, such as paper, wood and metals. Industry officials say domestic consumption still has growth potential, the tapping of which will largely depend on the sector retaining its competitiveness vis-a-vis its substitutes. This prediction is mainly based on a projection of production of plastic packaging rising by an annual 2-3 percent in the next two years. However, the demand for certain kinds of packaging seems to be tapering off in recent years after robust growth in the early 1990s. Despite the positive outlook, profitability directly depends on the price of raw materials, which exhibit considerable instability, largely influenced by the price of oil. The effect on the industry of the implementation of an EU directive setting a target of 50 percent recycling of packaging waste by 2005 is difficult to estimate; the present rate is still quite low due to high energy costs. Technological advances have allowed significant improvements in both quality and quantity of the final products. A most important development for the sector has been the launching in 2001 of Hellenic Petroleum’s polypropylene plant in Komotini, with a capacity expected to more than cover domestic demand for BOPP film. Nevertheless, polyethylene, the most widespread raw material for plastic packaging, is still not produced in Greece, and producers have to import it from abroad. The share prices of three listed companies, Thrace Plastics, Crete Plastics and Petzetakis, are now considered comparably attractive to those of foreign competitors. By contrast, Daios and Eurodrip, are considered quite expensive. Outward-looking On the basis of nine-month results for 2002, most Greek-listed plastics firms are expected to show a healthy rise in sales and profits for the entire year. Exports are mainly directed to Western Europe, the Middle East and the Balkans. The sector is currently undergoing a process of restructuring, with firms aiming to become larger and more flexible entities, and turning their interest to mergers or strategic partnerships with foreign firms. The Petzetakis group consists of three divisions: Petzetakis Greece, Petzetakis Eurohose and Petzetakis Africa. Thrace Plastics divides its activities into four branches and operates in five countries with five subsidiaries. It plans to continue with acquisitions abroad. Crete Plastics is modernizing its subsidiaries and keeping an eye out for possible acquisitions, while investment in the Greek parent company and in the Turkish and Polish subsidiaries is mainly in mechanical equipment. Meanwhile the firm is preparing to launch a new plant in Shanghai, China. Eurodrip is focusing its hopes for growth in the US, targeting an expansion of its distribution network and considering the creation of a second subsidiary. It is also implementing an investment in Egypt, while vying to expand in the Middle East through its Amman-based National Drip Irrigation Co.