ECONOMY

It’s a wrap for plastic packaging market

Plastic packaging is becoming increasingly attractive in Greece, with the domestic market growing steadily over the past decade, showing an annual growth rate of 4.3 percent during the 1995-2004 period. This growth is covered mainly by locally made products, a recent sector survey by ICAP has shown. The safe transportation, low weight and preservation of products have rendered plastic packaging particularly competitive against traditional materials such as glass, wood, paper or aluminium. However, fluctuations in the international price of oil always have a direct and unpredictable effect on the production costs of plastic products. The sharp rise of oil prices in the last three years has led to a similar increase in the prices of oil products, raising production costs considerably and limiting profit margins. As a result, the sector’s companies were forced to roll price increases over to their customers. The rise in oil prices also raises shipping costs, an important factor for the sector as many plastic products are bulky. Over the years the best-selling plastic packaging products have been bags of all kinds, covering 29 percent of the market in 2004. A close second is plastic sheets and films at 26 percent, with bottles taking 20 percent. The degree of concentration is quite high in most categories of the sector, as a few companies control a significant share of the market. Nevertheless the field is more open in the bags sub-sector, where there are many small players who aim mainly at covering local market needs. As for the sector’s future prospects according to the current conditions and trends, total domestic consumption of plastic packaging products is expected to maintain a growth rate of 4 to 5 percent in quantity in the years 2005 and 2006. Plastic vs the environment Having replaced traditional packaging materials, plastic is used in a multitude of applications and has obtained a significant position in the broader packaging industry. On the other hand, it is far from being environment-friendly. Plastic packaging refuse recycling has been a major concern for companies in the sector. Internationally, efforts are being made for the optimum utilization of plastic refuse and their systematic recycling. Greece is among the countries with the lowest percentages of plastic recycling, being the sole Western European country scoring under 5 percent. At least, Greek production companies have begun to toe the line of the legal framework concerning the utilization of plastic refuse. The consistent application of legal regulations in this area is expected to contribute in saving energy, reducing costs and ultimately helping to protect the environment.