Increasing competition from the sizeable volume imports of low-cost products from Asian countries such as China is among the major challenges that are compelling domestic manufacturers in the European speciality films market to reassess their strategies to sustain profitability.

Recent analysis by Frost & Sullivan on the European speciality films market (including polyester, polyamide, polyimide, polycarbonate and fluoropolymer films) estimates annual revenues of the overall market at R 1.6 billion in 2003.
By 2010, revenues are expected to exceed R2.0 billion, growing at a compound annual growth rate of (CAGR) of 3.45 per cent.
Less-expensive alternatives are also threatening revenues in major applications such as packaging. Low-cost film types such as polyethylene and polypropylene limit the profitability of manufacturers and suppliers in packaging applications, which represents around 44 per cent of the total European speciality films revenue.
However, the excellent physical and chemical performance properties of speciality films, is supporting wider applications in end-user markets. For instance, consumer demand for improved product shelf life and product presentation is expected to encourage the adoption of speciality printable nylon films for food packaging.
Dr Brian Balmer, Industry Analyst from Frost & Sullivan explains: "Plastic films with unique characteristics continue to be the key to commercial success, driving manufacturers to increase their focus on R&D to try and cater more specifically to customer needs, for example, better performing and lighter polyimide films for use in flexible printed circuit boards."
While this increases the manufacturer's investment, technological developments are likely to further support market expansion. New applications are expected to combat the threat of declining end-use markets such as polyester films in magnetic media applications.
Heat-sealant polyester in lidding operations, oxygen-scavenging nylon film in food packaging and polycarbonate film as an alternative to paint in automotive roof modules are but some of the technological trends that are likely to influence growth of the European market.
Price is another strong competitive factor in the speciality films market with a dramatic range across types; in 2003, polyester film was available at R2 per kilogramme while polyimide films were selling at up to R200 for the same weight. The price of the film depends mainly on the intended end-use application.
"The higher development and processing costs of speciality films, compared to commodity films such as polyethylene or polypropylene, forces higher pricing that is likely to push end users towards low-cost film alternatives," notes Dr Balmer.
To counter the low appreciation of price-to-performance, speciality manufacturers need to constantly demonstrate the added value of using these films instead of commodity film or other alternatives.
Film technology/brand name promotions, free trial demonstrations and competitive pricing are some of the tactics manufacturers can use to raise end-user awareness.

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