Plastic manufacturers 2020: challenges and solutions in the post-pandemic world

As you know, the world has faced during this year one of the biggest health threats in the last hundred years with the COVID-19 pandemic. This situation forced millions of diverse businesses all over the world to shut down or reduce their activities due to mandatory and recommended quarantines.

But what’s going on and what comes after for the industry and, especially for plastic manufacturers? It is known that the manufacturing industry hasn’t stopped totally its activities, as many of them are essential to daily human life.

Plastic products have received an increased demand. Especially for the health sector, as masks, gloves, hand sanitizer bottles, protective medical suits, and test kits are composed mainly of plastic [1].

But out of that sector, demand for other plastic products has increased too, like delivery packaging and houseware items, key products for the locked-down way of life, full with hygienic measures. Life with children inside houses has also sparked a high demand for toy manufacturers [1].

This post addresses the present and immediate future of the plastic industry as many countries around the world have started to gradually reopen their economic activities while the pandemic goes on.

Forecasts for the plastic industry

In 2018, it was shown by the consultancy firm Material Economics that global plastic demand is estimated to increase along the decades in some regions like the Middle East, Africa, Latin America if they continue to develop. For other regions like Europe, Australia, China, and North America it is expected that the demand keeps constant [2].

This forecast, of course, didn’t take into account the COVID-19 pandemic, but as we’ve seen this industry has been active, so the high demand trend suggests that plastic will remain as one of the most powerful industries in the world.

There are, for now, some specific forecasts, for example, plastic pallets are expected to grow by 107 million units between this year and 2024, according to Technavio [3]. As for the molded plastic packaging market, it is expected to reach more than 21 thousand tons of production in 2021 in the Americas [4].

Challenges for plastic manufacturers

Like any other industry, plastic production has always faced different challenges, but the coronavirus crisis has drawn attention to some specific issues. Here are some of these struggles:

Pollution within the plastic industry

In recent years, the UN showed that approximately 13 million tons of plastic are dumped in the oceans annually and that half of the plastic produced all around the world is for single-use [5]. A quarter of marine litter comes from plastic waste, which affects many bodies of water including lakes and rivers [2].

Less than 20% of plastic waste is recycled, this is one of the most difficult and important challenges for the plastic industry [2].

The production, use, and disposal of plastic also cause important greenhouse gas emissions throughout the different stages of all the industry process. If nothing changes, it is expected to represent 10 to 13 percent of the remaining carbon by 2050 [2].

Amidst the COVID-19 crisis, the previous figures have set an alarm because of the halt of some plastic regulatory laws around the globe. The UK, the EU, India, Singapur, Thailand, and some places in the US like California, New Jersey, and New York as well as other large cities such as Mexico City had recently passed laws prohibiting single-use plastics, but most of them are in standby due to the pandemic [1].

Facemasks are also now contributing to marine litter due to inadequate disposal and reusable items are disputed amidst fear of coronavirus contagion, Starbucks, for instance, has already banned reusable mugs [1][5].

As much of this sounds really discouraging, we’ll see later on the possible solutions, as well as the enormous efforts to fight this huge issue, possibly the greatest concerning the plastic industry.

Health matters and plastic manufacturers

Social distancing is an important topic for all industries as factories, plants, and offices restart gradually their activities. This doesn’t let the full personnel retake their posts, following local dispositions, like offices operating physically at half or less of their capacity or without people at higher risk due to age or diseases [6].

Several plastic companies have implemented a number of solutions to adapt to the economic reopening amidst the pandemic. For example, in Mexico, the Austrian Engel which fabricates plastic injection molding machines has strengthened their customer service with digital tools, as well as having their employees follow health guidelines [7].

Other transnational plastic-related companies such as Arbug, Wittmann, Battenfield, Hasco, StackTeck, Innovateck, Plastec USA, and Conair have adapted successfully with social distancing in their workplaces by separating workers in the available areas, as well as with online and remote tools in order to follow the Mexican official dispositions, like measuring body temperature [7].

In Martin’s, we keep working to satisfy our clients’ necessities and remain a good option for our staff, providing the latter with a safe and sanitized workspace and following the official health dispositions, this way we can guarantee an excellent service for you. If you are planning to develop a plastic product in high volume, let us know, we’ll be of great assistance to get your project done.

Innovation in the plastic industry

The COVID-19 pandemic has also risen the interest for antibacterial packaging and aseptic materials that protect against the risk of viral contagion, this poses a great challenge for engineers.

But not only engineers have a difficult task, but designers have also faced and will face better ways of positioning packaging as a communication channel: it is certainly not the same a package for physical sales than for online sales [8], this is where plastic product design comes to the rescue.

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Plastic industry operations and its place in the economy

Affectations in the chain supply for many industries have been other of the problems when facing the coronavirus crisis as many travel bans affected ways of distribution across the globe, but as the economies reopen, the overview is promising [8].

According to a recent TMF Group survey within plastic companies, 25% of the interviewees expressed their desire to expand locally or globally [9].

With plastic manufacturers and plastic-related companies recovering and the increasing demand for plastic products, we can be optimistic about justified concerns related to employment.

The economic impact has been dramatic all over the world. For example, in the US 11.1% of the economically active population is unemployed as of June 2020 [10], a stark contrast with last year’s percentage (3.7% in the same month).

Mexico has been also hit: around 1.03 million formal employees have lost their job during March, April, and May 2020, according to official figures [11].

The plastic industry, as powerful as it is, probably will be one of the sectors involved in the employment recovery, as plastic continues to be one of the most demanded materials around the world.

Know more about how the plastic manufacturing sector
has coped since the beginning of the COVID-19 crisis?

Plastic manufacturers in North America

Before showing you some of the solutions that the plastic industry has found for the previously mentioned challenges, it is important to keep in mind how a great market for plastics North America is.

TMF Group reported that ⅔ of surveyed US business leaders are optimistic about an economical recovery happening within one year [9].

About half of the top 10 largest plastic manufacturers in the world, according to Plastics Technology [12], began in the United States or have their roots there, these include Dow Chemical, Exxon Mobil, and Lyondellbasell. However, the ten have offices across Canada, the United States, Mexico, and other Latin American countries.

In North America, the United States is clearly the country with the largest plastic production and holds the most powerful companies in the region. As for 2018, the top 5 plastic producing companies were Exxon Mobil, Chevon Corp, DowDuPont Inc, Eastman Chemical Company, and Berry Global Group Inc.

The 5 biggest plastic manufacturers in the US held jointly an approximate 450 billion USD revenue in 2018, half of that figure comes alone from Exxon Mobil [13].

Let’s not forget, however, that being one of its primary commercial associates, Mexico stands out as an important player in the US economy. An important number of US products are manufactured overseas and Mexico has been one of the main destinations.

In Martin’s, we’re always looking for new clients across Mexico and abroad, don’t hesitate to contact us if you have in mind a plastic-related project where we can assist you.

Solutions and recommendations for plastic manufacturers in the post-pandemic

As the challenges have been reshaped by the COVID-19 crisis, there have been different reactions to confront them. We present to you some of them, with the purpose of offering some recommendations you might wanna have in mind.

Plastic industry against pollution

One of the concepts that had been already working before the COVID-19 was the circular economy, which follows a simple rule: get the most of everything produced by strengthening the chain design, reuse, repair, recycle.

Each of the previous stages offers opportunity areas, with collaboration across the value chain, impactful solutions are most likely to emerge. By embracing and popularizing the circular economy for plastics it will be possible for plastic waste to be reduced [2] [14].

Another way to reduce the pollution caused by plastic manufacturers is found in the development of bioresins and eco-friendly plastic additives which mean safer disposal, energy-efficient manufacturing, and the decrease of toxic emissions.

Another green practice includes conventional thermoplastics to become biodegradable [15]. All these would ease the rise of worries about high plastic demand in the post-COVID-19 world.

In Martin’s, we’re just not aware of this problem, but we’ve looked up for solutions. That’s why we have adopted some biodegradable materials, for example, poliagave, a FDA approved biocomposite made of agave fibers that helps reducing considerably the carbon footprint and makes the products recyclable.

Plastic manufacturers and e-commerce

The lockdown in many parts of the world sparked a boom in Internet shopping. From the essentials (groceries, medicine, and home supplies) to leisure options (electronics, books, board games, etc.), online sales became a safer option and for some businesses, the only option as the COVID-19 forced millions of people to stay at home.

During the reopening of economies, this option will keep its attractiveness, and even when the pandemic finishes, it is expected to be a more accepted way of trading, especially with the older population which for years rejected this practice [8].

Just in Latin America, e-commerce grew up to 300% compared to the last year, according to a Kantar report [8].

Of course, in order to keep online trade working, companies have to invest in retail marketing research and adopt innovative strategies. With positive results, more plastic manufacturers have been adopting e-commerce.

Enhanced technology for the plastic industry

Technology as an ally for the plastic industry goes beyond e-commerce or the development of greener materials. Digital tools, software, automatized processes, and remote access to production plants are worthy resources to keep a company working, amidst a pandemic or other adversities that may come.

Tech tools can be helpful when the entire staff cannot be available physically. For example, augmented reality and virtual reality have been used by some companies to keep an eye on the facilities [8].

AI resources have helped workers to keep their job remotely. There is even software that enhances the operations by activating some automatized functions and watching over them from anywhere in the world, like the one Epicor LATAM offers [6].

Undoubtedly, the so-called Industry 4.0 has been and will be accelerated in the context of the COVID-19 crisis. This offers opportunities for further integration of robotic technologies and machine controls, and it brings advantages such as making production cycles faster, facilitating maintenance and simplifying programming, all of them being pivotal benefits for plastic manufacturers [15].

Financial security for plastic manufacturers

One of the biggest struggles for the economy all over the globe was the travel bans and restrictions imposed to contain the pandemic. As China was the first region hit by the coronavirus, some companies over the world might have met some difficulties in their supply and distribution.

Geographical proximity has then become a bigger advantage. And in the post-pandemic, for the North American region, this comes as an opportunity to strengthen the economic bonds. The brand new USMCA and the position of Mexico make this country an enticing space for US companies to invest in [9].

Do you want to know why manufacturing in Mexico has boosted during the last years? Make sure you learn more about it by clicking here.

Before the COVID-19, there was already an increase in commercial relationships within North America, in which more US companies were choosing Mexico as a manufacturing destination for their goods. This trend is expected to keep on in the post-pandemic [16].

In Martin’s, we are aware that these are challenging times, but we also know that we all must contribute to reach a global economic recovery, in which manufacturers, producers, distributors, and retailers team up to toughen the industry.

If you’re longing to develop a plastic-related project, give us a call or send an e-mail and we’ll be of help, maybe it will be the beginning of a successful commercial bond.

REFERENCES:

[1] Shashank Bengali. COVID-19 pandemic creates tidal wave of plastic waste. Los Angeles Times, 2020. Accessed 6 July 2020.

[2] Gemma James. The Plastics Landscape: The Challenges and Possible Solutions Principles for Responsible Investment, n. d. Accessed 6 July 2020.

[3] Business Wire. Research Report With COVID-19 Forecasts - Plastic Pallets Market 2020-2024 | Benefits Associated With the Use of Plastic Pallets to Boost Growth | Technavio. Business Wire, 2020. Accessed 6 July 2020.

[4] Business Wire. Molded Plastic Packaging Market in Americas - Top 3 Drivers by Technavio. Business Wire, 2017. Accessed 6 July 2020.

[5] Lillo Montalto Monella. Will plastic pollution get worse after the COVID-19 pandemic?. Euronews, 2020. Accessed 6 July 2020.

[6] Mauricio Pineda. Control de procesos y producción en tiempos de COVID-19 (in Spanish). Plastics Technology México, 2020. Accessed 6 July 2020.

[7] María Natalia Ortega Leyva. COVID-19: proveeduría para la industria plástica en México es una actividad esencial (in Spanish). Plastics Technology México, 2020. Accessed 6 July 2020.

[8] María Natalia Ortega Leyva. La industria del packaging en tiempos de COVID-19 (in Spanish). Plastics Technology México, 2020. Accessed 6 July 2020.

[9] Mauricio Pineda. México, opción para diversificar la cadena de suministro de compañías multinacionales (in Spanish). Plastics Technology México, 2020. Accessed 6 July 2020.

[10] U.S. Bureau of Labor Statistics. Unemployment Rate. U.S. Bureau of Labor Statistics. Accessed 6 July 2020.

[11] Expansión. México pierde 1 millón de empleos en tres meses por Covid-19 (in Spanish). Expansión, 2020. Accessed 6 July 2020.

[12] Plastics Technology. Top 10 Largest Plastic Producing Companies. Plastics Technology, n.d. Accessed 6 July 2020.

[13] Thomas. Top Plastics Manufacturers, Suppliers and Fabricators in the USA. Thomas, n.d. Accessed 6 July 2020.

[14] Kristin Hughes. Protector or polluter? The impact of COVID-19  on the movement to end plastic waste World Economic Forum, 2020. Accessed  6 July 2020.

[15] Ben Harrison. 6 Plastics Industry Trends Predicted to Impact Manufacturers in 2020 Kaysun, 2020. Accessed 6 July 2020.

[16] Carlos G. Mortera. Desafíos en el arranque de la industria poscuarentena (in Spanish). Plastics Technology México, 2020. Accessed 6 July 2020.