Accelerated substitution of degradable plastics, market capacity could exceed $50 billion by 2025. Demand-side: huge potential in courier, takeaway, retail, and agriculture sectors, with 2.7 million tonnes of biodegradable plastic demand.
Express Industry
With the rapid development of the courier industry driven by e-commerce economy, the consumption of domestic plastic packaging will increase significantly. Assuming that the plastic packaging consumed by the express delivery industry and the volume of express delivery business maintain the same proportional increase, the plastic packaging consumed by the express delivery industry in 2020 Express industry consumption of plastic packaging will reach about 1.4 million tons.
According to the forecast of the Foresight Industry Research Institute, the national express delivery volume will reach 98.9 billion pieces and 134.9 billion pieces in 2022 and 2025, and the plastic packaging consumed will reach 1.66 million tons and 2.27 million tons under the same measurement conditions. In 2022 and 2025, the replacement rate of degradable plastics in the national express delivery industry can reach 21% and 30%, corresponding to the replacement volume of degradable plastics of 350,000 tons and 680,000 tons; under the optimistic assumption, the replacement volume of biodegradable mailing bag can reach 470,000 tons and 910,000 tons in 2022 and 2025.
Catering Delivery Industry
The food and beverage delivery market continues to expand at a rapid pace, with plastic tableware consumption reaching 770,000 tons. Since the outbreak of the food and beverage delivery industry in China in 2012, people's demand for anytime, anywhere dining has led to an increase in food and beverage delivery penetration. By 2019, the penetration rate of Chinese residents in the food delivery industry will reach over 35%, and factors such as sinking market tapping + service diversification + people's rejection of gathering meals in the post-epidemic era will continue to provide ample room for growth for food delivery. Considering that the order growth rate has gradually fallen to 40% in recent years, the order volume will grow at 12% CAGR to 36.9 billion units in 2025 according to conservative estimates.
The replacement volume of biodegradable plastics is expected to reach 470,000 tons. The total amount of degradable plastic substitution will be 15% and 30% in 2022 and 2025, releasing the demand for degradable plastic of 180,000 tons and 470,000 tons.
Plastic Shopping Bags
Plastic shopping bags are one of the plastic products that will be the focus of this new plastic ban. They are used frequently, are less durable and are more difficult to sort and recycle, and are one of the main sources of plastic waste. The ban will be in 2020, 2022, and 2025 step by step to achieve invisible degradation in all major retail establishments at the prefecture level and in the process of catering packaging takeaway services, and encourage the combination of urban and rural areas, towns, and rural areas in the marketplace and other places to stop using non-degradable plastic.
In the process of biodegradable plastic bag replacement, the rise of public green awareness and policy ban is bound to be synchronized, meaning that plastic reduction, durable shopping bag replacement, paper bags, biodegradable plastic, and other bag replacement will coexist. In the estimation result, the biodegradable plastic shopping bags will reach 650,000 tons and 1.06 million tons in 2022 and 2025.
Agricultural Film Industry
According to the National Bureau of Statistics, China's agricultural plastic film usage is maintained at 2.4-2.6 million tons/year, and the output of mulch film in FY18 was about 1.404 million tons.
Biodegradable films are less price-sensitive to agricultural products, and market penetration is expected to reach 30% by 2025. Since the price of biodegradable plastic is about 2-3 times higher than traditional plastic, the cost of biodegradable mulch is even higher, which limits the promotion of biodegradable mulch. The corresponding demand for the biodegradable agricultural land film will be about 49 million tons.
Supply-side: China has the largest production capacity in the world
Global production capacity is less than 1 million tons/year, with future growth mainly concentrated in China. By 2020, the global production capacity of degradable plastic bags is characterized by scattered varieties, small capacity scale, and low concentration. As China's new plastic restriction policy is implemented more vigorously, the total scale of existing capacity under construction reaches 1.287 million tons, which is larger than the total global capacity, and there are still 2.84 million tons of proposed capacity in the planning stage, which can be built and launched sooner when the market demand becomes clearer.
At present, China's existing capacity and capacity under construction total about 1.767 million tons, while we have calculated that the demand for biodegradable plastics released by the implementation of China's new plastic restriction policy is expected to reach 2.7 million tons, and if the demand meets the expectation, the supply side gap is still above 53%.
Anhui Sealong Biobased Industrial Technology Co., Ltd. focuses on the research and development, production, sales and technical services of bio-based polymer materials upholds the concept of protecting the environment and creating green value, relying on the parent company PBSX raw materials, The park is divided into modified raw materials area, film and bag products area, injection molding products area, blister products area, extrusion products area, storage, and logistics area and product R&D and testing center, forming an industrial cluster to achieve industrial scale, specialization, and standardization. The annual production capacity is 20W tons.
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