„Welcome to our new Plastic Compounds Industry Insight, giving you a brief market overview especially from an M&A perspective. In general, consolidation is actively pursued by multinational companies trying to grow production capacities and to acquire green technologies, which are to become paramount in the near future.“

Global Market
in USD bn

– The demand for plastic compounds is expected to increase sharply, while growing environmental concerns pose numerous challenges for producers
– While many studies attribute different values to the total market size, there is consensus on the growth trajectory of 5-7% annually
– The growth of the market is largely attributed to a rising adoption of plastic compounds in various industries, such as in manufacturing, healthcare and the automotive industry

As sustainability climbs the political agenda, it also forms a trend in plastics: lower carbon footprint, incorporation of CO2, utilization of sustainable feedstocks and natural polymers, life cycle analysis, utilization of waste streams

Recycling will become more of a topic in the future, driving demand for easy-to-recover and recyclable materials

Specialty materials for niche applications (e.g. epoxy adhesives vs epoxy composite matrices) promise better returns than commodity polymers

Polymers for biomedical materials are expected to see a substantial increase in demand. This includes tissue scaffolds, bioreactors, surgical materials, drug delivery materials, in-body polymers for joint replacements and prosthetics, polymeric drugs etc.

As 3D printing grows in importance, specialty polymers for 3D printing applications will see a significant rise in demand

– The international peer group consists of global compounders and producers of masterbatches
– Valuations range from 5x EBITDA to 10x EBITDA, with an average of 7x EBITDA
– Valuations have been stable over the last months, despite a smaller dip in mid-2018, when stock markets took a general hit. This highlights the industry’s overall stability and low risk profile