“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.”
Plastic compounding is a method for transforming the characteristics of engineered thermoplastics using a blend of plastics and additives.
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
International Peer Group
– 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
Key Performance Indicators
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