China's Degradable Plastics Value Chain in 2021: PLA and PBAT Lead the Way, Market Concentration Still Lagging

China's degradable plastics market is still waiting for genuine concentration

Look at the value chain and three distinct stages emerge: design and key raw materials, degradable plastic products, and the applications that consume them. Technically, PLA and PBAT are widely regarded as the two main routes for future degradable materials. Today the flagship players along this chain are clustered in Shandong, Anhui, Guangdong and Jiangsu, yet their output volumes remain modest overall — a clear sign that market concentration has yet to take shape.

1. Mapping the whole degradable plastics chain: PLA and PBAT set the future direction

Upstream is where raw materials are produced. Split by origin, these materials fall into two families: bio-based plastics and petroleum-based plastics. Bio-based grades such as starch-based plastics, PLA and PHA are built on renewable natural biomass — starch from corn or potato, plant straw, chitin and similar feedstocks — whereas petroleum-based grades such as PBAT, PCL, PBS and PGA are polymerised from petrochemical monomers.

Midstream covers the manufacture of degradable plastic products: single-use tableware, single-use plastic bags, packaging paper, apparel, agricultural film, 3D printing materials and pharmaceutical materials, among others.

Downstream is where degradable plastics are actually used, spanning packaging, electronics, automotive and transportation, consumer goods, textiles, agriculture, coatings, 3D printing, modern medicine, and building and construction.

Chart 1: Structure of the degradable plastics value chain

In recent years Europe, the United States, Japan and other developed economies have rolled out regulations one after another. Partial bans, restrictions on use, mandatory collection and pollution levies are being deployed to curb non-degradable plastics, while fully biodegradable new materials receive strong backing — all in the name of protecting the environment and the soil.

Between 2019 and 2020, a string of Asian countries followed with their own plastic restriction policies, among them China, Pakistan, India, the Philippines, Thailand and Algeria. Demand for biodegradable plastics across Asia is therefore expected to climb rapidly in the period ahead.

As for direction, PLA and PBAT represent the two main development paths for degradable materials. PLA is among the most familiar degradable plastics: its production process is pollution-free, and the finished product can break down into carbon dioxide and water, leaving no burden on the environment.

PLA also offers dependable biological safety, biodegradability, solid mechanical properties and easy processing, which is why it is widely used in packaging, the textile industry, agricultural mulch film and biomedical polymers.

PBAT, for its part, is a thermoplastic degradable plastic combining good ductility and elongation at break with solid heat resistance and impact performance. Its excellent film-forming behaviour and easy blown-film processing make it a common choice for single-use packaging films and agricultural films. Lower-cost petroleum-based feedstock, more mature engineering, smaller capital intensity — together with its properties and end uses — point to PBAT becoming the largest degradable plastics category in the years to come.

Chinese producers of PLA and PBAT that stand out today include Kingfa Sci. & Tech., Jindan Technology, COFCO Technology, Wangjinglong, Huaxin New Materials, Guanghua Weiye, Fengyuan Group, Hisun Biomaterials, Tianren Biological, Tongjieliang Biological, Hengli Petrochemical, Tongcheng New Material, Yifan Pharmaceutical, Ruifeng Hi-Tech, Wanhua Chemical and Lanshan Tunhe, among others.

Chart 2: Panoramic map of the degradable plastics value chain

1. Regional heatmap of China's degradable plastics chain: small production scales leave concentration lagging

Looking at where the representative companies sit, China's degradable plastics chain spreads across Shandong, Anhui, Guangdong, Jiangsu and other provinces — but production scales are generally small and market concentration still has room to improve.

Chart 3: Regional heatmap of representative enterprises in the degradable plastics value chain

Biodegradable plastics remain an emerging industry. Profit only arrives once technology investment reaches a certain scale, and small and medium-sized players — constrained by limited capital — cannot reach economies of scale, cost efficiency or the marketing push required. Products end up too expensive to gain traction domestically. That is why domestic production scales are generally small today and market concentration still needs to improve.

At present, the strongest production players in China's degradable plastics chain include Kingfa Sci. & Tech., Jindan Technology, Hengli Petrochemical, Hengyi Petrochemical, Wangjinglong, Rongsheng Petrochemical, Huafeng Chemical, COFCO Technology, Wote Group, Huaxin New Materials, Guanghua Weiye, Fengyuan Group, Hisun Biomaterials, Tongcheng New Material, Yifan Pharmaceutical, Danhua Technology, Ruifeng Hi-Tech, Prince New Materials, Yuto Technology, Guoen Holdings, Tianyuan Group and *ST Zhaoxin, among others.

Chart 4: Regional distribution of selected representative enterprises in the degradable plastics value chain

Further data and analysis can be found in the Market Foresight and Investment Strategy Planning Analysis Report on China's Degradable Plastics Industry, published by Qianzhan Industry Research Institute. The institute also offers industry big data, industrial planning, industrial application support, industrial park planning, industrial investment promotion, IPO feasibility studies and prospectus drafting.

——This article is republished from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-377639.html