Industrial bulk chemical packaging stores and transports various chemicals such as Consumer Chemicals, specialty channels, basic inorganic chemicals, hazardous chemicals, and petrochemicals. The industrial bulk chemical packaging solutions available in the market include various drums, flexitanks, rigid IBCs and others. The industrial bulk chemical packaging products are available in multiple capacity sizes ranging from 100 litres to over 500 litres. The governmental regulations and guidelines associated with the storage and shipment of the chemicals will impact the market. The “Global Industrial Bulk Chemical Packaging Market” is predicted to reach a high CAGR (the Compound Annual Growth Rate) during the forecast period (2021-2028)
Expanding at a robust growth rate of 6.8 percent, the global demand for bulk chemical packaging is estimated to reach a valuation of approximately US$ 10.7 Billion, in 2019, as per a recently published study Future Market Insights (FMI) on the global packaging landscape for bulk chemicals. Bulk chemicals, also called commodity chemicals, have witnessed a surge in demand given its wide application in a host of end-use industries such as healthcare, food processing, construction, and automotive.
The sudden outbreak of the COVID-19 pandemic in December 2019 raised the demand for bulk chemical packaging solutions in various parts of the world. This mainly happened because of the increasing consumption of packaged products and growing need for pharmaceutical products. Further, the invention of vaccines to fight the coronavirus infection, as well as the mass production of sanitizers, disinfectants, protective equipment, and detergents across the globe, drove the chemical distributors, suppliers, and manufacturers to work around the clock for ensuring timely availability of bulk chemicals.
In March 2020, for instance, the World Health Organization (WHO) declared that every month, an estimated 89 million medical masks were needed to combat the COVID-19 pandemic. The international demand for goggles would go up to 1.6 million per month, while examination gloves would stand at 76 million. This showcases that the manufacturing capacity of PPE had to be increased to keep with the high demand and to protect the health of people, thereby driving the need for bulk chemicals, as well as their packaging solutions.
The global trade of bulk chemical products has increased many folds in the past two decades, pushing non-traditional chemical manufacturers to use bulk containers to address packaging demands. Some of these industries include bio-chemical manufacturers, specialty chemical manufacturers, and food grade ingredient manufacturers.
The global industrial bulk chemical packaging market is expected to drive growing international trade and demand for cost-effective solutions. The growing international trade is expected to drive the global industrial bulk chemical packaging market in the forecast period. The trade growth between the countries has been influenced by several factors such as developing technology, industrial activities, governments decisions, increasing competition, new trade agreements, etc.
The growing chemical trade among the countries creates a massive need for industrial bulk chemical packaging. For instance, The U.S was the leading chemical importer with US$ 285 billion (EUR 243 billion) and exporting value of US$ 236 billion (EUR 201 billion). In comparison, China imports and exports of chemicals accounted for US$ 230 billion (EUR 196 billion) and US$ 170 billion (EUR 145 billion). The European chemical surplus grew from US$ 103 billion (EUR 88 billion) in 2010 to US$ 209 billion (EUR 178 billion) in 2020, equivalent to average annual growth of 7.3 %.
Key factors driving demand include:
- Growing adoption of better performing and cost-effective larger containers versus smaller containers having short service life along with increasing shale gas explorations in U.S apart from other gas drilling and refining activities will drive more investments in chemical production, thereby, increasing the demand for bulk chemical packaging products across the globe.
- Intermediate bulk containers (IBC) and drums are expected to experience the fastest growth through 2019, as per the report, given its advantages of cost effectiveness and reusability. However, among the global bulk chemical packaging market’s product type, drums will remain the most preferred packaging product, with nearly 83 percent revenue share.
- The global bulk chemical packaging market is also reflecting product customization trends to suit the end-user requirements. Increased storage capacity, longer service life that allows large scale industrial customers to gauge the substantial long-term cost benefits, are some key considerations companies are making.
- Apart from dimensions, companies in the bulk chemical packaging market are also offering light weight and cost-competitive products compared to the more conventional steel drums. In addition, material enhancements to make bulk chemical packaging products corrosion and impact resistant are also being deployed.
Companies have been forming various strategies and making new developments in the field with increasing scope and competition. For instance, in 2018, Four packaging firms BWAY, National Container Group, Mauser Group and Industrial Container Services, integrated a new sustainability-focused firm, Mauser Packaging Solutions. The company will now offer packaging solutions in chemicals, petrochemicals, agrochemicals, etc.
The shortage of industrial packaging is responsible for restraining the growth of the industrial bulk chemical packaging market in the forecast period. The shortage resulted from several weeks’ delay of many containers and drums, or the containers were stuck in the wrong ports and hindered production capacity due to staff absenteeism, creating shortages of industrial bulk chemical packaging globally.
Moreover, there has been a continual rise in polymer and steel prices, affecting industrial bulk chemical packaging production in the present scenario. Various countries have been reducing trade or increasing taxes on trade, affecting the market growth. For example, China has increased export tax rebates on propylene, ethylene, and ethylene glycol.
Based on product type, the IBC’s segment is anticipated to account for the maximum share in the market. Growth is attributable to their ability to efficiently store, transport, and mass-handle solids, pastes, semi-solids, and liquids. Moreover, this type of packaging is reusable, thereby allowing multiple uses and cleaning. IBC’s are ideal for handling bulk chemicals, including dangerous goods or hazardous materials as they have a capacity of up to 1000 litres and are designed to be stackable. In addition to this, the easy availability of flexible IBC’s make of woven polyethylene or polypropylene is another factor set to proper the growth of this segment in the upcoming years.
Due to the pandemic, stakeholders across the industrial bulk chemical packaging industry have seen a notable impact as all the production work, factories and other activities were closed. Production and demand were hindered by halts and supply chain disruption globally as the industrial bulk chemical packaging market is dependent on the trade and demand for the chemicals globally. The market was negatively impacted by the huge decline in the logistics sector. The downfall in international trade and the closing of ports for a long time have directly impacted the growth of industrial bulk chemical packaging. In 2019, the world’s top nine of the top ten importing countries reported negative growth rates for exports and imports. Shipping rates of containers are a significant component of trade costs, so the new price hike poses an additional challenge to the world economy. As a result, it struggles to recover from the global crisis.
The intermediate bulk container is expected to hold the largest market for the industrial bulk chemical packaging market and are expected to continue their dominance in the forecast period. IBCs are used to transport and store various types of chemicals. The end-users’ emphasize IBC due to its potential benefits such as efficient use of space, less labour cost, freight and storage costs and elimination of disposal. The containers are available in various types of materials such as plastic, steel and composites. Moreover, the intermediate bulk containers are also offered on a rental basis, offering cost-effective solutions to the consumers.
The companies have been extending their IBC range in the region with the growing demand. For instance, in 2020- Schoeller Allibert, the market leader in recyclable, reusable and returnable plastic packaging solutions, has launched ChemiFlow, a U.N. approved Intermediate Bulk Container designed to transport hazardous and highly corrosive chemicals.
Asia-Pacific region holds the largest market share for the industrial bulk chemical packaging market globally and is expected to continue its dominance in the forecast period. The region requires effective industrial packaging solutions with evolving industrial actives. With the increasing chemical industry in the countries like China and India, trade activities are also expected to increase in the sector. For instance, China was the largest chemical exporting nation in 2019, with exports amounting to almost US$ 74 billion. Moreover, India holds the sixth position for chemical chemicals globally and the third position among Asian countries. The country is the third-largest producer of agrochemicals globally, contributing around 16% to the global dye intermediates and dyestuff production. These scenarios indicate the need for effective packaging for industrial bulk chemicals.
Europe also holds a significant market share for the industrial bulk chemical packaging market. The stringent rules associated with the transportation of hazardous chemicals have been a vital factor in shaping the industrial bulk chemical packaging business in Europe.
Despite the strong growth outlook projected for bulk chemicals packaging landscape, supply chain complexities that places the packaging manufacturers a couple of nodes away from end-consumers often results in lack of flexibility and agility among packaging manufacturers. Moreover, lack of processes and a seamless supply chain management, specifically among companies operating in chemical packaging sector, translates into a slower supply chain information process and customer-specific needs rarely communicated to manufactures in bulk chemicals packaging landscape.
Escalation in the raw material prices in addition to other input costs arising from lack of imports has increased prices of the bulk containers—exemplified by price hike of steel drums by Greif, Inc, a key manufacturer in bulk chemicals packaging market. This could remain a limiting factor against the growing demand for bulk chemicals packaging in the coming years, further limiting the profitability for the manufacturers. Elaborating on the trends projected to drive bulk chemicals packaging product innovations, the FMI analyst further adds, “Apart from dimensions and material customizations, manufactures, particularly in U.S have developed innovative barrier solutions with logistical and lifecycle benefits. Holistically, the strong performance of the chemicals industry, both commodity and specialty subsectors, can safely be attributed to the industry’s increased productivity over time and China’s substantial economic growth in the last two decades. Chemical industry’s promising future, will positively impact the bulk chemical packaging landscape, in the coming years.
