ID: MRFR/CnM/4364-CR | July, 2018 | Region : Global
Impact of COVID-19 on the Polyvinyl Alcohol Market
The novel corona virus pandemic is having a major impact on the chemicals industry. Demand for chemicals is experiencing severe shocks across end-markets, stock prices of several chemical companies have taken unprecedented hits, and the global supply chains are disrupted. The automotive & transportation, construction, and consumer products sectors are among the hardest hit end-markets, with demand for chemicals falling by over 30%. Whereas, the demand for pharmaceuticals, food additives, and disinfectants is peaking, and chemical companies exposed to these sectors are reporting record outbound volumes.
The chemical sector’s supply chain is strongly dependent on the Chinese market, which has been heavily impacted by the COVID-19 pandemic and instituted wide-ranging countermeasures to contain the pandemic, which includes shutting down of the industrial manufacturing sectors. In addition to creating potential challenges in obtaining necessary raw materials, the disruption of global supply chains has also been jeopardizing chemicals producers’ ability to deliver finished products to its customers.
The packaging industry is the largest consumer of polyvinyl alcohol, owing to its excellent oxygen and aroma barrier properties. With major industry sectors having stopped production, the governments have allowed manufacturing operations and delivery of essential commodities like food and medicines to continue. With food packaging being the packaging industry’s largest area of activity, the USD 900 billion global industry is on the front lines in this pandemic. However, the coronavirus crisis has already led to some of the sharpest declines in demand for certain types of packaging (industrial, luxury, and some B2B-transport packaging), while fast-tracking growth for e-commerce shipments (pharmaceuticals, FMCG, food) is being witnessed. Many packaging plants, along with food and pharmaceutical plants around the globe, are operational now and are likely to continue a steady growth in the years to follow.
Various leading players in the chemical industry have stepped up to produce raw materials required for safety products needed in order to limit the spread of the virus. Companies manufacturing fuel-grade alcohol are now manufacturing neutral alcohol for hand sanitizers and other disinfectants. The plastic manufacturers for sports gears are making medical shields. Key industry players such as Dow, Huntsman, and INEOS are ramping up the production of hand sanitizers. Moreover, Honeywell announced its plans to open a new manufacturing facility to produce protective masks, while Solvay partnered with Boeing to produce face shields in response.
The growing use of polyvinyl alcohol (PVOH) in applications that are witnessing a high demand is expected to sustain moderate growth for the global polyvinyl market during the assessment period. The global market is positioned to witness a CAGR of 4.09%, which projects a sluggish, yet consistent growth. Market valuation of the PVA market was recorded at USD 1.39 billion at the end of 2017 and is expected to reach an approximate evaluation of USD 1.76 billion by the end of the review period.
Polyvinyl alcohol is a petroleum-based biodegradable polymer and is soluble in water; which makes it a good choice for applications that require environmentally friendly materials. Presently, there is a global focus on improving the condition of the environment and reducing the impact of harmful chemicals. Consumers are increasingly demanding products which have a minimal carbon footprint. Amidst this, there is a high demand for conveniently packaged food items along with scrutiny on plastic consumption. As a result, the food & beverage industry is turning to biodegradable plastics in order to meet the high demand for sustainable packaging in a global consumer-centric environment. PVOH has emerged as the prime choice in manufacturing sustainable packaging due to its excellent oxygen barrier properties, solubility in water and biodegradability. Additionally, polyvinyl alcohol is one of the most extensively used polymers in vinyl-acetate based emulsions (VAE) as it acts as a superior emulsifying and dispersing agent. Use of these emulsions drastically enhances end-product properties. For instance, PVOH is used in the manufacturing of adhesives, its addition improves adhesion to hydrophilic substrates, offers better crosslinking, good wet tack, and good heat resistance. Moreover, vinyl acetate-based emulsion applications are not limited to adhesives and are used in paints & coatings, textile, re-dispersable powders and construction products. The wide applications of VAEs are expected to contribute to the growth of the global PVOH market.
Vinyl acetate monomer (VAM) is essential in the production of PVOH and has witnessed lower supply in the last few years, thus driving up the price of the raw material. The increasing prices of VAM are expected to hamper market growth during the review period. Despite this restraint, the market is expected to find ample opportunity for growth in the construction sector due to the increasing construction activities across the globe, particularly in emerging economies. PVOH is used in a wide variety of construction chemicals such as sealants, joint cement, grout, and mortar among others. With the global construction chemicals market, the PVOH market is expected to grow proportionally.
The global polyvinyl alcohol market is segmented on the basis of grade, end-use industry, and region. By grade, the market is segmented into partially hydrolyzed and fully hydrolyzed. Partially hydrolyzed polyvinyl alcohol accounts for the most significant share of the total market due to its high water-soluble nature and low viscosity, making it preferable than the alternative. Presently, the partially hydrolyzed PVOH segment accounted for over fifty percent of the total market and recorded value of USD 788.3 million in 2017. Projections for this segment estimate a value of USD 1.05 billion by the end of 2023 and a CAGR of 4.93% during the assessment period.
By end-use industry, the market is segmented into packaging, paper, construction, electronics, textile, and medical. The packaging segment currently accounts for 38.2% of the total market. The crucial use of PVOH in the production of biodegradable packaging will be a key contributor to the segment maintaining its leading position. However, the textile industry is expected to grow at the fastest CAGR of 5.49%, due to its extensive use for textile warp sizing applications. PVOH is also used to treat textile to maintain colorfastness. The steadily growing demand for textile and global demand for high quality is expected to affect positive growth for the PVOH market directly.
By region, the global market is segmented into North America, Europe, the Asia-Pacific, Latin America and the Middle East & Africa.
The Asia-Pacific accounts for the largest segment with the highest CAGR over the assessment period. The increasing demand from application industries in the region and presence of a huge textile industry is expected to encourage the growth of PVOH market. The region also has increasing use of construction chemicals for construction activities and PVOH's vital role in the production of such chemicals is expected to further contribute growth for the region. Additionally, the region, particularly Japan, has a high concentration of global market leaders in PVOH market. The Asia-Pacific region is expected to value USD 791.3 million by the end of 2023.
Led by Germany, Europe is the second largest regional market due to the presence of several key players in the market and the increasing demand for sustainable packaging.
The market is semi-fragmented and in the report, analysis of major players include eminent market leaders such as Chang Chun Group., OCI Company Ltd., The Nippon Synthetic Chemical Industry Co. Ltd., Merck KGaA, Sekisui Chemical Co. Ltd., Anhui Wanwei Group., KURARAY CO. LTD., China Petroleum & Chemical Corporation, and Japan Vam & Poval Co. Ltd. among others.
Competitive landscape –Polyvinyl Alcohol Market
The polyvinyl alcohol demand is growing at a sluggish rate. However, the demand in emerging economies is slated to grow moderately. The market is semi-fragmented and is dominated by tier-1 players. Kuraray accounts for the largest market share in the global polyvinyl alcohol market in terms of revenue and capacity. Competition among the players is moderate, and most of the players have a vertically integrated business.
The major players operating in the global polyvinyl alcohol market are Merck KGaA (Germany), OCI COMPANY Ltd.(South Korea), The Nippon Synthetic Chemical Industry Co., Ltd.(Japan), Sekisui Chemical Co., Ltd. (Japan), KURARAY CO., LTD.(Japan), Anhui Wanwei Group.(China), Chang Chun Group.(Taiwan), Japan Vam & Poval Co.,Ltd.(Japan), and China Petroleum & Chemical Corporation (China) among others. Among the aforementioned players KURARAY CO., LTD. is the leading market player with a nameplate capacity of 361 KT; the company has production units in Japan, Singapore, Europe, and the U.S. The company’s main strategy revolves around the expansion of capacities and offer superior quality products at competitive prices. For instance, in 2016, KURARAY CO., LTD inaugurated a new KURARAY POVAL plant in Pasadena, Texas. The plant cost around USD 300 million and would produce 40,000 metric tons of PVOH annually. This capacity expansion helped the company to meet the rising demand for polyvinyl alcohol across North America
In 2016, Kuraray America Inc, a subsidiary of Kuraray Co. Ltd. inaugurated their new La Porte plant with an annual production capacity of more than 40,000 tons of PVOH. This has helped the company to become the world’s largest manufacturer of PVOH with 365,000 tons capacity.
In 2015, Kuraray announced to expand their manufacturing facility of optical use POVAL film at their Saijo, Japan-based location. The company would increase the production capacity by 20 million square meters/year.
Sekisui Chemical Co., Ltd. is involved in the manufacturing of high-performance plastics for automotive, information technology industries, and medical; and provides residential housing construction. The company operates through three business segments namely housing, urban infrastructure and environmental products (UIEP), and high-performance plastics (HPP). The company is one of the leading players operating in the global polyvinyl alcohol market. In 2009, it purchased the polyvinyl alcohol business from Celanese Corporation with a production capacity of 120,000 TPA to address the growing demand for PVA films in the U.S and Europe. The company has production units situated in Calvert City, Kentucky, Pasadena, Texas and Tarragona, Spain. Sekisui has secured its position among the top five manufacturers in the global polyvinyl alcohol market.
In 2013, the company launched five new cosmetic grades polymers under the brand name Selvol Utalux. The newly launched product is equivalent to the Selvol polyvinyl alcohol grades. The newly launched product is in sync with the active ingredients requirements of personal care industry.
Merck KGaA is involved in the manufacturing of chemical products and pharmaceutical. The company operates through three business segment namely healthcare, life science, and performance materials. The life science segment offers laboratory materials, technologies, and services. The performance materials sector comprises of specialty chemicals and materials for demanding applications. The company has its presence across Europe, North America, and Asia Pacific. The company’s main strategy for polyvinyl alcohol includes product launches.
For instance, in 2016, Merck kGaA introduced a new product named as Parteck MXP, a polyvinyl alcohol-based excipient. This product launch helped the company to expand the product portfolio and to meet the rising demand for PVA worldwide
In 2015, Merck kGaA introduced Parteck® SRP 80, a PVA based new functional excipient for oral sustained release formulations. This product launch helped the company to meet the increasing demand for PVA in pharmaceutical applications.
The Nippon Synthetic Chemical Industry Co., Ltd. is involved in the production, processing, and sales of synthetic resin products in Japan and internationally. The company offers gohsenol and numerous specialty polyvinyl alcohol products. The company also offers IT and electronic products comprising OPL film, an indispensable element of LCD displays, which are used in making polarizing films, soarnol, soarlite, and soaresin products. Moreover, the company provides specialty polymers consisting of coponyl, shikoh, nichigo polyester, mowinyl, mowinyl-powder, and other products. The Nippon Synthetic Chemical Industry Co., Ltd. is a subsidiary of Mitsubishi Chemical Corporation.
In 2016, NIPPON GOHSEI, a leading manufacturer of specialty chemicals, expanded the production capacity of Hi-Selon, a water-soluble plastic film made from polyvinyl alcohol at their plant location in Japan. This expansion has helped the company to meet the rising demand for PVA films.