Market News

The Philippines has been recording steady growth as reflected in its gross domestic product (GDP) which posted a 7.6% expansion in 2022, according to official figures released by the Philippine Statistics Authority. Main contributors to the positive economic performance are industries such as manufacturing, construction, semiconductors and electronic components, etc. Within the industrial sector, the plastics industry has shown resiliency as the Philippine plastics market is forecast to post over 5% CAGR from 2023-2028, driven by demands from packaging, electrical and electronics and building & construction, based on a Mordor Intelligence report.

Top performer is packaging due to the strong e-commerce business and rising smart packaging market. The personal care and cosmetics sector has also been seeing increased requirements for packaging due to robust demand. Food and beverage production has been a major segment in the manufacturing industry as retail sales in the packaged food market in the Philippines alone was estimated to have reached US$17.4 billion in 2022, according to Euromonitor.

The Philippine plastics industry continues to rely on imported raw materials and finished plastic products, as well as machinery and processing technologies. This has created positive prospects for producers of raw materials and compounds, and advanced machinery. In particular, injection molding systems are in high demand in the packaging and automotive sector for the production of bottle caps, packaging items, automotive dashboards, pallets, etc. Extrusion molding is also an important production method with Philippine plastic extrusion molded parts market size valued at US$788.2 million by 2023, growing at a CAGR of 3.5%, based on Allied Market Research report. This mode has been producing plastic components such as drinking straws, pipes, curtain tracks, wall components, wall protection components, and automotive parts, according to the report.

Environment protection trends are transforming the Philippine plastics industry – as from the linear model, the industry is moving towards a circular economy model. The Philippines is considered the third largest generator of plastic waste worldwide, dumping an estimated 0.75 million metric tons of plastic waste to the ocean annually. This reputation has brought plastic manufacturers to take a serious look at the domestic production and consumption of plastics, and implement steps to minimize plastic waste.

The Philippine government is implementing the Extended Producers Responsibility Act (EPR) which took effect in 2022 and requires companies to recover their plastic packaging waste. Under the law’s implementing rules and regulations, the companies are responsible for the proper and effective recovery, treatment, recycling or disposal of their products after these were sold and used by consumers to minimize plastic waste. Companies also need to raise their recovery rate to reach 80% by 2028 and onwards. With this law, an increasing number of Philippine-based companies are now implementing strategic investments into recycling and this has spurred requirements for innovative recycling and processing technologies.

A recent project in response to the EPR is the multi-layered plastic (MLP) upcycling facilities of Alaska Milk Corporation (AMC) in partnership with D&G Pacific Corporation. The facility is designed to help minimize pollution caused by single-use plastics. AMC, a subsidiary of Dutch dairy cooperative FrieslandCampina, aims to collect single-used plastics and use these to produce WoW boards which are sturdy panels or sheets that are a direct replacement for particular boards, medium density fiberboard (MDF), and plyboards and can be used to create various projects such as furniture. The panels are completely recycled and do not use chemicals or additives during manufacturing, ensuring that the product is recyclable, termite-proof and water-resistant. The plastic recycling facility uses the TrashBot technology imported by D&G Pacific from India that turns plastics and non-degradable materials that are otherwise dumped or burnt.

Another company is Coca-Cola Beverages Philippines, Inc. (CCBPI), which has been implementing a collection program for post-consumer PET plastic bottles in various locations and raising consumer awareness on the value of used clear PET plastic bottles and recycling them. This project forms part of Coca-Cola’s global World Without Waste commitment that targets to collect and recycle every single bottle and can that the company sells by 2030. The company also operates PETValue Philippines, a state-of-the-art recycling bottle-to-bottle recycling facility, capable of processing clear plastic bottles made from PET material. PETValue Philippines is a joint venture between CCBPI and Indorama Ventures.

Klean Industries Inc. is designing and building a 10,000-metric-ton per year waste plastic pyrolysis plant in the Philippines with RGH Systems Inc., a wholly owned subsidiary of REI Global Inc. Both companies have been exploring the possibilities of working together for the construction and roll-out of several pyrolysis facilities throughout the Philippines and in other areas of Southeast Asia. Feasibility study is being prepared with construction to start this year and operations to begin by first quarter 2024. The facility will transform polyolefin plastics such as PP, PE, LDPE, HDPE, and PS into high-quality fuels for reuse in the local economy. This plant will be fully integrated with Klean’s proprietary KleanLoop™ Blockchain SaaS platform which will track and trace all incoming feedstock, operations, carbon emissions offsets, and product sales with a level of transparency that is first in the Philippines recycling sector.

Key players in the plastics industry are also making their operations more sustainable in compliance with the goal of alleviating climate change. For instance, Knoll Packaging, a leader in deluxe packaging, is opening a fully owned and operated factory in the Philippines. The custom-built facility features a highly sustainable design as the 8,000-square-meter plant will have full rooftop solar array, rainwater collection for re-use, and a low carbon footprint. The Philippines factory will also feature Knoll Packaging’s proprietary custom-built machinery designed for cost efficiency and continued high quality. The factory is located in a duty-free trade zone with neighboring facilities owned by Epson, Dyson, Honda and many others, and is close to Manila Port.

As leading companies in the Philippines embark on a circular economy transition, they will require highly advanced recycling processes that need innovative technologies and machineries. This will go along rising demand for recycled plastic materials in compliance with increased recycled content. At CHINAPLAS 2023, Asia’s No. 1 plastics and rubber trade fair, more than 3,900 exhibitors are demonstrating their advanced technologies, machineries, raw materials, and auxiliary equipment for visitors from the Philippines and the rest of Southeast Asia to support their transition towards sustainable production.

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