Recently, DuPont released the results of a survey it had conducted in China this August to measure Chinese consumers' awareness, perceptions and attitudes about household green products generally, and biobased products in particular. According to this study, only 4 in 10 of those surveyed said they are very or somewhat familiar with green products, although interestingly, fully 70% of those surveyed expressed confidence in the environmental claims of green products. And asked about their likelihood to buy products made with biobased materials, the majority responded that they would likely, if not definitely, do so. The Chinese, it would seem, are ready for biobased product growth.
DuPont is not the only one to think so.
|Courtesy: AECOM China Sustainability Center.|
Bruno Rudnik, managing owner of the Munich-based consultancy SusTech Consult that specializes in identifying cleantech opportunities in emerging markets, sees significant market potential for environmentally friendly technologies and materials in China. "Right now, we're seeing a paradigm shift in China," he said at the European Bioplastics Conference earlier this year. "A development away from pure economic growth to high-quality, inclusive growth."
China, said Rudnik, is no longer an export-driven economy, but domestic consumption driven; one that has gone from a focus on imitation, low costs, inbound investment and low value added manufacturing to a focus on innovation, high skills, outbound investment and high value added manufacturing.
"China is the largest plastics processing country worldwide," continued Rudnik, "and the biggest global CO2 emitter, with per capita levels close to those in Europe."
Combined with the country's awareness of "a need to act" in the face of massive environmental challenges, government support for the development of new materials, including biomaterials, and the government's commitment to environmental protection - described as a key target in the current Five Year Plan - the time would seem to be ripe for biopolymers to take off in China. Rudnik: "There is a strong market for cleantech due to political awareness and the availability of capital to invest."
China currently has a total bioplastics production capacity of 300,000 tonnes/yr, almost exclusively for biodegradable materials. Some 60% is starch based. However, total output is only 150,000 tonnes, and mainly destined for export. Local market demand stands at approximately 20,000 tonnes. Nonetheless, capacity is projected to double by 2015.
Sensing potential, SusTech Consult conducted a survey of its own in July 2012 to find out more about the status and growth prospects of the market in China for bioplastics.
They interviewed 102 companies - branded converters, custom converters and OEMs - with a focus on durable applications, operating in China. Of these, 75% were Chinese and 25% were foreign owned, including joint ventures.
An overwhelming 95% of the participants in the survey reported that they had never used biopolymers. Of the 5% who had, 80% were Chinese companies, and 60% were OEMs.
"It was interesting to discover that Chinese OEMs were the first movers in using bioplastics in China," said Rudnik. The survey revealed that whereas foreign companies paid lip service to the idea of bioplastics, it was the Chinese OEMs who actually used them.
The most important reason for not using biopolymers was the high price of these materials, closely followed by the converters' the lack of decision power. A startling finding was the fact that, when asked why they hadn't considered using biopolymers, 18% responded with "don't know what they are."
And only 22% of the respondents foresaw that bioplastics would account for a sizable share - more than 5% - of polymer consumption in China over the next 5 to 10 years.
Nonetheless, as China is now the major processor of plastics worldwide, it is an important factor in any large-scale bioplastics commercialization scenario. While market share and consumption is still very low, the growth prospects are there in the mid-term, driven by the stricter legal regulations that are being put in place by the government, growing demand from the end users, company image and the improved performance of biopolymers. This corresponds neatly with the finding of the DuPont survey that "Manufacturers see increasing value for products with environmental benefits."
Market analyst Rudnik sees a major capacity build-up of Chinese producers ahead, with improvements in technology and cost parameters to follow suit. "Chinese OEMs are interested in new materials. Plus, Chinese companies in general are more willing to try new things. Now would be a good time for early cooperation and to contact stakeholders in the Chinese bioplastics industry - first the OEMs, and second the industry associations and government authorities. It's also a good time to start educating Chinese companies about bioplastics," he said, before adding in a more direful tone: "Prepare for innovation from China."