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19 - 22 June 2024

The Role of "BCG" Business Model in the Plastics Industry and the Necessity of "Bioplastic" Innovations

10 February 2023

  • The BCG model that promotes bioplastics is becoming the new norm for the plastics industry.
  • Thailand is one of the world's plastic production hubs, but manufacturers still need to monitor the growing trend of bioplastics closely.
  • Bioplastics are growing rapidly because major industry such as automotive is using them in their production. Its popularity is also boosted by various government policies, product research and development, and consumers’ preferences for environmentally friendly products.

The buy-produce-dispose economic model has now been replaced by the BCG model (bio-circular-green economy) in order to make the best use of resources while limiting the impact on the environment. This model has increasingly become more popular, especially in the plastics industry which was previously often regarded as a villain and destructor of the global environment.

Nowadays, while we are already seeing the recycling of paper, plastics and metal, the Circularity Gap Reporting Initiative reported that only 8.6% of the global economy was circular. This means over 90% of the materials used in the manufacturing industry are made from new materials instead of recycled or reused materials. Accordingly, there is still a lot of room to grow for recycled materials in the industrial sector, especially in the plastics industry which can adopt the BCG model by using more bioplastics made from biomass sources that can be recycled. These sources can include straws, wood chips, sawdust, oils and resins from plants, corn starch and various food waste among others.

Regarding the plastics industry in Thailand, Krungsri Research estimated that domestic sales of plastic products could grow on an average of 2.0-3.0% per year from 2021-2023 after a recession in 2020. Meanwhile, the export volume could grow by 2.0-3.0% per year following Thailand’s economic recovery contributed by the growth of various industries such as electrical appliances, packaging, construction, automotive parts and medical equipment which altogether account for almost 80% of the total plastic consumption in Thailand.

Thailand’s plastics industry plays a huge role in the global plastic landscape because it is one of the world’s major hubs for plastics manufacturing. The economic value of this industry is estimated to be 1.0 trillion baht due to the outstanding quality and price as a result of Thailand’s strong petrochemical industry which has considerably much higher production output compared to other countries in ASEAN.

The global bioplastics market was valued at $8.14 billion in 2021 and is expected to reach $18.05 billion by 2027 at a compound annual growth rate (CAGR) of around 14%. What drives the rapid growth of this market is the increasing demand in the automotive industry to produce lighter vehicles. At the same time, bioplastics mitigate the environmental impact of automobile manufacturing by reducing energy consumption and carbon dioxide emissions. Materials such as PTFE (Teflon) and Bio Polyamide have proven to be highly effective as insulators for high-pressure and high-temperature applications. They are also easy to mold and therefore are preferable in commercial production.

Furthermore, the positive factors also include the advancement in R&D of electronics, medical, packaging, and technological fronts. The other supporting factors include the rising price of fossil fuels, the increasing demand for environmentally friendly products, and the policies mandated by governments around the world to reduce greenhouse gas emissions.

The famous scientific journal “Nature” reports that around 2 million tons of bioplastics that are 100% bio-based are currently being produced annually. It is considered part of a future circular economy to align with the United Nations’ Sustainable Development Goals such as shifting away from the use of fossil fuel, adopting new approaches for recyclable or biodegradable materials, and promoting the use of less toxic reagents and solvents in the production of bioplastics. All of these can lead to better resource circulation that can ultimately lower carbon dioxide emissions.

The term sustainability can refer to several technologies, production processes, or concepts. Therefore, InterPlas Thailand 2023 will focus on the concept of sustainable production, or "The Path…to Plastics Sustainability" where participants will get to experience live production demonstrations with their own eyes. RX Tradex, the event organizer would like to invite every industrialist in the plastics industry to attend InterPlas Thailand during 21-24 June 2023 at BITEC, Bangkok to meet directly with exhibitors of machinery, technology, chemicals and raw materials for the plastics production from over 300 international brands.

For those interested in the latest developments in the plastics industry, don’t forget to follow new issues of ME Blog, and get ready to catch up on the latest trends in plastics manufacturing industry at “InterPlas Thailand 2023.”