The UK plastics industry has enjoyed highs of late, but Law outlines the potential ‘downs’ on the horizon
In his last blog of 2014, Philip Law, Director-General of the British Plastics Federation, takes a balanced look at highlights that have boosted the industry over the last 12 months, as well as potential threats to continued and sustained success.
As we approach the end of 2014, should we be happy or should we be concerned? I advocate a good old dose of industrial hypochondria to avoid complacency and to put ourselves firmly into the category of ‘the worried well’.
The industry has certainly had a good year. Business confidence is on a high. Investors have reaped rewards. We have seen stellar performance in markets for technical products, particularly in the automotive sector. With markets flat in Europe an increased number of firms have been prowling overseas markets including packaging and construction products companies. Innovation is at a high level and material substitution continues, as illustrated by Dairy Crest’s recent announcement that it is shutting down its glass milk bottle production in favour of plastics. Processors are benefiting from the reduced price of raw materials resulting from the oil price decline. The impetus given by the Government to shale gas development holds some promise that in the long term our comparative competitive advantage will improve. In the meantime, we have seen the re-shoring of some projects from China.
But nothing is a given and life is precarious. The disruptive effects of global events remain a high probability. Some of our end-use markets are stumbling. Automotive production temporarily went off the boil. Retailers such as Tesco and Sainsbury have their travails and are immersed in price wars with budget rivals. We are an ageing industry with vulnerable demographics. Engineering skills are in short supply. Energy availability to keep our machines running over winter is vulnerable. Only in late November a further, this time Scottish, power station was closed for safety reasons. Next May we will see a General Election. A further coalition Government seems an inevitability. The uncertainty is likely to affect investment in the UK.
To help maintain the positive twist, the BPF will be producing a formal strategy for the UK plastics industry in 2015 and has already embarked on a political contact programme to raise the profile of the industry with MPs and local stakeholders. We are setting up an ‘Education and Skills Committee’ to help fill the skills gap in the industry and this will hold its first meeting, with Cogent support, on 27th January. We will be building on our recent successful exhibition in Mexico and we will be leading trade delegations to the Plastindia exhibition in Gujarat, India in February. If Government funding remains available we will be taking UK stands to Chinaplas in Guangzhou in China, Plastpol in Kielce in Poland, Plast in Milan and Plasteurasia in Istanbul.