Philip Law gives his outlook for the UK plastics industry in 2014, including the issues surrounding shale gas and packaging recycling, as well as looking at the opportunities offered by growing overseas markets.
We start 2014 with optimistic assessments of a real recovery of the UK Economy. These are likely to be confirmed in the BPF's January Business Conditions Survey, currently being undertaken. It is very important that the UK recovery is not based, as has happened previously, on booming house prices and on consumer demand fuelled by debt. We need to see recovery based on rising business investment, an increase in the export of products and on investment in infrastructure.
As with last year, energy remains of great concern. Shale gas deposits will certainly give the UK a tremendous boost in the 2020's, not just in national energy supplies, but also in raw material feedstock for the plastics industry. But on the negative side, we are likely to face next winter with UK energy supply not equalling demand. David Cameron has recently protested that keeping the lights on is his number one priority, but the question needs to be asked, whose lights? I'm sure he had consumers in mind; therefore the risk of blackouts in industry remains a very real concern.
Overseas, pundits on the Indian market predict that by 2025 India will be the third largest consumer of plastics globally. The Indian plastics industry is growing at a rate of nearly 15 percent per annum and consumption in India will reach 15 million tonnes by 2015. However, it's not all plain sailing. The Indian automotive market saw a 9.6 percent decline in car sales in 2013, the first decrease in 11 years. We are encouraging companies to plan ahead and join us at the Plastindia 2015 fair, which will take place from 5th - 10th February 2014. A projected transfer of the fair to the state of Gujarat has been cancelled and the fair will remain at Pragati Maidan in New Delhi, which will be a relief to UK exhibitors and visitors as a fair in Gujarat would have been less accessible and offer much less in terms of hospitality opportunities.
The packaging recycling system currently operational in the UK engenders much controversy. The BPF has recently despatched a report to DEFRA, illustrating that the basic figures on which recycling targets are calculated and achievements reported are somewhat faulty, being overstated by 300 - 400 thousand tonnes per annum. The growth rates have also been shown as being heavy handed, with an assumption of 2.5 percent annualised growth. These facts were divined by Phil Conran of 360 Environmental Ltd, working on behalf of the BPF's Recycling Group, and were based on his researches in the National Packaging waste database. It all emphasises that we need legislation based on facts so that compliance costs are not exaggerated. We've been telling the Government for some time that the growth rates were exaggerated, that there had been a slow down in consumer expenditure on packed goods and, alongside this, that significant progress has been made in the lightweight of packaging. Now we have the facts to prove it.