Germany’s EUR 54 billion (USD 76 billion) plastics processing industry, the largest in the European Union, offers a strong market for innovative U.S. plastics materials and equipment. Highly innovative plastics materials from the United States have best sales prospects in Germany, particularly “green” plastic materials; medical plastics products; packaging, smart plastics in electronics; nanotechnology products, and plastics for building applications. The market also offers good prospects for highly sophisticated or innovative U.S. peripheral instrumentation, equipment and machinery.
B2B marketplaces, direct purchase and marketing via wholesalers or distributors are the major channels of distribution in the German plastics materials sector. German distributors usually prefer long-term business relationships. In addition to pricing, quality and supplier reliability are major buying factors.
EU and German regulations may apply to machinery sold in Germany. It is essential for market acceptance that products have undergone full testing and are labeled with the CE mark. U.S. firms interested in the German or European plastics markets may wish to consider participating in the triennial K’ Show. The next K’ will take place in Dusseldorf, October 27-November 2010. K’ 2010, the world's prime trade event for plastics and rubber materials and machinery, is the international marketplace for the plastics industry attracting over 100 U.S. exhibitors. In 2007, the K’ Show hosted 3,130 German and international exhibitors and attracted 242,000 visitors.
Plastics Materials Germany’s EUR 54 billion plastics processing industry offers a strong market for innovative U.S. plastics materials and peripheral equipment. Good prospects for highly sophisticated peripheral equipment can be contrasted to weak prospects for extrusion machinery or standard injection molding equipment.
The outlook for the major subsector of the plastics materials market in Germany is as follows:
a. Green Plastics Introduced into Germany in 2002, green plastics have continued to gain in importance. In Germany, packaging is the main application for bioplastics. The share of bioplastics in the German packaging market is estimated at approximately 1% with an upward trend.
Biodegradable bags for plants or foils used in agricultural applications grew by 20% in 2008 over 2007, a trend expected to continue. While in the past, plant bags had to be collected by the farmer, today’s bags degrade in the field. The share of green agricultural foils in Europe amounted to 10% in 2008. Strong growth rates are expected. New applications are opening up for green plastics materials, including in automotive and funeral applications. Automotive producers increasingly use green materials in car production. Only recently, Toyota and Mazda, for example, have substantially increased the automotive plastic components made of renewable materials.
b. Plastics used in Medical Devices and Pharmaceutical Packaging
The German medical plastics market is not a mass market. It has seen limited but regular growth rates in the past few years. Insiders see an heightened interest in TPE for medical applications.
Successful U.S. suppliers can profit from long-term contracts, which are common in this market. Increasingly, polymers become important as biomedical materials ranging from biomedical implants such as hip or knee joints to medical coatings which limit infections inflicted by catheters and surgical instruments, or as sewing materials. Insiders expect the world market, including the German market, for biomedical materials to grow by 10-15% annually.
c. Food Packaging
As food is relatively independent of economic downturns in Germany, demand for food packaging, in particular, remained at high levels. While many plastics processing sectors saw a decline in demand as a consequence of the financial crisis, the German plastics packaging producers achieved 6% growth in 2008.
Organic solar cells, flexible displays and OLED-lighting as well as data storage devices were identified as the largest areas for growth in the medium term. Insiders expect that the market for organic and printed electronics will grow to a multi-billion-dollar market over the next ten years.
Germany is the largest market for nanotechnology in the EU. Insiders estimate that annual sales in the German nanotechnology market were EUR 33 billion in 2007 (approximately $46 billion). Plastics nanomaterials find applications in various German fields of industry ranging from automotive to electronics and energy to medical. Energy and medical industry are considered particularly strong growth markets for nano-applications.
Although demand is relatively stagnant, plastics used in the construction industry represent about 8.2% of the total German market for plastics. Over the medium term, insiders see some potential for plastics in the construction market. The local construction industry has been somewhat reluctant to replace traditional construction materials by construction plastics.
Competition for U.S. producers of standard plastics machinery is strong in Germany. Innovative machinery and peripherals do, however, have strong market potential. While there are steady imports of U.S. peripheral equipment, only a limited amount of standard plastics machinery originates from the United States. Like traditional plastics machinery, molds often face strong local competition. In addition, the shipment of large molds from overseas can be very costly.
By Kirsten Hentschel