Enhancement of Customer Experience by Powder-free Operation Creates New Growth Opportunities
Masterbatches allow easier incorporation of pigments and additives in polymer resins and elastomers and provide improved product consistency and process stability through better dispersion. These products also enable safer handling of hazardous chemicals by encapsulating them in a carrier resin or elastomer. Additionally, they are mostly available in a dust-free pellet form and ensure cleaner production area, reduction in cross-contamination, and quicker transition between different products. Hence, masterbatches are being increasingly preferred over conventional pigments and additives, particularly across different end-use industries, including packaging, agriculture, textiles, and healthcare.
The masterbatches market comprises segments including color, additive, white, black, and filler. The market has been divided into thermoplastics and thermosets based on end-product family type.
Both by value and volume, additive and color masterbatches together contributed to the highest shares in the global masterbatches market in 2020. They are expected to retain their dominant market share during the forecast period. Additive masterbatches contribute to better plastic performance, while colored ones improve the diversity of polymers, thereby, making the end products suitable for numerous application areas.
By end-product families, thermoplastics, including thermoplastic polymers and elastomers, accounted for the largest share of volume consumption of masterbatches worldwide in 2020 due to their high efficacies in providing consistent color addition and the ability to enhance the performance characteristics of natural or base resins. The demand for these masterbatches is expected to further increase in the future, particularly for various application areas that require commoditized thermoplastics such as PE, PP, PET, and PS. Packaging and films continue to remain the largest end-use industries for thermoplastic masterbatches, owing to the extensive usage of these pellets for manufacturing food and beverage packaging, greenhouse films, mulching films, and pharmaceutical packaging, among others.
The penetration of masterbatches for thermoset products, including synthetic rubbers and thermoset resins, was significantly lower than for thermoplastics, and this is likely to continue during the forecast period. For thermosets-based application areas, end users widely prefer using powdered or liquid pigments and additives that are commonly available at much lower prices compared to solid and liquid masterbatches. However, these thermoset masterbatches are occasionally preferred for value-added applications that involve excellent color and additive distribution. A few chemicals (e.g., mercaptobenzothiazole) are difficult to disperse in their original powder form and, hence, use masterbatches.
In the last few years, developing countries, especially those in Asia-Pacific, MEASA, and Latin America have been witnessing a significant increase in their middle-class population and household incomes, which has led to a growth in discretionary spending, particularly for commoditized thermoplastic-based products. Moreover, these economies have also emerged as prominent low-cost manufacturing hubs for both thermoplastic- and thermoset-based products, such as food and beverage packaging, agricultural films, non-woven surgical masks, apparel, home appliances, consumer electronics, piping, and automotive components. The market for masterbatches is likely to benefit from the increasing development of these end products, owing to their dust-free operation and capabilities to meet functional requirements across several application areas. The market is likely to witness high growth in China, Thailand, Vietnam, Indonesia, Malaysia, India, Turkey, Saudi Arabia, UAE, Mexico, and Brazil.
The matured markets of North America and Europe are increasingly focusing on availing value-added materials that are more and more sustainable, while providing improved performance across diverse domains. Large-scale companies need to penetrate the market with high-quality masterbatches that offer better color consistency, uniform additive dispersion, zero-dust operation, ease of processing, excellent recyclability, and extensive compatibility with different carrier resins.
While both solid and liquid masterbatches offer superior color dispersion and are highly effective in enhancing the properties of end products, they still face a constant threat from both powdered and liquid pigments and additives. Critical factors such as price, performance, and nature of end-product families determine the competition. Masterbatches are often more expensive than their powdered counterparts, which, in turn, is restraining their growth, particularly for engineered plastics and synthetic rubbers.
Moreover, due to the recent COVID-19 virus outbreak, both thermoplastic and thermoset material consumption across several end-use industries has been facing significant challenges related to supply-chain disruption and labor shortages. Additionally, many companies have suspended their production activities at numerous sites worldwide for the time being. This, in turn, has hampered the market growth of masterbatches globally, particularly for automotive, construction, textile, consumer, and electricals and electronics in 2020. However, the consumption of masterbatches for packaging, agriculture, and healthcare sectors witnessed growth, owing to increasing usage of packaged foods and personal protective equipment during the pandemic.
Masterbatch manufacturers are anticipated to emphasize more on strengthening long-term relationships with resin producers, distributors, compounders, and extruders, to control their position in the supply chain. Moreover, the market is expected to consolidate with mergers and acquisitions, coupled with vertical integration activities among companies, to increase product offerings and stay ahead of the competition. Additionally, companies are also focused on developing value-added and innovative product grades along with enhancing the performance of existing ones to drive revenue growth.
