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Latin America Plastic Caps and Closures Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 120 Pages
  • October 2021
  • Region: Latin America
  • Mordor Intelligence
  • ID: 5458952

The Latin America plastic caps and closures market is expected to register a CAGR of 4.5% during the forecast period (2021 - 2026).

The pandemic has also created economic turmoil for small, medium, and large-scale industries worldwide. Adding to the woes, country-wise lockdown inflicted by various governments to minimize the spread of the virus has further resulted in manufacturing industries taking a hit. The impact on the plastic caps and closures market is very minimal. It supports the end-user industries such as beverages, food, pharmaceutical and healthcare, cosmetics and toiletries, etc., which come under essential services and were not discontinued even amidst the lockdown restrictions in Latin America. However, the supply chain disruptions caused in starting four months in 2020 have resulted in order delays and lead time across the supply chain.

Key Highlights

  • Plastic caps and closures are extensively utilized in the food and beverage industry to protect and increase the product's shelf-life. This, in confluence with the escalating demand for packaged and ready-to-drink beverages, represents one of the primary factors bolstering the market growth in Latin America.
  • Caps and closures use PET and PP as the primary raw materials for manufacturing. Industries rely on plastic caps and closures, as they are cost-effective sealing solutions. The demand for packaged food and pharmaceutical drugs has been increasing at a healthy rate. As an impact of this, the plastic caps and closures market is also expected to increase demand during the forecast period.
  • Additionally, the increasing adoption of one-piece liner-less closures in packaged water bottles contributes to the region's market growth. Apart from this, the manufacturers are introducing flexible, airtight, tamperproof, and threaded plastic caps and closures. They are also offering customized solutions based on individual requirements. These factors are anticipated to expand plastic caps and closure in the region's pharmaceutical, cosmetics, personal care, and chemical industries.
  • For instance, Bannex International Inc. is a full-service, global supplier of sustainable, high-quality packaging materials, equipment, and services. The company has been servicing the Latin American food and beverage industry for more than 30 years. Bannex provides easy-to-open closures that combine beauty, sustainable design, and superior materials, resulting in a consistent, quality product. It also supplies glass packaging, metal closures, plastic closures, and capping equipment for various food and beverage applications.
  • Further, United Caps has launched bio-sourced 'greener' plastic closures. It has teamed up with Brazilian petrochemical company Braskem to produce plastic caps and closures made from sugar cane. The company has launched two standard closures manufactured using bioplastic resin from Braskem, including The Victoria closure, a 30/25 screw closure designed for still drinks, and Proflatseal, which is ideal for dairy products and still drinks, both pressurized and non-pressurized.
  • Moreover, in cosmetic packaging, caps and closures are majorly used for preserving beauty products and extending their shelf life. Plastic is a prominent material in cosmetic packaging due to its low cost, lightweight, flexibility, durability, and other factors. Primary plastic resin materials used to manufacture caps and closure for cosmetic products are polyethylene and polypropylene. In addition, For personal care products, plastics are a material of choice for manufacturing caps and closures. Increasing applications of caps and closures in cosmetics and home care products is further expected to drive the Latin American market growth. The rising demand for childcare products is also likely to impact the Latin American market positively.

Key Market Trends

Food and Beverage is Expected to Account For Significant Market Share

  • The food and beverage industry has dominated the Latin American PET market due to the massive demand for PET resins to manufacture bottles for soft drinks and other beverages. The beverage industry leads the plastic caps and closures market. At the same time, bottled water is expected to grow in every region, thus driving the plastic caps and closures market. Factors like innovative/customized products tamper-evident, child-resistant, and others are the driving aspects of the plastic caps and closures market. Additionally, Sales of the on-the-go format are also expected to grow.
  • Single-serving beverage bottles are being used more and more in fruit juices, enhanced waters, and other ready-to-drink beverages. Consumers look for alternatives to carbonated soft drinks that can be easily transported and consumed on the go due to increasing health concerns.
  • With the changing lifestyle, there is a spur in demand for packaged food in the region, which further augments the demand for PP packaging films in the industry. Brazil and Mexico are amongst the significant contributor to the demand growth in the area.
  • Mexico has a strong food processing industry that leads to Mexican brands like Bimbo, PepsiCo, Lala, Nestle, etc. Moreover, it has smaller domestic companies with established supply channels with major warehouse food clubs across Mexico, including Costco and Sam’s Club, which serve a large portion of the foodservice sector. This further drive the growth of the market in the region.
  • Further, according to Greenpeace Mexico, more than 7 million tons of plastic are produced per year; 48% of this material is destined for packaging. Although many of them are recyclable, they will not necessarily end up being recycled. For this reason, five municipalities and 22 states in Mexico have adopted laws or initiatives against single-use plastics due to their severe impact on ecosystems and biodiversity against their temporary use. Regulatory steps such as these will boost the growth of PETcaps and closures in the region due to its ability to recycle.

Brazil to Account for Significant Share in the Market

  • The Brazilian automotive sector is driving the filled polyolefin market in Brazil. Brazil has a relatively broad customer market base. The automotive industry has spread its wing far across to assembling and making Formula 1 racing cars. The automotive sector is a significant contributing sector to the Brazilian economy. The industry has undergone a considerable transformation with globalization.
  • About 72% of the PET resin demand was from the bottle application, driven by the beverage bottles for mineral water, carbonated soft drinks, ready-to-drink tea, and functional, dairy, and energy drinks. It is expected that the lightweight PET bottle trend will continue in the future as it is cost-saving. The country is also among the major markets for PET bottles collection and recycling.
  • For instance, Alpek has announced to acquire the Brazilian PET producer, PQS, which has a production capacity of 450,000 tons per year.
  • Further, the Brazilian beer market is the third-largest globally and produces 14 billion liters per year. The acquisition of Kirin by Heineken is additionally likely to drive the Latin American PET market.
  • Furthermore, many Brazilian cosmetics and personal care companies have strategically partnered with many global packaging companies for the packaging and expanding their global footprint and growing their product line and customer base into new markets. For instance, Weener Plastics (WP) has acquired the shares and operations of Orange Products Plasticos Ltda in Brazil (OPB) from Orange Products Inc (OPI) and C-Pack, its current shareholders. This acquisition will allow OP Brazil to provides the best packaging solution and grow its product line and customer base into new markets.

Competitive Landscape

The Latin America plastic caps and closures market is moderately competitive in nature. The major players with a significant share in the market are expanding their customer base across various regions. In addition, many companies are forming strategic and collaborative initiatives with multiple companies to increase their market share and profitability. Some of the recent developments in the market are:

November 2020 - New 3Corações Cappuccino Package has been launched Using Aptar’s BAP Technology. The new package, featuring a welded-on closure and pull ring, offers convenience and functionality for food packaging. Further, Aptar has bought to Brazil a highly advanced technology that offers convenience and functionality for food packaging: Bonded Aluminum to Plastic, or BAP. This new technology in Brazil will be featured on the new national favorite Cappuccino 3Corações. For the development of this new package, Aptar and 3Corações surveyed cappuccino consumers. They identified three main focus areas regarding the consumption experience: a tight seal between the closure and bottle, ease of opening and closing, and a wide opening for easy access to the content.

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Assessment of COVID-19 Impact on the Industry
5.1 Market Drivers
5.1.1 Rising Demand for Smaller-sized Packs
5.2 Market Restraints
5.2.1 Lightweight and Cost-effective Stand-up Pouch Packaging Alternatives
6.1 By Material
6.1.1 PET
6.1.2 PP
6.1.3 LDPE and HDPE
6.1.4 Other Materials
6.2 By End-user Industry
6.2.1 Beverage (Bottled Water, Beer, Dairy, RTD, Wine, Spirits, etc.)
6.2.2 Food
6.2.3 Pharmaceutical and Healthcare
6.2.4 Cosmetics and Toiletries
6.2.5 Household Chemicals (Detergents, Cleaners, Soaps, and Polishes)
6.2.6 Other End-user Industries (Automotive Cleaners, Paints and Coatings, Chemicals, etc.)
6.3 By Country
6.3.1 Brazil
6.3.2 Mexico
6.3.3 Argentina
6.3.4 Columbia
6.3.5 Chile
6.3.6 Peru
6.3.7 Others
7.1 Company Profiles
7.1.1 Silgan Holdings Inc.
7.1.2 Albéa Reynosa
7.1.3 Guala Closures Mexico SA DE CV
7.1.4 Bericap
7.1.5 AptarGroup Inc.
7.1.6 Amcor Ltd
7.1.7 Crown Holdings Inc.
7.1.8 Closure Systems International Inc.
7.1.9 Berry Global Inc.

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Silgan Holdings Inc.
  • Albéa Reynosa
  • Guala Closures Mexico SA DE CV
  • Bericap
  • AptarGroup Inc.
  • Amcor Ltd
  • Crown Holdings Inc.
  • Closure Systems International Inc.
  • Berry Global Inc.