France Elections and Its Impact on European Masterbatch Industry

May, 2017 : The ongoing Presidential elections in France, which are primarily revolving around Frexit (the potential exit of France from the EU), are slated to have an enormous impact on the economic and business environment in the EU as well as the Euro.

 Notably, France is the largest country in the EU, contributing almost 15% of the overall EU GDP in 2015.

In particular, the masterbatch industry of Europe would likely bear the conseque­nces of changes in France’s relationship with (and role within) the EU. In 2016, the country produced around 4.66 million metric tons of plastic materials and ranked among the top 5 plastic producing nations in the overall European plastic materials production.

Presence of production facilities controlled by global masterbatch manufacturing players, such as A. Schulman and Polyone Corporation in major cities of France including, Givet, Cergy and Tossiat has been pivotal for the growth of masterbatch market in EU. Implementation of Frexit may result in introduction of incumbent trade barriers for masterbatch manufacturers in France, thereby hampering the smooth and flexible trade-relationships with Eastern European countries, and consequently impacting the overall European masterbatch industry.

Over the last five years, France controlled a sizeable share in the overall Europe masterbatch market, controlling a market share to the tune of 11-12 percent during this period. Establishment of new trade barriers within Europe is forecast to hinder the growth of masterbatch industry in Europe over the next five years. However, if the new ruling party in France agrees to remain a part of EU, France would consolidate its position as a leading market for masterbatch in the European market.

According to the recently published report by TechSci Research, “Europe Masterbatch Market By Type, By End User, By Country, Competition Forecast and Opportunities, 2011 - 2021”, the masterbatch market in Europe is projected to cross US$6.3 billion by 2021. Increasing per capita plastic consumption, growing packaging industry and rising demand from plastic and polymer manufacturers are the major factors anticipated to boost demand for masterbatch in Europe. In 2016, white masterbatch accounted for the largest share in the region’s masterbatch market owing to their ability to provide opacity to the base polymer. This trend is expected to continue over the next five years as well. Packaging industry is expected to remain the largest demand generator for masterbatch market in Europe, followed by construction and automotive sectors.