Plastic Contract Manufacturing Market - Forecast(2024 - 2030)

Plastic Contract Manufacturing Market Overview

The global plastic contract manufacturing market size is forecast to reach US$42.3 billion by 2027 after growing at a CAGR of 4.8% during 2022-2027. Polypropylene is anticipated to witness maximum demand in the target market owing to its superior properties such as impact resistance, sterilization, low production costs, etc. It is widely used in medical, consumer goods, automotive, and many other sectors. Other materials like polystyrene, acrylonitrile butadiene styrene, and polyvinyl chloride will witness significant demand in the plastic contract manufacturing market in the coming years. Injection moulding is poised to witness the highest demand in the plastic contract manufacturing market in the forecast period as it is the most popular process for producing different parts. The medical sector is projected to drive the growth of the plastic contract manufacturing market in the forecast period owing to the high demand for medical devices and equipment. Complexity in the manufacturing of medical devices is increasing the demand for plastic contract manufacturing solutions. However, amid all these positive trends, the regulations related to the use of plastics might affect the growth of the plastic contract manufacturing market in the forecast period.

COVID-19 Impact 

The COVID-19 pandemic affected the plastic contract manufacturing market significantly. There were disruptions in the plastic contract manufacturing ecosystem such as supply chain break, shortage of workers, procurement of raw material, etc. However, the sector was able to back on track much faster due to high demand from the medical sector. Many manufacturers and suppliers in the target market kept their operations running during the pandemic to meet the requirements of the medical industry. For instance, RSP Inc., which is a market leader in contract manufacturing and plastic injection moulding services, kept its US headquarter opened throughout the COVID-19 pandemic. The company’s quick response to the pandemic and its established emergency operation statistics allowed it to regulate the supply chain and provide uninterrupted service to the clients. Going forward, the plastic contract manufacturing market will witness robust growth due to increasing demand from the healthcare sector.

Report Coverage

The report: “Plastic Contract Manufacturing Market Forecast (2022 -2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Plastic Contract Manufacturing Industry. 

By Type: Polypropylene, Polyethylene, Polystyrene, Acrylonitrile Butadiene Styrene (ABS), Polyoxymethylene, Polyamide, Polyvinyl Chloride, Polyethylene Terephthalate, Others.
By Process: Injection Moulding, CNC Machining, 3D Printing, Others.
By Application: Automotive, Medical, Aerospace and Defence, Consumer Goods and Appliances, Chemical Instrumentation, Telecommunications, Cosmetic Packaging, Electrical/Electronic Applications, Others.
By Geography: North America (USA, Canada, Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, Rest of Europe), Asia Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, Rest of Asia Pacific), South America (Brazil, Argentina, Colombia and Rest of South America), and RoW (Middle East and Africa).

Key Takeaways:

• Polypropylene is leading the plastic contract manufacturing market owing to its superior properties. This material possesses properties such as low density, chemical resistance, low production costs, etc., which makes it a desirable choice among manufacturers.
  
• Medical application is poised to drive the market’s growth in the forecast period owing to the rapid expansion of the home healthcare market, ultimately increasing higher demand for medical devices. According to the US Bureau of Labor Statistics, employment in home healthcare aides is expected to witness a growth of 33% from 2020 to 2030.
• The Asia Pacific region is dominating the plastic contract manufacturing market. This region holds the top position in plastic manufacturing globally with China being the major player. According to April 2021 report by Heinrich-Böll-Stiftung (hbs) organization, Asia-Pacific is the world’s largest plastic production region in the world.

Figure: Asia Pacific Plastic Contract Manufacturing Market Revenue, 2021-2027 (US$ Billion)

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Plastic Contract Manufacturing Market - By Type 

Polypropylene dominated the plastic contract manufacturing market in 2021 and is growing at a CAGR of 4.7% during the forecast period. This material type is a popular name among manufacturers and suppliers owing to its excellent properties such as impact resistance, high tensile strength, sterilization, low density, etc. Polypropylene is one of the widely used materials in the production of components and parts used in sectors like medical, consumer goods, and automotive. The low production cost of polypropylene makes it a desirable choice among manufacturers as it helps in achieving cost-effective manufacturing of different plastic components. It is also one of the commonly used materials in the plastic injection moulding process globally. Many research and development are still carried implementing polypropylene to make effective production of components. For instance, according to the May 2021 journal by Research Square, polypropylene was used in the manufacturing of plastic spur gear through the injection moulding process. Polypropylene was selected owing to its superior qualities like high tensile strength, excellent chemical inertness, low density, and superior fatigue life. Such high demand for polypropylene will contribute to the plastic contract manufacturing market’s growth in the forecast period. Other material types like polystyrene, acrylonitrile butadiene styrene, and polyvinyl chloride will witness significant demand among plastic contract manufacturers in the forecast period.

Plastic Contract Manufacturing Market - By Process

The injection moulding process dominated the plastic contract manufacturing market in 2021. The demand for the injection moulding process is on the rise in the target market for the last few years. It’s a versatile process for manufacturing various plastic components and parts. This process is widely used by manufacturers owing to its excellent qualities like the ability to design complex parts, high efficiency, enhanced strength, low labor costs, the flexibility of choosing different materials, etc. Manufacturers in the target market are focusing more on the usage of injection moulding to craft high-quality products. For instance, in January 2020, US-based contract manufacturing company Tessy Plastics Corp. announced the expansion of warehouse space in one of its manufacturing plants. This expansion project received an investment of $20 million and involves eight injection moulding machines to produce different parts and components. Such high investment and growing demand for injection moulding processes among manufacturers will contribute to the plastic contract manufacturing market’s growth in the forecast period. 

Plastic Contract Manufacturing Market - By Application

The medical sector dominated the plastic contract manufacturing market in 2021 and is growing at a CAGR of 5% in the forecast period. The rapid expansion in the health care sector such as the rising home health care market is contributing to the market’s growth. The healthcare sector witnessed a massive shift in home health care services during the pandemic. This trend is expected to be there in the forecast period owing to the safety and cost-effective aspects of home health care compared to hospital care. Accordingly, many healthcare bodies updated the home healthcare service systems. For instance, in January 2021, the Centers for Medicare & Medicaid Services (CMS) in the US announced the plan of expanding the Home Health Value-Based Purchasing (HHVBP) model which will help in improving home health care for seniors. Through this model, elderly people can have access to robust service options other than hospitals and nursing homes. Such growth in the home healthcare segment will increase the usage of medical devices, thereby stimulating the production of numerous medical device parts. The high requirement of medical device parts manufacturing will incorporate plastic contract manufacturing services which will drive the market’s growth in the forecast period. 

Plastic Contract Manufacturing Market - By Geography

The Asia-Pacific region held the largest market share in 2021 with up to 30%. This region is the largest manufacturer and consumer of plastics in the world with China being the major player. According to the September 2019 report by the French Institute of International Relations organization, China was the largest producer of plastics with a market share of 30% of plastic production globally. Furthermore, the abundant availability of raw materials, high domestic demand, increasing automotive sector are some of the other key factors influencing the Asia-Pacific region’s plastic contract manufacturing sector. Plastic components are widely used in various automotive parts. With the rising automotive sector in the region due to increasing disposable income and changing lifestyle of consumers, the demand for plastic contract manufacturing solutions will also increase in the region. As per the 2020 data by Autohome, the car business in China is expanding as customers are more willing to spend on cars. Such growth in the automotive sector will demand higher manufacturing of automotive parts, ultimately driving the plastic contract manufacturing market in the forecast period. Apart from Asia-Pacific, the North American region is expected to dominate the target market in the forecast period owing to massive development in the region’s healthcare sector. 

Plastic Contract Manufacturing Market Drivers

Expanding medical sector will drive the market’s growth

The healthcare sector has always been a massive contributor to the plastic contract manufacturing market and with the arrival of the global pandemic, this sector is poised to propel the growth of the target market rapidly in the forecast period. Manufacturing of medical devices requires plastic contract manufacturing solutions and the expanding medical devices sector will spur the market’s growth. For instance, according to the data by India Brand Equity Foundation (IBEF), the Indian medical devices market which accounted for US$11 billion in 2020 is projected to become a US$ 65 billion market in 2024. Furthermore, FDI received in the medical and surgical appliances sector between April 2000 to March 2021 was valued at US$ 2.19 billion. Such high investment in the medical devices sector will increase the production of plastic components which will ultimately contribute to the plastic contract manufacturing market’s growth in the forecast period. 

Rising automobile sector will drive the market

The expanding automobile sector globally will drive the plastic contract manufacturing market’s growth in the forecast period. Multiple plastic automobile parts are manufactured with the help of plastic contract manufacturing solutions. Injection moulding is the most widely used manufacturing process for producing plastic automotive parts with a high-quality finish. The growing automotive sector globally will require higher numbers of plastic auto components. For instance, as per the August 2020 data by the China Association of Automobile Manufacturers (CAAM), the Chinese automotive sector will stay on a progressive track in the coming years and the new energy vehicle (NEVs) segment is projected to witness maximum demand. Similarly, as per the data by India Brand Equity Foundation (IBEF), the Indian auto-components sector witnessed significant growth in the last few years. The sector grew with a CAGR of 6% during 2016-2020 and was valued at US$ 49.3 billion in 2020. Such massive growth in the automotive industry will demand higher plastic contract manufacturing solutions, ultimately driving the market’s growth in the forecast period. 

Plastic Contract Manufacturing Market Challenges 

Strict regulations regarding plastic use might affect the market’s growth 

Plastic and its recycling have been a decade-long challenge for every industry and government across the globe. Plastic is widely used in many industries owing to its several properties like durability, lightweight, low production costs, diversity in density, etc. However, its severe harmful environmental effects such as the emission of greenhouse gases forced governments and environmental bodies to implement regulations regarding the usage of plastic and to reduce plastic wastes. For instance, in 2019, the European Union passed a law to ban single-use plastic and reduce plastic wastes by 2021 in the European region. Furthermore, as per June 2020 report by United Nations Conference on Trade and Development (UNCTAD), 8.3 billion tons of virgin plastic have been produced globally out of which 6.3 billion tons of plastic waste were generated to date. Also, annual plastic production exceeds 300 million tons and if this trend continues, the global plastic production figure will reach 33 billion tonnes. Plastic materials are an integral part of the plastic contract manufacturing market and regulations like this might hinder the market’s growth in the forecast period. 

Plastic Contract Manufacturing Industry Outlook

Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the plastic contract manufacturing market. Major players in the plastic contract manufacturing market are: 

1. Tessy Palstics Corp
2. Inzign Pte Ltd.
3. Mack Moulding
4. Nolato
5. Plastikon Industries, Inc.
6. GW Plastics. Inc.
7. RSP, Inc.
8. EVCO Plastics
9. C&J Industries
10. Others 

Acquisitions/Product Launches 

• In September 2020, Nolato, which deals with contract manufacturing, acquired GW Plastics, a US based plastic injection molding company. This acquisition allows Nolato to strengthen its Medical Solutions business area in the North American continent, ultimately contributing to the plastic contract manufacturing market’s growth in the forecast period.

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