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Southeast Asia Propylene Market - Forecast(2023 - 2028)
Southeast Asia Propylene Market Overview
The Southeast Asia Propylene Market size is projected to reach US$19.9 billion by 2027, after growing at a CAGR of 12% during the
forecast period 2022-2027. Propylene is a byproduct of petroleum refining and a
byproduct of ethylene. It is a chemical base that serves as a building block
for more complex chemicals. Propylene is an important material used to make a
wide range of derivatives such as acrylonitrile, acrylic acid, acrylates and
other similar derivatives with high combustion performance. The Southeast Asian
propylene market is majorly driven by the growth of the packaging industry in
the region. Also, rising automotive production in Southeast Asian countries is
driving up demand for polypropylene, propylene oxide and other materials. As a
result, propylene demand is expected to rise, which will drive the growth of
the Southeast Asia Propylene Market size in the upcoming years. However, in
2020, the Covid-19 pandemic negatively impacted the Southeast Asia propylene
industry growth. In 2021, with the ease of regulations, there was an increase
in the imports and exports activities. The production activities related to
packaging, automotive and more surged in Southeast Asia. This benefited Southeast
Asia's propylene industry growth.
Report Coverage
The report: "Southeast
Asia Propylene Market Report–Forecast (2022-2027)” by IndustryARC, covers an
in-depth analysis of the following segments in the Southeast Asia Propylene Market.
By Grade: Refinery, Chemical and Polymer.
By Derivative: Polypropylene, Acrylonitrile, Acrylic Acid, Cumene,
Oxo Alcohols, Methyl Methacrylate, Propylene Glycol, Propylene Oxide and Others.
By End-use Industry: Automotive (Passenger Vehicle (PV), Light
Commercial Vehicle (LCV) and Heavy Commercial Vehicle (HCV)), Building &
Construction (Residential, Commercial and Industrial), Medical and Healthcare
(Pharmaceuticals, Medical Equipment’s and Others), Packaging, Electrical and
Electronics (Wires, Switches and Others), Textile and Others.
By Country: Indonesia, Malaysia, Philippines, Singapore, Thailand,
Vietnam and the Rest of Southeast Asia.
Key Takeaways
- Indonesia dominated the Southeast Asia Propylene Market, owing to the growing packaging industry in the country. For instance, in May 2020, Lamipak, a provider of high-quality packaging products and solutions, has begun building its second factory in Indonesia. The development of this project will be completed by 2024.
- The surging adoption of polypropylene, propylene oxide and other materials in the building and construction activities in Southeast Asia ensure superior durability. This, in turn, is driving the propylene demand, which is leading to market growth.
- Moreover, the expansion of new facilities related to propylene derivatives such as polypropylene, propylene glycol and more in Southeast Asia is creating an opportunity for market growth during the forecast period of 2022-2027.
- However, the Southeast Asian government regulations related to propylene are estimated to restrict the Southeast Asia Propylene industry growth in the upcoming years.
Figure: Indonesia Propylene Market Revenue, 2021-2027 (US$ Billion)
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Southeast Asia Propylene Market Segment Analysis
– By Derivative
The polypropylene segment held
the largest Southeast Asia Propylene Market share in 2021 and is forecasted to
grow at a CAGR of 14% during the forecast period 2022-2027. Propylene has
various beneficial properties, including high density, low melting point and
other similar properties. These properties result in the superior durability of
the derivatives. Thus, due to the high durability of propylene, it is often
employed in polypropylene. The factors such as increasing investments in new
facility development, surging demand from the packaging industry and other
similar factors are accelerating the polypropylene derivatives growth in the
Southeast Asia region. For instance, in March 2019, Phu My Plastics Production
JSC started the production of polypropylene at its new 300 KTA polypropylene
plant in Vietnam. Thus, the Southeast Asian polypropylene manufacturer's
increase in production activities is fueling the demand for propylene. This is
leading to market growth.
Southeast Asia Propylene Market Segment Analysis – By End-Use Industry
The packaging segment held the
largest Southeast Asia Propylene Market share in 2021 and is forecasted to grow
at a CAGR of 17% during the forecast period 2022-2027. Propylene is used in the
production of a variety of derivatives, including polypropylene, acrylonitrile,
acrylic acid and others, to ensure superior base building and longer shelf
life. Thus, making them an ideal choice for the packaging industry. The expanding
food and beverage industry, surging demand from the automotive industry and
more are key determinants driving the packaging industry growth in Southeast
Asia. For instance, in April 2022, HMC Polymers completed the fourth
polypropylene plant at its Map Ta Phut site in Rayong Province, Thailand. The
new plant will supply polypropylene to Thai packaging industry clients. Hence,
the growth of the packaging industry in Southeast Asia is fueling the demand
for polypropylene, acrylonitrile, acrylic acid and others. As a result, demand
for propylene is increasing and the market is expanding.
Southeast Asia Propylene Market Segment Analysis – By Geography
Indonesia is the dominating country as it held the largest Southeast Asia Propylene Market share in 2021 up to 32%. Indonesia has the largest economy in Southeast Asia and is one of the emerging market economies. The expansion of packaging, building & construction and other industries is fueling Indonesia's industrial expansion. The expansion of the food and beverage industry in Indonesia is driving the packaging industry growth in the country. For instance, according to the Indonesian Packaging Federation (IPF), in 2018, the Indonesian packaging industry was valued at US$7.74 billion and in 2021, it was US$9.60 billion, an increase of 24%. Additionally, the federation also states that the packaging industry growth in Indonesia has grown by an Average Annual Growth Rate of 8% during the forecast period of 2014-2020. Furthermore, Indonesia's packaging industries are growing alongside its applied industries, with the food and beverage industry accounting for nearly 70% of total packaging supplies in 2021. The packaging industry will continue to grow in the future, as demand for higher-quality packaging increases. Therefore, the growth of the packaging industry is fueling the demand for propylene derivatives. This, in turn, is propelling the Southeast Asia Propylene Market size growth.
Southeast Asia Propylene Market Drivers
Bolstering Southeast Asian Automotive Industry
The automotive industry primarily uses propylene derivatives such as polypropylene, cumene and others for various interior and exterior applications such as dashboards, bumpers, passenger compartment trims and door trims. Its high impact resistance, durability, flexibility and higher strength, as well as its resistance to heat and chemicals, make it ideal for use in such automotive applications. The factors such as increasing disposable income, rapid industrialization and more are driving the automotive industry growth in Southeast Asia. For instance, Organisation Internationale des Constructeurs d'Automobiles (OICA), in 2020, the automotive production in Thailand was 1,427,074 units and in 2021, it was 1,685,705, an increase of 18%. Additionally, in 2020, the automotive production in Phillepines was 67,297 units and in 2021, it was 83,852, an increase of 25%. Thus, the bolstering automotive industry in Southeast Asia is boosting the demand for propylene derivatives, thereby, driving the market growth.
Expanding Propylene Glycol Manufacturing Facilities in Southeast Asia
Propylene is employed in the manufacturing of propylene glycol to provide a superior chemical base and durability to propylene glycol. The surging demand for propylene glycol from various Southeast Asian end-use industries such as construction, automotive and more are fueling the propylene glycol industry growth. Thus, international propylene glycol manufacturers are adopting new facility development strategies to expand their market base in the Southeast Asia region. For instance, in July 2022, Dow, the world's leading materials science company, announced its plans to expand its propylene glycol (PG) capacity at its existing Map Ta Phut Operations facility in Rayong, Thailand. This high-return, incremental investment supports growing demand and strengthens Dow's leadership positions in attractive flavor and fragrance, personal care, food and pharmaceutical markets that are growing faster than GDP. Hence, the new facility development related to propylene glycol is fueling the Southeast Asia Propylene Market growth.
Southeast Asia Propylene Market Challenge
Southeast Asian Government Regulations Related to Propylene
Propylene has superior properties such as a strong base, high density and more, which results in increasing the shelf life of the derivatives such as polypropylene, cumene and others. However, on the flip side, the regulations related to the dumping of propylene and its derivatives are limiting Southeast Asia's market growth. For instance, in July 2020, anti-dumping duties were imposed on a variety of plastic products and plastic products made from polymers and propylene (also known as biaxially oriented polypropylene – BOPP) imported into Vietnam from China, Thailand and Malaysia. As a result, the official anti-dumping duty rate on BOPP film, which is used in the food packaging industry, will range from 9.05 percent to 23.71 percent. Thus, such regulations are creating a roadblock for Southeast Asia's propylene market growth.
Southeast Asia Propylene Industry Outlook
Technology launches, acquisitions and increased R&D activities are key strategies adopted by players in the Southeast Asia Propylene Market. The top 10 companies in the Southeast Asia Propylene Market are:
- HMC Polymers Co. Ltd.
- IRPC Public Company Limited
- Petrochemical Corporation of Singapore (Private) Limited
- Petroliam Nasional Berhad (Petronas)
- PT Chandra Asri Petrochemical Tbk Filtro PTE. Ltd.
- DELTA EXPORTS PTE LTD.
- HANTON TRADING PTE. LTD.
- BRISYNERGY PTE. LTD.
- PERFECT POTION PTE. LTD.
- Phu My Plastics Production JSC
Recent Development
- In March 2019, Phu My Plastics Production JSC, headquartered in Vietnam used Honeywell UOP's C3 OleflexTM technology to produce polymer-grade propylene at its Vietnam facility. The plant will help Vietnam and other Southeast Asian countries meet the growing domestic demand for propylene.
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