Potentials for manufacturers

The "campaign against plastic bags" will not only test the habits of shoppers, but also poses a challenge to the mass of plastic bag manufacturers in the country.

To date, China has about 60,000 plants engaged in processing plastic bags. The southern Guangdong Province has nearly 10,000 such plants.

Business insiders estimate that with the implementation of the "the campaign against plastic bags," the plastic bag market will shrink by half at least. About half of plastic bag manufacturers, especially small-sized ones that largely produce ultra-thin plastic bags for farm produce fairs and roadside vendors, will close down under the pressure of high raw material costs and a shrunken market.

In January, Henan Huaqiang Plastic Co. Ltd., the country's largest plastic bag maker based in the central Henan Province, shut the business. The factory previously had an annual output of 250,000 tons or 2.2 billion yuan (316.8 million U.S. dollars) in value. About 90 percent of its products were ultra-thin plastic bags.

Industry experts say that "the campaign against plastic bags" does not necessarily mean to restrict the development of the plastic packing industry. Elevating the environment-protection threshold is beneficial to optimize and upgrade the overall industrial structure.

"We have adjusted the policy. If enterprises fail to respond in time to accommodate to new standards, it is natural for them to retreat from the market," said Dong Jinshi of the China Packing Association.

He estimates that plastic bags will remain to account for about 80 percent of the shopping bag shares, even with the implementation of the policy. The exit of low-standard plastic shopping bags helps developing and applying new plastic packing materials.

According to a CCID Consulting research report, degradable plastics will be a direction in the development of plastic packing materials. So far, China has listed degradable plastic packing into the sectors for preferential treatment. Degradable plastic packing will be widely used by the agricultural, food, daily cosmetic and medical treatment sectors.

Industry officials say the per capita plastic consumption stands at 100 kg in European countries, 121 kg in Japan and 25 kg in China. As a result, the plastic industry, including the plastic packing business, will have big potential to tap in future.

(Xinhua News Agency May 31, 2008)