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News flash: OPP manufacturing plant closures a sign of things to come

Jindal is one the World’s leading suppliers of OPP. Their growth has been fuelled by acquisitions both in Europe & America.

In November last year they closed the Battipaglia OPP plant in southern Italy which came with the Treofan acquisition. This plant had a production capacity of up to 50,000 tonnes. They recently announced the closure of a second ex Treofan site in Belgium with a plated output of 30,000 tonnes.

It is suggested that they are now negotiating to close the Terni OPP site in southern Italy, once the “flagship site” of Treofan, again with a capacity of circa 50,000 tonnes.

The rationalisation of OPP manufacturing in Europe reflects the scale of investment in alternative OPP manufacturing sites further afield, particularly in the Middle East, Turkey and Eastern Europe. However, the older European sites focussed much of their production on specialist OPP whilst the majority of production from the newer plants are commodity grades. Therefore it is likely that these closures could affect future pricing and availability of specialist OPP films.

Interestingly, the consolidation trends in film manufacturers are reflecting a similar set of circumstances in the packaging film conversion industry. Mondi’s closure of the Wheatley plant in Lincolnshire is simply the latest development in a trend that sees the big companies getting bigger as the independents are acquired and rationalised. As a consequence larger film converting plants are being developed.

Right now, we know of another printed film site being planned for closure this year with no doubt more to follow. Whether this is good thing for the Industry as a whole I have my doubts.

It is probable manufacturing costs will be driven down and overheads reduced, no doubt leading to even lower prices for film to the multi-national and suppliers to the large supermarkets. But in our experience the larger manufacturing base the lower the service element. Eventually the production “tail” wags the sales dog.

We shall see.

#DontHatePlastic

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