The Ministry for the Environment (Manatu Mo Te Taiao) has continued to place pressure on New Zealand’s Polymer Product manufacturing sector over the past five years, due to concerns around environmental issues and the ban on single-use plastic bags. In June 2021, the Ministry of the Environment announced that it would phase out problem plastics and six additional single-use plastics over the five years through July 2025. This announcement is forecast to affect the Polymer Film and Sheet Packaging Material Manufacturing and Rigid and Semi-Rigid Polymer Product Manufacturing industries.
Plastic bags and packaging film
The Polymer Film and Sheet Packaging Material Manufacturing industry has faced tough operating conditions over the past five years. The New Zealand Government’s (Te Kawanatanga O Aotearoa) ban on single-use plastic bags in July 2019 significantly changed the product landscape for the industry. The ban included shopping bags that are under 70 microns in thickness and degradable plastic bags. Consequently, plastic bags only account for 17.5% of industry revenue in 2021-22, with the majority of revenue coming from reusable plastic bags and barrier bags used to store meats, fish, fruit and vegetables. Overall, the Polymer Film and Sheet Packaging Material Manufacturing industry has declined at an annualised 4.8% over the five years through 2021-22, to $580.0 million.
Polymer Film and Sheet Packaging Material Manufacturing industry revenue is projected to increase at an annualised 1.4% over the five years through 2026-27, to $621.9 million. This marginal increase in industry revenue will likely stem from improving demand conditions as downstream industries recover from the effects of the COVID-19 pandemic, along with rising domestic plastic prices as industry operators shift to more sustainable plastic products. However, the government’s announcement that New Zealand will phase out problem plastics and six single-use plastics by July 2025 is expected to place further pressure on the industry. PVC meat trays, polystyrene takeaway packaging, EPS grocery packaging and other degradable plastic products are projected to be phased out by late-2022, while all other PVC and polystyrene food and beverage packaging products are forecast to be phased out by mid-2025.
Other problem plastics
The continued phasing out of single-use and problem plastics are also expected to impact the Rigid and Semi-Rigid Product Manufacturing industry over the next five years. By mid-2023, the Ministry for the Environment forecasts plastic tableware products, which includes plates, bowls and cutlery to be phased out. This move is forecast to affect the industry’s plastic kitchenware product segment, which currently accounts for 23.3% of industry revenue. Consequently, industry revenue is forecast to decline at an annualised 0.2% over the five years through 2026-27, to $1.16 billion.
In June 2021, The Ministry for the Environment also announced a $50 million Plastic Innovation Fund to help manufacturers pivot away from problem plastics and single-use plastic products. This fund is forecast to support both the Polymer Film and Sheet Packaging Material Manufacturing and Rigid and Semi-Rigid Product Manufacturing industries over the next five years. Funding will be available to polymer manufacturers that want to:
- Redesign plastic packaging to reduce plastic waste
- Develop and ramp up reusable plastic solutions or logistics
- Switch to materials that are recoverable
- Develop new recycling solutions for plastics that are not currently recyclable in New Zealand
- Adopt or develop technology to increase the value of recyclable plastics
IBISWorld reports mentioned in this release:
