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Latest TMR Report Explores Impact of COVID-19 Outbreak on MDO Films Market 2030

One of the key concerns of a packaging producer is to significantly reduce packaging costs by replacing less desirable materials, eliminating the secondary process of conversion and downgauging. Achieving this effectively can help producers make accelerate gains on type of materials used and cost incurred on various steps of processing.

Machine direction orientation or MDO is known to considerably change the physical properties of polymer films, enhancing their mechanical and barrier strength alike. Using MDO processing to improve mechanical properties of films also enables downgauging them without compromising on their intrinsic properties.

Cost reduction is of key importance especially in heavy duty shipping sacks. Transparency Market Research (TMR) in its recent study has outlined the prospects for the MDO films market at a time when the global economy is at the cusp of a major transformation.

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According to the report, the global MDO Films market is forecast to rise at a CAGR of 4.8% between 2020 and 2026. MDO films are recently witnessing diverse scopes for application. TMR finds the demand for packaging of healthcare products to be a lucrative sector. Owing to their high barrier properties and flawless print finish for a plethora of packages, MDO films sales uptick is forecast.

Demand from Convenient Packaging in Food Sector Stoking Growth

Food sector has emerged as a highly attractive segment, accounting for a significant percentage of sales proceeds. Consumers’ inclination for convenient food has in turn made them seek convenient packaging, which includes features such as easy-to-open and are re-sealable.

The demand for customization also is at all-time high as consumers across cities and high potential markets are seemingly inclined towards ready-to-cook packaging. Their changing preference is expected to have a considerable impact on the market. The rising demand for on-the-go consumption, attributable to time constraints, is viewed as opportunity in the making for MDO films producers.

MDO films have enhanced mechanical, barrier, and optical properties, which make them ideal packaging solutions for the food sector. With dealers augmenting their portfolio as a result of solid focus on convenience for consumers, the market can expect the sales to steadily pick up over the course of the forecast tenure.

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Rising Demand for Higher Shelf-Life Creating Scope for Expansion

In tandem with consumers’ needs, an increasing number of manufacturers are developing MDO films that offer robust seal performance. These films address a wide range of packaging needs besides exhibiting superior sealing functionality. These properties offer longer shelf-life to food packed inside.

A key point to note here is that a small increase in shelf life, especially in meat products, is a valuable proposition offered by the manufacturers. This also helps them in expanding their footprint.

MDO films producers often contribute towards extending shelf life of various products by offering improvements such as modified packaging, vacuum, and atmosphere and implementing novel packaging formats. As a result of similar efforts, the market today is witnessing increasing demand for diverse applications within the food sector.

For instance, these films are used in the packaging of various products such as confectioneries and bakeries, ready-to-eat and frozen foods, fruits and vegetables, and others. Sales uptick witnessed in the market also it attributable to the expansion of large retail chains in developed and high potential markets alike.

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MDO Films Have Impressive Prospects but Not Without Challenges

Producers of MDO films are still discovering novel market opportunities. However, some of the existing technical difficulties are withholding even a few big projects from coming of age. However, advent of new equipment could make the journey easier.

Despite all the aforementioned benefits, there isn’t enough supply of MDO film products in the market. According to experts, several types of MDO films besides a few relatively simpler ones such as monolayer stretch films are quite difficult to get right.

For instance, MDO films can be used to enhance barrier properties in EVOH and nylon, but it can also make them brittle. To mitigate these concerns, market players are looking at novel technologies and equipment to improve the flexibility of MDO films. In the past few years, a small but significant change is witnessed in the market in this regard.

Innovation of novel technologies to improve flexibility is also enabling growth in the market. According to TMR, similar improvements will help the MDO films market surpass US$5.02 Bn by 2026.

COVID-19 Outbreak Might Shrink Sales

The market is expected to undergo a period of decline owing to the COVID-19 outbreak in 2020. Disruption of growth witnessed in food and food service businesses in response to extended lockdown orders will hamper growth in the MDO films market as well.

Against the backdrop of ongoing pandemic, governments are compelled to implement stringent regulations curbing free movement and transport in countries worst hit by the virus. This has been creating supply chain disruptions for several markets. MDO films producers are not immune to the suddenness of the change.

Several companies had to pause their operations to obey government decisions, which has significantly affected their growth trajectory. Besides this disruption in product management and distribution network and constantly changing financial conditions and tariffs in many countries may hamper the growth of the market to an extent.

Entry of New Players to Make Competition Fiercer

According to TMR, the MDO films market is expected to get more competitive owing to the entry of local players. In order to gain competitive advantage, companies are primarily focusing on research and development and innovations.

Companies are constantly aiming at bettering their products. For instance, with the launch of the Global MDO Next Generation films, Avery Dennison is able to achieve a significant improvement in clarity to offer no-label look.

To study the competition prevailing in the global market, TMR profiles them as Tier 1, Tier 2, and Tier 3 companies. Tier 1 comprises established market players such as Klöckner Pentaplast Group, CCL Industries Inc., Borealis AG and Toray Plastics (America), Inc. Tier 2 includes companies such as Futamura Chemical Co. Ltd, Davis-Standard, LLC, and UPM Raflatac Inc. Finally, Tier 3 is consists of Lenzing Plastics GmbH & Co KG, NOWOFOL Kunststoffprodukte GmbH & Co. KG, Polythene UK Ltd., Trico Specialty Films LLC and many others.

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