World demand for caps and closures is projected to rise 4.6% pa to US$40 bln in 2014, as per Freedonia. Advances will be stimulated by growth in global manufacturing output (which will boost packaging requirements), urbanization trends and a shift in the product mix toward higher value closures, such as tamper-evident and dispensing types. Some of the best opportunities for caps and closures will be found in the Asia/Pacific region, which will account for more than two-fifths of aggregate market value gains between 2009 and 2014. While the US is by far the world’s biggest consumer of caps and closures in value terms (accounting for close to 25% of global demand in 2009), the most rapid advances will occur in developing regions. Growth in Asia, the Africa/Mideast region, Central and South America and Eastern Europe will outpace the global average. Industrialization trends and increases in standards of living will fuel demand for caps and closures in the generally underdeveloped end-user manufacturing industries (e.g., food and beverage processing, pharmaceuticals, and cosmetics and toiletries) of these regions. China, which is the world’s largest consumer of caps and closures in volume terms, will continue to see some of the fastest growth. Through the forecast period, gains in personal income levels and consumer expenditures, combined with urbanization trends, will boost demand for packaged consumer goods. These factors will fuel cap and closure requirements in China, as will increased exports of Chinese goods to more advanced consumer economies (creating the need for higher-quality packaging that meets international standards). India will also see rapid increases in cap and closure demand through 2014, but gains will stem from a much smaller base. Plastic caps and closures, the largest product type, will continue to see above average growth. Demand will benefit from greater use of plastic packaging at the expense of glass bottles and jars (especially in food and beverage applications), as plastic containers typically use plastic caps and closures, while glass bottles and jars often use metal closures. In addition, rising packaging standards in developing regions, due to higher consumer requirements in both local and export markets, will boost demand for value-added plastic caps and closures, such as those offering tamper-evidence, child-resistance, convenience and ease of- dispensing features. Beverages will remain the main consumers of caps and closures, but more rapid gains are expected in smaller markets such as food and pharmaceuticals. While cap and closure demand in the bottled water segment saw double-digit annual growth over the 1999-2009 period, advances will decelerate considerably, in large part due to environmental concerns. Cap and closure demand in the food market will benefit from trends toward convenience-oriented packaged food. This will especially boost demand for plastic closures, including dispensing types. However, competition from flexible packaging, such as pouches (which are generally closure-less), will prevent faster gains. Given the growth in blow-molded bottles, it is not surprising to see plastic closures as an area of strong growth within the rigid plastics packaging market. With output of over 220 billion units/year, production had been growing at a rate of nearly 6% per year prior to the recession, with the use of HDPE one-piece closures growing at a rate three percentage points above this, as per Applied Market Information (AMI). It is estimated that plastic caps and closures now have a market penetration of over 50% of the total closures market in Europe, exceeding metal closures in terms of unit demand. Again, as in bottles, the drivers are cost reduction and lightweighting, which is encouraging the use of one-piece closures in preference to two-piece closures. While standardized one-piece and two-piece beverage closures are the bedrock of the closures business, custom closures represent an even greater opportunity to molders in terms of added value. They include products such as nonstandard-diameter flat caps, sports caps, carton mechanisms, and pouch spouts. Growth in this sector of the market is driven by strong demand for sports closures and also by the further development of 38 mm caps and carton mechanisms. Beverages account for around two-thirds of plastic closures in Europe, in a business driven by developments in still drinks (e.g. sports drinks, juice-based drinks) and the growing penetration of one-way PET bottles replacing cans and cartons. Demand for plastic beer closures is also expected to develop in Europe, fueled by growing demand for PET bottles in Eastern Europe. Within non beverage applications, liquid food is the largest sector of the plastic caps and closures market in Europe. In this segment, demand will be driven by increased penetration of PET bottles in dairy applications, and by growing substitution of glass packaging by plastic containers in tabletop sauces, preserves, baby food, cooking sauces and dehydrated and snack products. The development of heat-stable PET barrier containers is opening new markets to plastic closures, such as juices, preserves, pickles, cooking sauces, soups and baby food, which are traditionally packed in glass containers and sealed with steel vacuum closures. Further opportunities lie in cold-fill applications such as honey. There will be an increasingly apparent geographical divergence in strategy in Europe. In Eastern Europe, investment will focus on mass production of standard beverage closures to serve the global brands as they move eastwards, while market maturity will steer Western Europe toward de-standardization through developments in custom 38-mm closures, sports caps and high-performance, lightweight caps for carbonated drinks. Innovation and a sustainable differential advantage will lie at the center of strategies over the next five years, focused on improved functionality, convenience and modernity. Consolidation in this sector is even greater than in blow molding, with the top 10 manufacturers accounting for around 60% of polymer usage for closures. The industry is expected to concentrate further in the future as a result of consolidation among the brand owners; the higher levels of R&D and technical expertise required in plastic closure development; the requirement for quality standardization on a pan-European if not global basis; and growing competition from closure manufacturers outside EU-27. AMI’s research suggest that the sector could lose up to 150 companies over the next five years in an industry that currently involves as many as 500 manufacturers across Europe. As per Frost & Sullivan, while safety regulations imposed on chemical containers is hiking the uptake of child resistant closures, the user friendliness of closures is spawning the use of dispensing closures in food and condiment related applications. The expanding use of closures in these two application sectors is buoying the overall plastic caps and closures market. The escalating incidence of epidemics such as H1N1 has prompted the greater use of personal care and household cleaning products as well as pharmaceuticals, which, in turn, has ramped up the demand for PC, HIC, and pharmaceutical closures. The research finds that the market earned revenues of US$3.7 bln in 2009 and estimates this to reach US$4.26 bln in 2016. The shift from institutional to grocery store market for food products and condiments will bode well for the plastic caps and closure market. Similarly, product development for hot-fill applications will result in replacement of metal caps with plastic closures. With the rising heat levels leading to higher consumption of bottled water, closures used for bottled water applications have started accounting for the maximum volume in terms of unit closures. Until ten years ago, the carbonated soft drink (CSD) market had been the leading consumer of plastic closures in North America. However, with the American population becoming increasingly health conscious and preferring water, flavored drinks and juices to CSDs, there has been a significant drop in the demand for CSD plastic caps and closures. The manufacturers of CSD closures should shift their focus to new geographical areas, with the saturation of the North American market. Mexicans are currently consuming large volumes of CSDs and thus, creating huge potential for CSD closures in this country. Existing manufacturers in the United States and Canada could look at this region to compensate for the inadequate demand for CSD closures in their nations. On a regional basis, Asia already accounts for the largest share of total annual closure volumes at 36%, equivalent to around 375 billion units, as per a report by Canadean. Collectively, the Americas combine for just under 400 billion, Europe for around 250 billion, the rest of the world around one tenth of that. Not only is Asia already the largest market for closure sales, but it is also the fastest growing, with the annual growth rate for the period 2003 to 2015 put at above 7% - double the global average. The mature markets of North America and West Europe have eked out growth, the former adding around 1percent per year to annual volumes, the latter only 0.2 percent to 2010, as demand, particularly for bottled water, has decelerated. North America is expected to contract to the CAGR achieved in West Europe (0.2%), while a modest upturn in annual volume growth will be evident in West Europe, even if far from spectacular at 0.8% in the years to 2015. Latin America, Eastern Europe and the rest of the world will see solid growth in the region of 3% per year, but in each case this will represent a decline on average annual advances posted in the year to 2010. Of the 1055 bln beverage closures sold in 2010, 58% were for soft drinks, 31% for beer and just 11% for dairy drinks. In each sector, a significant proportion of product is sold without a closure - in soft drinks and beer, on-trade dispense plays an important role and in dairy, sachets and the informal milk are prominent in the developing world. In terms of closures demand, each sector has exhibited positive overall growth in the period 2003 to 2010 and is expected to continue to do so going forward, beer at the same rate, a CAGR of 2.7%, dairy at a slightly reduced average - 4.1% pa against 4.7% in the years to 2010 - and soft drinks at a slightly enhanced rate - 4.1% against 3.9%. While it is difficult to generalise at the macro level because of regional and even national distinctions, for each sector the factors underpinning these trends are different. In milk, a conversion of pouch to carton and plastic bottle has an impact in creating a shift to larger sizes, in soft drinks a continuing desire for greater convenience will see more smaller packs appear, whilst in beer the bottle and can size expectations are well understood by consumers - 330 ml, 500 ml, 660 ml being the most common - and changes to closure demand may be more associated with conversion between pack types than changes in the pack sizes offered to consumers. Synthetic wine corks, spray pumps, caps for deodorant rollers, caps for tubes, and other closures are typically only small parts, but are altogether a noticeable growth market.: More than 200 bln plastic closures were sold throughout Europe in the past year, 60 bln more than at the start of the decade. Ceresana Research expects to see continuous growth at an average rate of 2.3% pa until 2017. Revenue from plastic closures in Europe will consequently increase from Euro 1.7 bln to more than Euro 2 bln per year. Manufacturers of caps and closures, as well as producers of the corresponding machines and suppliers of plastics and additives will primarily profit from an increased use of plastic packaging for foods and drinks. Polypropylene and polyethylene are being used increasingly for closures. Significant growth can especially be seen in certain sub-segments of the beverage sector, such as beer, yogurt, milk products, and sports drinks. Production and consumption of plastic caps and closures is seeing the strongest growth in Russia, Poland, and Turkey. Manufacturers in Eastern Europe are investing above all in mass production of standardized products, such as screw-caps for PET bottles. In contrast, producers in Western Europe are concentrating, for example, on complex closures systems with seals and built-in dosing devices for medications. Optical characteristics, such as transparency and gloss, especially play an important role in packaging for cosmetics