Topics: Biodegradable plastic, Biodegradation, Bioplastic Pages: 6 (1232 words) Published: January 23, 2013
PESTEL Analysis
• Brazilian and Mexican governments should be engaged on the development of incentives to bioplastics manufacturers - especially small and medium sized. The governments, together with industry associations, are expected to be involved in developing standards and certifications for bioplastics, such as the Compostability Regulation. • In Brazil, there exist public programs for recycling plastics (such as a selective collection) and the same model could be applied for compostable materials. In Mexico, there exist programs for recycling based on replacement of supermarkets biodegradable plastic handbags. • Additionally, in Brazil the current Government is taking extra efforts in ethanol production development. In 2009, the Government conceived $x billion in credit offer for the sugarcane and ethanol sector. There is an expectation that, if the current Government wins the presidential election in 2010, there is the possibility that Petrobras will increase its participation in the ethanol sector.

• The price premium required for bio-based plastics over conventional plastics will particularly be restraining market growth in Brazil and Mexico, where end users are strongly oriented to evaluate unit prices when choosing materials. • In Brazil, Braskem is well set to introduce the lowest priced bio-based plastics, which will have a premium of about xx to 50 percent over competing oil-based plastics. • Manufacturers are also looking at bioplastics and compostable plastics as competitive products from the economic point of view. Compostable plastics, for instance, reduce the need for water and fertilizers and serve as a marketable commodity.


© 2007 Frost & Sullivan, All rights reserved

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PESTEL Analysis (Contd…)
• There are no governmental incentives to the bioplastics production in Brazil and Mexico. However, the bioplastics industry has the potential to attract public investments, as it can generate job positions in several areas of the value chain (from vegetables production as raw material up to bioplastics conversion).

• More than the production of bioplastics from oil, the use of renewable sources plays a major role to mitigate the dependency on oil and reduce the environmental footprint. Brazil is leading the way in this industry after years of research and experience in technology based on sugarcane ethanol. • Manufacturers, such as DuPont and BASF, are investing on R&D aiming to produce bioplastics with improved technical performance, to compete with petrochemical plastics. While the performance is yet not comparable to that of conventional plastics, they promote bioplastics in applications where biodegradability adds value to the product or solution. • A major concern regarding technology is to develop bioplastics with performance comparable to commodity resins, in order to penetrate several market segments.


© 2007 Frost & Sullivan, All rights reserved

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PESTEL Analysis (Contd…)
• Bioplastics production can generate and mandate environmental awareness among customers, as these projects can be involved in Clean Development Mechanisms inside companies. • The use of compostable plastics is environmental-friendly as these create enhanced microbial action in the soil, developing a stable ecosystem. The compost increases soil workability, water holding capacity, and porosity. • The environmental benefits of using bioplastics are well known among the educated people in Brazil and Mexico. However, there is still a long way to transfer this knowledge from laboratories to final customers. Manufacturers should do an intense awareness work in this area, always correlating environmental benefits with cost saving in the long term. • For plastic converters, the environmental benefits can be also associated with the company’s image in the market.

• The development...
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