Plastic Contract Manufacturing Market Share & Growth [2031]

Report Description

Plastic Contract Manufacturing Market Outlook 2031

The global plastic contract manufacturing market size was USD 29.50 Bn in 2022 and is likely to reach USD 45.37 Bn in 2031, expanding at a CAGR of 4.9% during 2023–2031.  Market growth is attributed to streamlined plastic solutions and services that cater to the rising demand of consumers.

Plastic contract manufacturing offers benefits such as cost-efficiencies and quality products, thus it has gained demand across various industries. Manufacturers are outsourcing the production of plastic components or specialized products that tend to meet specific requirements in the market. This allows the companies to focus on their core competencies benefitting from the capabilities of the contract manufacturing of plastic.

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COVID-19 Analysis

The COVID-19 pandemic moderately affected the plastic contract manufacturing market. Disruptions in the plastic contract manufacturing ecosystem, such as the supply chain management of the raw materials and components, restricted the market. The lockdown resulted in the stoppage of production of the plastic products. The manufacturers had to bear the loss of investment due to the shortage of workers. However, the sector was able to back on track due to high demand from the medical sector.

Manufacturers and suppliers had to make their operations ongoing to meet the requirements of the medical industry. For instance, RSP Inc., a market leader in contract manufacturing on plastic and injection molding services, kept its US-based headquarters open during the pandemic. The company's quick response allowed it to streamline the supply chain and provide uninterrupted service. Furthermore, growing forward the market is expected to grow at a robust pace due to its increasing demand from the healthcare sector.

Plastic Contract Manufacturing Market Dynamics

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Drivers

Growing of the healthcare sector is a major contributor to driving the market. Manufacturing of medical devices requires plastic contract solutions and expanding the medical devices sector, which is likely to fuel the market. For instance, according to a report published by the India Brand Equity Foundation (IBEF), India-based medical devices are attributed for USD 11 Bn in 2021 and are projected to reach USD 60 Bn in 2024. Such investments in the medical devices sector boost the production of plastic globally.

Rising the automotive sector is projected to drive the market in the coming period. The multiple production of plastic parts is manufactured due to the plastic contract manufacturing solutions. However, injection molding is the most used technique in the automotive industry with a high-quality finish. For instance, according to a published report, new energy vehicles (NEVs) are anticipated to register high demand for plastic products. Additionally, as per the data by the IBEF, the company is expected to register a significant growth to reach USD 45.2 Bn in 2022. Such massive growth indicates the growth of the market.

Restraints

Lack of standardization and quality control is hampering the market. The maintenance of consistent quality products can be challenging when outsourcing plastic materials.

Dependency on contract manufacturers is restricting the market. Companies relying on the manufacturers are expected to face risk due to the disruptions in the supply chain that can impact production.

Opportunities

Increasing demand for sustainable solutions is projected to create lucrative opportunities in the market. With the growing environmental concerns, there is a rise in the demand for sustainable plastic solutions. Many manufacturers and contractors are capitalizing on this opportunity by providing solutions such as the usage of eco-friendly materials, sustainable manufacturing processes, and recycling capabilities. These factors are boosting the market in the coming years. For instance,

• In October 2022, Seaway Plastics Engineering specializing in contract manufacturing services is using eco-friendly materials in injection molding and producing FDA-regulated products.

Growing awareness of innovative and technological advancements is expected to create opportunities in the market. The plastic manufacturing industry is witnessing continuous advances such as the use of the latest molding techniques, automation, robotics, and digitalization. Thus, the adoption of additive manufacturing technology also known as automotive 3D printing creates immense opportunities for the contractors. This technology provides the production of complex plastic components with minimal material waste and high precision. These factors are anticipated to fuel the market.

Scope of the Plastic Contract Manufacturing Market Report

The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Product Type Segment Analysis

Based on product type, the plastic contract manufacturing market is divided into polypropylene, acrylonitrile butadiene styrene, polyethylene, polystyrene, and others. The polypropylene segment is expected to dominate the market. Manufacturers and suppliers used this product due to its superior properties such as high tensile strength, sterilization, low density, and resistance. Polypropylene is one of the vital materials used in the production of medical and automotive sectors due to its sterilization, resistance, excellent chemical resistance, and electrical conductivity properties. The low cost of the production makes it desirable for the manufacturers.

The acrylonitrile butadiene styrene segment is anticipated to expand at a significant growth rate during the projection period. The ability to withstand frequent heating and cooling several times makes it preciously suitable for recycling. Furthermore, it is lightweight, making it easy to transport and manage, as compared to other materials. This is due to high impact resistance, durability, and strength. Moreover, manufacturers opt to use these products, as they have a low melting point, which enables their use in injection molding and 3D printing. These factors are fueling the segment.

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Service Segment Analysis

Based on service, the global market is segregated into design & engineering, injection molding, blow molding, and others. The injection molding segment is expected to dominate the market. This process is widely used in the manufacturing of plastic due to its low labor cost and high efficiency. Thus, injection molding is usually used to create extremely small and complex parts of plastics. The ability to mold and re-shape the desired products while inserting screws and metals. These properties tend to boost the segment.

The blow molding segment is projected to register a considerable CAGR during the forecast period. It is used in a wide range of applications such as industrial chemicals, personal care products, and containers for beverages. It facilitates the manufacturers due to its weight, durability, and minimal waste. This process allows for a wide range of plastics, including polyvinyl chloride (PVC) and polyethylene (PET) with consistent wall thickness, making it suitable for the market.

Application Segment Analysis

In terms of application, the plastic contract manufacturing market is segmented into medical, aerospace & defense, automotive, consumer goods and appliances, and others. The consumer goods and appliances segment is expected to dominate the market. The increase in the working population and disposable income is propelling the segment growth. They offer superior properties such as low cost, lightweight, and corrosion resistance. Thus, making them an apt choice from smartphones to automobiles.

The healthcare segment is expected to register a robust growth rate during the forecast period. plastics are relied upon to create products such as syringes, surgical gloves, and other medical completes intended for one-time use. The easy availability of plastic helps to eliminate the need to rescue and sterilize a device. This helps to confirm the spread of the diseases.

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Regional Analysis

In terms of region, the global plastic contract manufacturing market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market. The region is the largest manufacturer as well as consumer of plastics. Increasing urbanization and population growth in the region are anticipated to quick expansion of the appliances industry which contributes to market growth. The rapidly growing economy, coupled with the government regulations to limit plastic waste is fueling the regional market. According to a report published by the United Nations Environment Assembly endorsed a resolution to plastic pollution and agreed to a binding agreement by the end of 2024. Moreover, the Ellen Macarthur Foundation Global Commitment has signatures accounting for more than 20% of the plastic market. This includes companies like PepsiCo and Coca-Cola which set the target to reduce plastic waste till 2025. These factors are projected to drive the regional market growth in the forecast period.

• In January 2023, AirPods are now partially made in India, the components of these devices are being made at Apple supplier Jabil Inc. factory in India.

The market in North America has registered considerable growth during the CAGR period. The presence of appliances and the consumer goods industry over the past few years is a result of the high investment in the manufacturing sector in the country. For instance, according to the U.S. Bureau of Labor Statistics, nearly 13 million people are employed in the manufacturing industry in the U.S. The region consists of well-established key contractors for the plastic contract manufacturing market, driven by the presence of key industries and technological advancements such as 3D printing. This technology is used for the production of complex plastic products with minimal waste. Moreover, the demand for high-quality plastic products and the need for cost optimization are significant drivers for the growth of the regional market. For instance,

• In July 2021, Westfall Technik acquired multi-site Consumer Packaging Molder CPP Global and expanded into North Carolina and China. 

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