Like metal and ceramic, plastic has become an indispensable
part of people’s lives. Because it is lightweight
and can be easily molded, it is suitable for producing
parts in mass quantities. For this reason, plastic
is widely used in high-tech industries, including electric appliances,
transportation equipment, aerospace, 3D printing and
household goods. In general, plastics can be classified into three
kinds—commodity plastics, engineering plastics and super engineering
plastics—based on their continuous use temperature.
Polyethylene and polypropylene (continuous use temperature:
below 100°C) belong to general-purpose plastics. On the other
hand, materials such as polycarbonate (continuous use temperature:
between 100°C to 150°C) are classified as engineering
plastics. Those that can endure above 150°C are classified as
super engineering plastics. General-purpose plastics and engineering
plastics, widely used in household goods, are usually
produced and consumed in large quantities, which bring in
large-scale investment. Special-purpose engineering plastics and
super engineering plastics, however, are limited in their application
and are used for industries like aerospace. Thus, the type of
plastic is produced in small quantities with multiple production
lines and sold at relatively high prices.
Globally, the engineering and super engineering plastic material
market is expected to grow at a compound annual growth
rate (CAGR) of 3.5 percent from 8.86 million tons (KRW 44
trillion) in 2014 to 10.8 million tons (KRW 53 trillion) in 2020.
General-purpose plastics such as polycarbonate, polyamide and
polyoxymethylene occupy 93.5 percent of the total market
share, while the remaining 6.5 percent is taken up by super engineering
plastics. This means that most engineering plastics are
used for general purposes, whereas super engineering plastics
are limited for special purposes. When it comes to industry
growth rate, the general purpose engineering plastic sector is
expected to grow 3.5 percent and the super engineering plastic
industry 4.1 percent annually.
Korea is a chemical industry powerhouse which boasts a production
scale of approximately USD 177 billion as of 2013. This
is the fifth largest production scale in the world, close to that of
other advanced countries like Japan and Germany. Korea’s
chemical industry is also well-structured both upstream and
downstream. Since the 1970s when the government started fostering
the heavy and chemical industry, Korea developed both
the upstream petrochemical industry that produces ethylene
from crude oil as well as downstream industries based on the
technologies of the upstream industry. The plastic industry takes
up approximately 17 percent of the total petrochemical industry
based on shipment value. Most of the shipment is for generalpurpose
plastic. However, engineering plastic is increasingly
taking up a bigger share. For instance, the proportion of nylon and polyethylene terephthalate (PET) increased in the 1990s, as
well as polycarbonate and polyimide film in the 2000s.
Recently, the demand for light and
eco-friendly materials is
increasing. Electric/electronic devices such as wearable devices
are quickly being developed and the era of eco-friendly vehicles
is well on its way. This is the reason why engineering plastic is
becoming a new growth engine in many advanced countries. A
brief summary of the growth engines of the engineering plastics
industries is as follows.
| Growth factors |
|---|
● Lightweight
Lightweight cars are being developed to match the international
community’s efforts to cut greenhouse gas emissions and
to meet stricter regulations regarding fuel efficiency. For example,
reducing the weight of a 1.5-ton vehicle by just 10 percent
can lead to 3.8 percent higher fuel efficiency, 4.5 percent less
carbon dioxide emissions and 1.7 times greater durability of the
car body. In addition, Korea, the United States and the EU have
already announced that they would impose stricter regulations
regarding fuel efficiency. As a result, automobile companies
around the world are investing a large amount in the research of
making car materials lighters. Under such circumstances, engineering
plastic is quickly becoming more valuable. Super engineering
plastic has strong enough heat resistance to replace metal
materials. Also, since the weight is less than half that of metal,
it is one of the most suitable materials for lightweight automobiles.
● Environmentally friendly
People often think that plastic, as a petrochemical product, is
not eco-friendly, regardless of its actual effects to the environment.
Therefore, it is necessary to make engineering plastics
more eco-friendly so that it can be continuously used in the
industry. Eco-friendliness can be achieved in three ways. First, it
can be achieved by introducing an eco-friendly manufacturing
process, such as volatile organic compounds (VOC) to reducing
toxic substances. The second way is to utilize more bioplastics,
which are made from eco-friendly raw materials such as biomass.
Third, it can be achieved through biodegradable plastic
that can decompose in a natural way. For the most part, ecofriendly
engineering plastic materials can be used for household
goods, transport equipment and electrical and electronic industries.
● Highly functional
What if plastics can radiate heat or have a metal-like luster?
Such questions are closely related to the functionalization of
engineering plastics, which creates added value in finished
goods. Functionalization is especially important for wearable
devices such as mobile phones. Given that Korea is a powerhouse for wearable appliances, the functionalization of engineering plastics will greatly impact the development of other relevant fields. In the future, the engineering plastic industry will continue to grow not only in Korea but also in the world if it can make engineering plastic lighter, more environmentally friendly and highly functional.
| Future prospects |
|---|
From a technological standpoint, it is very important to continuously
develop engineering plastic materials. Close industryacademia
cooperation is the pre-requisite to achieving this goal.
First, universities should develop basic technologies and nurture
human resources specializing in engineering plastics. Second,
national and public research institutes should develop optimized
material properties and fusion technologies. Lastly, companies
should conduct business and economic feasibility tests in order
to select technologies to commercialize for the global market.
These technologies developed by industry-academia cooperation
can be applied in various ways.
As previously mentioned, the foundation of Korea’s engineering
plastic industry is relatively weak. However, we can make a
breakthrough by actively attracting foreign capital. In attracting
foreign capital, there are two important factors, which are location-
related incentives and manpower. The first factor includes
access to industrial sites and tax incentives, while the second
factor of manpower is comprised of bright talents who can
effectively operate production facilities. In this regard, despite
Korea’s lack of capital, advanced basic technologies and manpower
can go a long way securing foreign capital. Japan’s Toray
and Germany’s BASF establishing polyphenylene sulfide and
polyether sulfone factories in Korea are examples of such direct
investment.
Korea has officially entered the FTA with China as of
December 2015. In this agreement, Korea’s degree of openness
in the materials industry is higher than that of China.
Considering that many global chemical companies are already
operating in China, there is concern that the Korean market
might be taken up by products produced by these chinese companies.
Fortunately, there are still far more corporations wishing
to enter the Chinese market, but difficulties in managing manpower,
the unstable financial system and income disparity are
serving as stumbling blocks to making investments there.
In this regard, Korea has a competitive edge against China in
terms of manpower, technological capability and national branding.
By taking advantage of these strengths, Korea should make
sure that the Korea-China FTA creates positive effects on
attracting foreign direct investment. For example, if we succeed
in bringing a global materials company to Korea, that company
can help domestic engineering plastic companies enter the
Chinese market. A tell-tale example of this is Japan’s Toray,
which set up a factory in Gunsan, Korea.
While the Obama administration actively pursued TPP negotiations, Donald Trump has been less passionate about the agreement thus far. Because the TPP has a similar effect of signing an FTA with Japan (although technically speaking, it is a deal with Pacific Rim countries), the delayed TPP negotiations can be a good opportunity for the engineering plastic materials industry. That is because Japan is a powerhouse for plastic materials used for electronic products, and it will be difficult for Korea’s high value-added plastic industry to survive if the TPP enters into force right now. Therefore, Korea should take this period as an opportunity to develop relevant technologies.
The fourth industrial revolution is all the rage, as evidenced
by keywords like big data, shared economy, autonomous vehicles,
Internet of Things and 3D printing. With the fourth industrial
revolution, the existing industrial structure is being torn
down, giving way to new industries. This revolution might
focus on the software aspect of things, but physical materials are
also becoming important. For example, one of the issues regarding
autonomous vehicles is how to make lightweight cars. In the
Internet of Things sector, sensors featuring special plastics are
becoming more necessary, while engineering plastic materials
are with no doubt important in 3D printing technology.
When a new industry emerges, start-ups can enjoy a variety of
opportunities. As previously stated, super engineering plastics
are produced in small quantities. That is why it is an optimal
sector suitable for the fourth industrial revolution. The merit of
super engineering plastics is that people can start a small-sized
business based on high-quality technology without heavily
investing in a large industrial sites. Moreover, burgeoning startups
can be a bridgehead for foreign companies seeking to enter
Korea through foreign direct investments or M&As. On this
note, corporations and the government should recognize the
importance of plastic materials in the era of the fourth industrial
revolution, and actively pursue R&D efforts in this field.
| Conclusion |
|---|
Korea’s history of technology development and production in the engineering plastic field is very short compared to that of other advanced countries. However, it is estimated that the engineering plastic industry will continue to grow with increasing demand for lightweight, eco-friendly and highly-functional plastics. Therefore, Korea needs to actively promote foreign investment based on advanced technologies and skilled manpower. Despite industrial paradigm shifts, such as the changing trade environment caused by the FTA and TPP and the fourth industrial revolution, the engineering plastic industry will continue to grow together with Korea’s main industries such as automobiles and electronic/electrical devices.
