Overcoming Barriers in the Modified Plastics Industry: Challenges and Solutions for Market Growth.

Overcoming Barriers in the Modified Plastics Industry: Challenges and Solutions for Market Growth

1. Market barriers

With the development of downstream industry technology level, the requirements for plastic products in terms of function, performance, environmental protection and safety are getting higher and higher, and if they want to become suppliers of downstream enterprises, material manufacturers need to accept strict auditing. Large downstream customers usually identify or audit their suppliers through a complex and tedious process to include qualified suppliers in the supplier list or range, and usually only those who enter the supplier list or range can supply to them. In addition, after a series of strict supplier selection steps, for economic efficiency considerations, in order to maintain the stability of supply quantity and quality, downstream enterprises usually do not easily change suppliers, based on long-term stable cooperation and the formation of an integrated upstream and downstream supply and demand relationship will become a market barrier for new entrants to the industry.

2. Technical barriers

As the process of modified plastics is short and simple, the core of product competitiveness lies in the formulation, equipment commissioning and detail management. In the design of the formula, raw materials and functional additives ratio of slight changes can cause large fluctuations in product performance indicators, so the current high-performance modified plastics formulations are still protected by patents. Due to the confidentiality of the formula, manufacturers who want to enter the industry must master a certain amount of professional formula to gain a foothold in the industry. In addition, because the plastics industry is demand-driven, it needs to quickly develop corresponding products according to the needs of the downstream industry, coupled with the industry's rapid technological update, in order to adapt to downstream demand and maintain competitive advantage, the industry must continue to develop new products, the lack of technical accumulation and continuous research and development capabilities of enterprises are difficult to have the corresponding technical capabilities to adapt to market demand, the industry has certain technical barriers.

3. Brand Barrier

With the personalized needs of customers in the downstream plastic products industry, the main downstream industries are putting forward higher and higher requirements on the quality, quantity and service response speed of the materials, etc. Enterprises that have established a reputation and brand in the industry are often more likely to be trusted and favored by customers. Small and medium-sized enterprises without technical excellence and professional characteristics of the process, it is difficult to stand in the future competition, because behind the excellent reputation and well-known brand often represents high-quality products, highly qualified personnel and rich industry experience. At the same time, the creation of a well-known brand requires long-term and substantial investment, rich professional experience and industry accumulation, and the formation of an excellent reputation, which is difficult for new entrants to achieve in the short term. Therefore, there is a high brand barrier in this industry, and it is difficult for general small enterprises to reach the rapid recognition of high-end and high-quality customers.

4. Capital Barrier

As a manufacturing industry, modified plastics need to invest a lot of equipment for production and research and development, and production and research and development for the equipment specifications are high, coupled with the obvious characteristics of economies of scale, from research and development to achieve large-scale production requires a large amount of investment, continuous technology research and development and product development will increase the amount of capital. In addition, the expansion of production capacity to achieve large-scale production, in order to reduce costs and improve market influence, more need to invest a large amount of capital. In operation, a certain amount of operating cash is also required to face the supply of upstream raw materials and changes in downstream demand. The large investment in equipment purchase and production in the early stage, as well as the continuous operating cash demand and R&D expenditure become the financial barriers for new entrants to the industry.