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WWW.IBISWORLD.CA
Rory Masterson
16 International Trade
28 Key Statistics
Industry Definition
18 Business Locations
28 Industry Data
Main Activities
Similar Industries
20 Competitive Landscape
Additional Resources
28 Annual Change
4 Industry at a Glance
28 Key Ratios
5 Industry Performance
22 Barriers to Entry
Executive Summary
23 Industry Globalization
Current Performance
Industry Outlook
24 Major Companies
25 Operating Conditions
25 Capital Intensity
13 Supply Chains
26 Revenue Volatility
14 Demand Determinants
27 Industry Assistance
15 Major Markets
WWW.IBISWORLD.CA
Main Activities
Similar Industries
WWW.IBISWORLD.CA
Additional Resources
IBISWorld
WWW.IBISWORLD.CA
Industry at a Glance
Plastic Film, Sheet & Bag Manufacturing in 2016
Key Statistics
Snapshot
Revenue
Profit
Exports
Businesses
$5.1bn
5.9%
0.1%
284
$241.2m $2.3bn
Consumer spending
% change
20
10
% change
Market Share
0
-10
-20
Year 08
2
1
10
12
Revenue
14
16
18
20
22
Year
09
11
13
15
17
19
21
Employment
SOURCE: IBISWORLD
p. 24
23.3%
Canadian-dollar effective
exchange rate index
45.3%
31.4%
Industry Structure
Mature
High
Regulation Level
Light
Technology Change
Medium
Medium
Capital Intensity
Medium
Barriers to Entry
Industry Assistance
Medium
Industry Globalization
High
Concentration Level
Low
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 28
WWW.IBISWORLD.CA
Industry Performance
Imports
Consumer spending
Consumer spending affects demand for a
wide range of goods, including groceries,
electronics, durable goods and other
products. An increase in consumer
spending will positively affect industry
revenue. Consumer spending is expected
to increase in 2016, representing a
potential opportunity for the industry.
Demand from food manufacturing
Food and beverage manufacturers use
plastic bags, films, sheets and other
WWW.IBISWORLD.CA
Industry Performance
Consumer spending
4
8
6
% change
% change
2
1
0
Year
4
2
0
09
11
13
15
17
19
21
-2
Year
09
11
13
15
17
19
21
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Performance
Foreign competition
persists
Industry revenue
20
10
% change
Current
Performance
0
-10
-20
Year 08
10
12
14
16
18
20
22
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Performance
Profit constraints
Industry structure
Operators
have been
increasingly automating
production processes
innovative computer technology, as
industry operators choose to invest more
in automated machinery to increase
labour productivity. This has allowed
industry operators to suppress wage
costs over the five years, with wages
showing almost no change over the
period and totalling an estimated $701.3
million in 2016. As a share of revenue,
wages have thus declined from 15.7% to
13.7%, and IBISWorld expects
employment growth to slow as operators
increasingly rely on automated
production processes.
WWW.IBISWORLD.CA
Industry Performance
Industry
Outlook
Foreign competition
persists
Profit constraints
Industry
WWW.IBISWORLD.CA
Industry Performance
Profit constraints
continued
Industry structure
Manufacturers
will seek to
consolidate operations to
bolster profit margins
Furthermore, operators will seek to
automate operations to bolster profit
margins, especially in light of material price
increases that are anticipated to occur over
the next five years. IBISWorld expects wages
to decline an annualized 0.2% to $709.1
million, 13.7% of industry revenue in 2021.
Similarly, employment growth will be
limited, projected at an annual average rate
of 0.2% to 12,486 workers.
WWW.IBISWORLD.CA
Industry Performance
Life Cycle Stage
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
15
10
Quantity Growth
Decline
-5
Shrinking economic
importance
-10
-10
-5
10
15
20
WWW.IBISWORLD.CA
Industry Performance
industry
is M
ature
WWW.IBISWORLD.CA
Supply Chain
44511CA
45291CA
32518CA
32521CA
23.3%
45.3%
31.4%
Total $5.1bn
Plastic film and sheets
Accounting for an estimated 45.3% of
industry revenue in 2016, nonpackaging
plastic film and sheets make up the
largest product segment in this industry.
End uses of plastic films and sheets
include a variety of applications, such as
wall construction, drop cloths, vapor
and moisture barriers for concrete,
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Demand
Determinants
WWW.IBISWORLD.CA
Major Markets
6.9%
6.8%
Automotive
Other
16.1%
Construction
51.1%
Exports
19.1%
Retail packaging
Total $5.1bn
Exports
Accounting for 44.9% of industry revenue
in 2016, foreign buyers represent the
largest market for Canadian plastic film,
sheet and bag manufacturers. The foreign
market for this industrys goods has been
expanding over the past five years, and it
is anticipated to continue growth in the
next five years. In the five years to 2021,
the Canadian-dollar effective exchange
rate, which measures the relative strength
of the Canadian dollar against its trading
partners, is projected to increase at an
annual average rate of 1.2%, which will
make Canadian-produced goods relatively
more expensive to overseas buyers.
Retail packaging
Retail packaging applies to a whole range
of consumer goods that use product
packaging in the production process.
Firstly, this market segment includes a
variety of food, beverage, tobacco and
consumer goods manufacturers that use
plastic packaging and other industry
products to seal and extend the shelf life of
their products. Secondly, the retail
packaging segment covers suppliers of
goods, such as wholesalers, distributors
and retailers, as they use the plastic
packaging products produced by this
industry to distribute goods to
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
International Trade
Level & Trend
xports in the
E
industry are H
igh
and I ncreasing
Imports
in the
industry are H
igh
and I ncreasing
Exports
Accounting for an estimated 44.9% of
revenue in 2016, exports represent a
major market and revenue source for
Canadian plastic film, sheet and bag
manufacturers. The overwhelming
majority of industry exports are
consumed by buyers in the United
States, which accounts for an estimated
95.2% of exported plastic film, sheet and
bags. Rounding out the remainder of the
top four export destinations for industry
products are China (1.3%), Chile (0.7%)
and France (0.6%). Over the five years to
2016, the total value of industry exports
has grown at an annualized rate of 5.4%
to $2.3 billion. Over the next five years,
exports are expected to continue growth,
with average annual growth of 6.8%
expected from 2016 to 2021.
Imports
Imported plastic film, sheet and bag
products are expected to account for
49.6% of domestic demand in 2016,
which is higher than 2011 levels of
Other
Other markets are expected to account for
8.5% of industry revenue in 2016, and
include agriculture companies, which use
industry products for irrigation, waste
containment, weed control, packaging and
storage purposes. Because of plastics
ability to protect from moisture, dust,
debris and severe temperatures, it
provides a cost-effective way for producers
in the agricultural industry to extend the
life of their perishable products. The share
of revenue generated from agriculture
buyers has been mostly steady over the
past five years.
$ billion
Major Markets
continued
0
-2
-4
-6
Year 08
Exports
10
12
Imports
14
16
18
20
22
Balance
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
International Trade
continued
Exports To...
Imports From...
2.1%
11.0%
3.0% 0.3%
China
0.4%
Germany
2.2%
Mexico
France
1.1%
China
13.1%
All other
95.2%
71.6%
United States
United States
Year: 2016
Total $2.3bn
Total $2.8bn
SOURCE: USITC
WWW.IBISWORLD.CA
Establishments (%)
Less than 5%
NT
YT
NU
NORTHERN TERRITORIES
0.0
BC
14.6
AB
10.9
SK
0.0
MB
3.6
ON
50.0
NL
QC
0.0
20.0
NB
0.9
NS
PE
0.0
0.0
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Quebec
Ontario
Nova Scotia
Newfoundland
Northern Territories
Establishments
Population
New Brunswick
Manitoba
Alberta
0
British Columbia
Business Locations
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
20
Competitive Landscape
in
this industry is L ow
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Cost Structure
Benchmarks
Economies of scale
Vertically integrated companies can
maintain better control over their access
to raw materials, as well as the price
paid for raw material inputs. As such,
they can lower production costs and
Profit
Average industry profit, measured as
earnings before interest and taxes, is
expected to reach 4.7% of industry
revenue in 2016. This represents an
increase in profitability over the past five
years, with profit recorded at 4.1% in
2011. Increased profitability has been a
result of improved economic conditions,
a reduction in production expenses, and
increased labour productivity.
Specifically, recent declines in the price
of crude oil and natural gas have reduced
input costs for operators, while wage
costs have been suppressed by capital
investments in machinery and other
labour-saving technology. Improved
demand for exports as a result of the
WWW.IBISWORLD.CA
21
Competitive Landscape
100
Average Costs of
all Industries in
sector (2016)
Industry Costs
(2016)
8.0
4.7
12.2
13.7
59.3
64.4
n Profit
n Wages
n Purchases
n Depreciation
n Marketing
n Rent & Utilities
n Other
80
Percentage of revenue
Cost Structure
Benchmarks
continued
60
40
20
2.5
3.7
12.9
1.4
2.5
1.8
12.3
0.6
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
22
Competitive Landscape
Cost Structure
Benchmarks
continued
Basis of Competition
in this
industry is H
ighand
the trend is S
teady
Barriers to Entry
Level & Trend
arriers to Entry
B
High
Low
Mature
Medium
Medium
Light
Medium
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
23
Competitive Landscape
in this
industry is H
ighand
the trend is S
teady
International trade is a
major determinant of
an industrys level of
globalisation.
Exports offer growth
opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.
Trade Globalisation
200
Export
150
100
50
0 Local
0
Import
40
80
120
Imports/Domestic Demand
160
200 Export
Exports/Revenue
Exports/Revenue
Industry
Globalization
Global
150
100
50
2005
2016
0 Local
0
Import
40
80
120
160
Imports/Domestic Demand
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Major Companies
Other Companies
WWW.IBISWORLD.CA
Operating Conditions
of capital
intensity is M
edium
Capital intensity
Economy
Manufacturing
In Canada
Plastic Film,
Sheet & Bag
Manufacturing
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Snack Food
Production
Soda
Production
Plastic Film,
Sheet & Bag
Manufacturing
Capital Intensive
Labour Intensive
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Operating Conditions
Revenue Volatility
Level
The level
of
Volatility is H
igh
Volatility vs Growth
1000
Level
The level
Hazardous
Rollercoaster
100
10
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
WWW.IBISWORLD.CA
Operating Conditions
Regulation is
Lightand the
trend is S
teady
Industry Assistance
Level & Trend
he level of Industry
T
Assistance is
Mediumand the
trend is S
teady
WWW.IBISWORLD.CA
28
Key Statistics
Industry Data
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Industry
Value Added
($m)
1,019.2
847.2
867.8
784.2
862.9
892.3
951.5
965.7
1,039.1
1,071.0
1,056.2
1,056.1
1,056.2
1,056.9
1,066.3
Establishments
342
342
321
314
310
307
361
345
363
365
367
365
371
369
376
Enterprises Employment
267
11,793
272
10,826
251
10,204
243
10,091
239
10,439
240
10,600
282
11,837
270
11,300
283
12,130
284
12,340
286
12,288
284
12,238
290
12,344
288
12,315
294
12,486
Exports
($m)
1,974.5
1,930.2
1,868.3
1,816.7
1,772.3
1,781.1
1,781.8
1,923.0
2,215.6
2,304.0
2,456.5
2,671.4
2,848.9
3,004.3
3,194.9
Imports
($m)
2,025.2
2,073.7
1,906.7
1,924.3
1,938.7
1,967.5
2,106.9
2,344.9
2,618.4
2,781.4
3,016.8
3,269.6
3,496.9
3,727.6
3,970.2
Wages
($m)
721.7
637.7
602.8
584.1
607.6
615.6
627.7
626.8
684.4
701.3
697.0
695.1
700.4
699.9
709.1
Domestic
Demand
4,485.4
4,103.0
3,811.9
3,808.2
4,025.3
4,011.4
4,822.7
4,882.3
5,355.6
5,609.7
5,644.5
5,692.6
5,752.5
5,848.8
5,936.0
Revenue
(%)
-10.7
-4.7
-1.9
4.3
-0.9
17.6
-0.8
11.0
3.6
-0.9
0.2
0.2
0.4
0.7
Industry
Value Added
(%)
-16.9
2.4
-9.6
10.0
3.4
6.6
1.5
7.6
3.1
-1.4
0.0
0.0
0.1
0.9
Establishments
(%)
0.0
-6.1
-2.2
-1.3
-1.0
17.6
-4.4
5.2
0.6
0.5
-0.5
1.6
-0.5
1.9
Enterprises Employment
(%)
(%)
1.9
-8.2
-7.7
-5.7
-3.2
-1.1
-1.6
3.4
0.4
1.5
17.5
11.7
-4.3
-4.5
4.8
7.3
0.4
1.7
0.7
-0.4
-0.7
-0.4
2.1
0.9
-0.7
-0.2
2.1
1.4
Exports
(%)
-2.2
-3.2
-2.8
-2.4
0.5
0.0
7.9
15.2
4.0
6.6
8.7
6.6
5.5
6.3
Imports
(%)
2.4
-8.1
0.9
0.7
1.5
7.1
11.3
11.7
6.2
8.5
8.4
7.0
6.6
6.5
Wages
(%)
-11.6
-5.5
-3.1
4.0
1.3
2.0
-0.1
9.2
2.5
-0.6
-0.3
0.8
-0.1
1.3
Domestic
Demand
(%)
-8.5
-7.1
-0.1
5.7
-0.3
20.2
1.2
9.7
4.7
0.6
0.9
1.1
1.7
1.5
IVA/Revenue
(%)
22.98
21.40
23.00
21.19
22.36
23.33
21.16
21.65
20.98
20.87
20.77
20.73
20.69
20.62
20.66
Imports/
Demand
(%)
45.15
50.54
50.02
50.53
48.16
49.05
43.69
48.03
48.89
49.58
53.45
57.44
60.79
63.73
66.88
Revenue
($m)
4,434.7
3,959.5
3,773.5
3,700.6
3,858.9
3,825.0
4,497.6
4,460.4
4,952.8
5,132.3
5,084.2
5,094.4
5,104.5
5,125.5
5,160.7
Annual Change
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Key Ratios
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Exports/
Revenue
(%)
44.52
48.75
49.51
49.09
45.93
46.56
39.62
43.11
44.73
44.89
48.32
52.44
55.81
58.61
61.91
Revenue per
Employee
($000)
376.05
365.74
369.81
366.72
369.66
360.85
379.96
394.73
408.31
415.91
413.75
416.28
413.52
416.20
413.32
Wages/Revenue
(%)
16.27
16.11
15.97
15.78
15.75
16.09
13.96
14.05
13.82
13.66
13.71
13.64
13.72
13.66
13.74
Employees
per Est.
34.48
31.65
31.79
32.14
33.67
34.53
32.79
32.75
33.42
33.81
33.48
33.53
33.27
33.37
33.21
Average Wage
($)
61,197.32
58,904.49
59,074.87
57,883.26
58,204.81
58,075.47
53,028.64
55,469.03
56,422.09
56,831.44
56,722.01
56,798.50
56,740.12
56,833.13
56,791.61
Consumer
spending
($b)
839.0
862.4
863.7
895.6
915.3
932.8
955.4
980.1.0
1,000.2
1,021.5
1,041.6
1,060.3
1,078.3
1,095.6
1,119.2
Consumer
spending
(%)
2.8
0.2
3.7
2.2
1.9
2.4
2.6
2.1
2.1
2.0
1.8
1.7
1.6
2.2
Share of the
Economy
(%)
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Jargon
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