Feasibility study for an Estonian Materials Technology Programme

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Feasibility study for an Estonian Materials Technology Programme
2. Materials technology in Estonia
2.4.4 Plastics industry
Industry overview
The plastics industry is the smallest industry discussed in this study. According to the official statistics 34 the
whole industrial production (plastics and rubber) was worth approximately 270 million EUR in 2008 and
accounted for more than 230 million EUR in exports. There are currently about 100 companies in the Estonian
plastics industry that are active and generate revenue. 35 The industry is very diverse and the products are aimed
at different industries such as automotive, construction materials and packaging. Most of the companies in
the industry are small and only a few are listed among the 500 largest companies in Estonia. Approximately
half of the industry’s production is exported, mainly to Sweden and Finland.
The plastics industry value chain can be divided into the following broad segments. 36 Majority of the Estonian
companies in the industry are plastic converters, which also means that they are mostly running subcontracting
business. Most of the materials related innovation happens in earlier parts of the value chain including raw
materials, plastics resins and plastics production. The chemical industry in Estonia has some relevance regarding
raw material supply for plastics industry, e.g. utilisation of oil shale based products.
Raw material suppliers (petrochemical and chemical feedstock’s and additives)
Plastics producers (who manufacture plastic resins)
Plastic compounders (prepare plastic formulations)
Plastics machinery manufacturers
Plastic converters (who form the plastic resins and compounds into finished products)
Plastic product distributors/users (OEM manufacturers, retailers, etc.)
Plastics end-of-life businesses (waste management, recycling)
The recent recession hit the plastics industry very hard and forced many Estonian plastics producers to change
their business model. The changes were largest in construction materials providers, which used to produce
decoration materials but are now more focused in producing infrastructure materials for the construction
industry. Packaging materials producers did not face such significant damages from the recession.
Key issues for the plastics industry, especially plastics converting, are the price of raw materials and energy.
The prices of raw materials are increasing rapidly and the industry has seen up to 40% increases in some
raw materials prices. This is seen as especially problematic as the production volumes in the industry are also
expected to grow.
Research and development
Similarly to other manufacturing oriented industries in Estonia, plastics industry does not conduct much dedicated
research and development. The plastics industry is currently very much focused on subcontracting and
companies only have a few products of their own. For that reason, most development in the industry is done
in production where the personnel incrementally develop more efficient production methods. The industry
is clearly in the very beginning of the process of developing new products and the change will not happen
overnight. For many companies, the subcontracting business model is limiting possibilities to develop own
products. Many companies also lack the necessary funding to start technology development activities and thus
national or EU support would be needed.
Most plastics industry related research is conducted in the Department of Polymer Materials at Tallinn
University of Technology. The most important research activities in the department are in novel polymer composites
and research of thermoplastic polymers. Based on the publication and project study, a large majority
of high impact polymer research in Estonia deals with electrically conductive polymers, polymer thin films and
coatings. The research is applied in areas such as solar cells, sensors, and other electronics applications. Printed
and plastic electronics, for instance printing of polymer solar cells, is naturally a very potential application area
for this fundamental research but it is not directly related to the activities going on in the plastics producing
industry.
34 Statistics Estonia
35 Mihkel Susi, Estonian plastics industry association
36 http://www.plasticseurope.org/plastics-industry/value-chain.aspx