Market Trends of Pallets Industry
Increasing Demand for Plastic Pallets Across the Industry Verticals
- Plastic pallets are rigid structures that provide mechanical stability to bulk goods during handling to preserve quality. Handling includes all activities related to lifting, moving from one point to another, stacking, product storage, and long-distance transportation by land or sea. Plastic pallets are designed to be moveable by equipment such as forklifts, pallet jacks, and front loaders to facilitate the mobility of goods. Plastic pallets are highly recommended in food & beverage, pharmaceutical, chemicals, and other industries, where the risk of chemical contamination is significantly high.
- Moreover, Plastic pallets offer certain benefits over wooden pallets, which makes it one of the fastest-growing pallet types on the market. Since manufacturers can recycle them or melt and reform them into other manufacturing supplies, this option is popular among businesses looking to reduce waste. Plastic pallets have also risen in demand and popularity because they can store products without the risk of pests or termites.
- PVpallet, one of the players operating in the pallets market, is using discarded, recycled plastic to manufacture pallets. In September 2022, the company launched the first recyclable, reusable, adjustable, and collapsible pallet system specifically designed for shipping and protecting solar PV modules. The company aims to revolutionize the solar shipping industry efficiently and meaningfully by replacing traditional wood shipping pallets. Such initiatives are expected to boost the demand for plastic pallets.
- Further, increasing cross-border agricultural and allied sector import-export has helped boost the demand for plastic pallets. These pallets do not absorb moisture or have issues such as infestation, fumigation, rot, and odor absorption like wood pallets, and they can be easily and thoroughly cleaned between uses. These pallets are perfect for industries with regulatory and hygiene requirements, such as food, beverage, and pharmaceutical.
- In line with the same, the increasing export of commodities from India to other countries will propel growth for plastic pallets. According to DGCI&S, marine products worth INR 579 billion (USD 7.05 billion) were exported from India in the financial year 2022. Marine products export value was higher among agricultural and allied sector exports. This was followed by non-basmati rice, sugar, basmati rice, and spices.
- However, plastic pallets are also susceptible to drastic changes in temperature and weather, making them less effective during transportation. The cost of plastic pallets is also considerably higher compared to the cost of wooden and recycled pallets. Businesses ultimately alternate between calculating projected costs using rental, recycled, or whitewood materials to determine the best material for their pallets. This can hinder the growth of plastic pallets.
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Asia-Pacific Account for Significant Market Growth
- The manufacturing industry plays a vital role in India's economic growth. Key sectors such as automotive, engineering, chemicals, pharmaceuticals, and consumer durables have significantly contributed to the country's manufacturing output. India's manufacturing industry has been projected to be among the fastest-growing sectors in the region. The government's initiatives, such as the "Make in India" campaign to boost domestic manufacturing and attract foreign investments, have contributed to this growth trajectory. Manufacturing sector growth is driven by increasing domestic consumption, disposable incomes, a growing middle class, and favorable government policies. Additionally, India's demographic advantage, with a large and young workforce, provides a strong foundation for the growth of the manufacturing industry.
- According to India Brand Equity Foundation (IBEF), India can export goods worth USD 1 trillion by 2030 and is on its path to becoming a major global manufacturing hub. With 17% of the nation's GDP and over 27.3 million workers, manufacturing plays a significant role in the Indian economy, supporting the growth of the pallets market. Further, India is an agricultural-centric country, and its export value of agriculture increased from USD 35.09 billion in 2020 to USD 50.21 billion in 2022.
- Moreover, according to Cefic, the European Chemical Industry Council, with EUR 1,729 billion ( USD 1893.34 billion) worth of chemicals produced, China was the largest chemicals producer in the world, contributing 43% of global chemical sales in 2021. During 2017, China experienced positive growth in chemical sales (even during COVID-19 )and has grown by 11.9% since 2020. Further, according to the United Nations COMTRADE database on international trade, China's exports of organic chemicals to India were USD 13.05 Billion in 2022. Such factors are anticipated to contribute to the growth of the Pallets market during the forecast timeframe.
- Furthermore, the region witnessed investment fueling the market's growth. In January 2021, Leading Enterprise in Advanced Pooling (LEAP India), a fund focusing on infrastructure, received a USD 25 million investment from Morgan Stanley India Infrastructure. A significant player in the nation's pallet pooling market is LEAP India. It focuses on increasing the company's assets, which include pallets, sizable foldable containers, crates, and utility boxes, from 4 million to 6 million units.
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