according to a survey, which was published by the british plastics federation , more than 60 of total plastic companies expect an increase in their annual turnover. on the other hand, if we look at it closely, the situation is not as favorable as it seems. despite of increase in demand, the profit figures of the company will not show considerable boost due to the increasing prices of raw material and fluctuating demand. so, in this situation, the question arises that how healthy is the plastic sector and what are the advantages and challenges the companies will face it is not an easy task to determine the true health of the vast plastic industry. the numbers of public companies are few and the financial information, which is available to study, is not reliable and comes in an unverified form. rcp is the public company, which has to release its financial statements, recently reported an increase in revenue and profitability over the period of last six months. although, the company has shown increased profitability, ron marsh, who is the group chief executive at rpc, mentioned that the situation is not as easygoing as it seems at this point of time. he further mentioned that the industry has somehow managed to pass the increased cost of raw material to the customers. however, the industry is still finding it difficult to manage its working capital as more money has to be tied up in working capital because of the higher material cost than previous days. he explained that the industry has to bear the increased cost because it takes a certain amount of time to recover the increased cost from customers. this certain amount of time could vary from three months or longer than that. this influences the financial performance of the people in this sector. the companies, which maintained to make a profit without passing the increased cost to customers, and still making profits, have chosen to change the packaging concept in order to cut down the prices. nicholas mockett, who is an m & a expert at moorgate capital, said that innovation is the only way to bring success in this rigid plastic industry. the innovative packaging is directly related to the increased profits. it is obvious that there will be shrinking marginal returns. however, exclusive intellectual property helps to gain better margins. furthermore, even customers willing to pay more for the unique solution that will help their product to make an extraordinary appearance on the shelves or has more shelf life or consumer friendliness. companies like rpc and linpac performs in the innovative way, which has become their strength. jo stephenson, linpac&rsquos vicepresident of marketing innovation, admitted that the industry is facing serious challenges. stephenson further added despite the challenges, the stable demand is driving the changes in packaging design. stephenson further explained with an example of the protein sector. stephenson said customers are eating the white meats, cheap cuts, and minced products than the expensive red meat joints. this trend leads to changes in trends of packaging demand that will be available in forms of different sizes, facilitates extended shelf life and offers split pack for portion control. steve kelsey, who is the pi global&rsquos innovations director, defines rigid plastics as best friends of designers. this is because, from the materials point of view, plastic is a cheap material. as far as design is a concern, plastic is flexible enough and capable to deliver a certain amount of lot. furthermore, it has sustainability benefits, as well. kelsey further explains that if an organization wants to trim down the weight of its packaging, it is advisable to switch to plastic from glass. due to this, some plastic companies are expecting a bright future. kinza sutton, who is the marketing manager at appe, mentioned that appe is working on various material conversion projects. these projects not only include conversion from glass, but from the other materials, as well. sutton expects a continuation in this trend, in future. however, rpc&rsquos marsh has cautioned that not to expect massive changes to happen in the same way that they occurred in the past few years. marsh further mentioned that we will continuously experience the progressive growth that is switching to plastic from other materials at the rate of a couple of points per year. source of information httpwww.piglobal.comp6069more6069
