High Material Prices to Decrease Demand for Silo Bags

A new forecast on the North American silo bags market suggests that demand for the product will decline between 2016 and 2026 due to increases in prices for raw materials used to produce the bags like polyethylene films, according to a press release issued Thursday by business research firm Future Market Insights.

“Contingent upon the monotony of this scenario in years to come, North America’s silo bags [market] is less likely to soar at a steady momentum, and will probably exhibit revenue growth at 4.8% CAGR [compound annual growth rate],” the firm said.

Along with high material costs, the firm predicts that environmental regulations related to industrial use and large-scale production of plastic films will hinder cost-effective production of silo bags.

“Silo bags, made from raw materials such as polyethylene and polypropylene films, are another burden on such regulatory authorities as dumping waste silo bags leads to environmental degradation,” said Future Market Insights.

Researchers posit that polyethylene bags will account for more than 90% of North American silo bag revenues during through 2026. Sales of silo bags are expected to reach a total of $25 million in the U.S. and Canada by the end of the period, with America holding an 80% market share.

“Another factor that is expected to inhibit the growth of North America’s silo bags is the aggressive competition for securing higher profits. Leading manufacturers of silo bags in the region are faring the market’s cut-throat competitive landscape by providing a product line with extra features,” the firm wrote. “The overall profitability behind the sales of basic silo bags gets compromised and distorts the demand influx.”

The key players in the market during the forecast period were identified as Blue Lake Plastics, Grain Bags Canada, RKW Hyplast NV, GEM Silage Products, Grain Pro Inc., BagMan LLC, Canadian Tarpaulin Manufacturers LTD., Temudjin Flex-Pack BV, and KSI Supply Inc.

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