1.1 Background

According to a study commissioned by PlasticsEurope (Brussels, Belgium) the sales turnover of the West European plastics industry in 2004 was 275 billion with Germany responsible for more than a quarter of the overall figure which includes machinery sales and sales by plastics processors. In terms of the production of plastics, the West European figure of 53.3 million tonnes represented around 24% of world production whereas the percentage figure for Asian production was 35.5% and that for North America was 26%. Usage of plastics in the European electronics sector is relatively small since it is largely confined to passive components where the annual value of the components sold has been valued at 3.78 billion.

As will be seen from this report there has been some migration of electronics manufacturing from Europe to Asia leading to reduced demand. Consequently the reduction of electronics manufacture in Europe has been a significant factor in the decline of component sales in Europe in the three subsequent years after 2000. However, a small 3% recovery was reported in 2004. Furthermore, the industry has been particularly hit by falling prices resulting from Asian and American competition where, in the latter case, the falling value of the dollar had a significant effect. Despite some increases in unit sales, albeit at unattractive prices, manufacturers still found themselves with spare manufacturing capacity.

The pattern of polymer usage has changed and material formulations have had to be modified to conform with new European Union (EU) legislation...