The global aluminum foil industry has grown steadily over the past decade at a higher rate than the primary aluminum industry, reaching a production capacity of 4.6 million metric tons per annum by 2012. China dominates aluminum foil production globally, while western countries continue to be the largest consumers. The emergence of smaller aluminum foil producers in countries like India, the Middle East, and Southeast Asia has contributed to the shift of the industry away from capital-intensive hot rolling production methods toward cheaper, smaller continuous casting equipment. This has improved security of supply for smaller independent foil producers and custom finishers.

1. The Economics of SME Aluminium Foil Production

2. The global foil industry celebrated its 100 years of commercial
operations in 2010. At that time it was reported in a global Foil
industry conference in Bangkok that the industry is around 3.2 Mln
TPA strong and for the decade gone by, had maintained a steady
CAGR of 4%, a rate higher than the overall growth rate of global
primary aluminium industry. In 2012, the industry reported a
production capacity level of 4.6 Mln TPA or 17-18% share of global
primary metal production of around 48.3 Mln TPA. 75% of the overall
aluminium foil production globally continued to be used by the
packaging industry with the rest going to the industrial sector.
Interestingly, this proportion has remained the same over last 2
decades.

3. As in primary metal, China continues to dominate in aluminium foil
production. However, in terms of consumption, the western work
continues to be the locomotive of demand growth rate. During the
period 2010 to 15, along with China, the middle east too has emerged
as a significant green field producer and supplier of foil and foil stock
to the world market. While India and the SEA countries have always
projected great growth prospects, their share in availability and
consumption of foil is yet to even get close to the per capita
consumption rate of the developed world.

4. The dynamics of global foil industry has been experiencing similar
paradigm shift over the years as the primary industry continues its drift
east word. One of the major contributing factor in this has been
widespread acceptance of Continuous caster material as feed stock for
an ever growing list of foil application areas constraining growth of
capacity and demand from the capital intensive Hot Rolling route.
Along with, the increasing availability of cheaper and smaller capacity
core capital foil manufacturing equipment's from China, Taiwan and
India to name a few, the Capex for setting up foil mills has also been
coming down over the years.

5. Another contributing factor for strong emergence of the SME sector
in foil production, especially in the eastern hemisphere, is the
increasing tendency among primary aluminium producers worldwide
and especially in the middle east, to restrain their flat product
production at ‘Foil Stock’ stage and in not going full length in
producing the end use foils. This has considerably improved the
security of supply of feed material for smaller independent foil
producers and also further down the line independent customised
finishers who are the ultimate suppliers to the end user packaging
industry world wide.

6. It is now to be seen how better availability in terms of both volumes and
value of aluminium foils for the end use converters and consumers helps in
driving the overall global aluminium demand northwards and the next
generation of aluminium industry entrepreneurs take advantage of the
same!
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