The polymer compounding industry is a sub-sector of the plastics industry and is ancillary to the raw material suppliers such as Sasol and Exxon Mobil. This sub-sector manufactures specialty materials and additives as input to the plastics converters (film blowers for bags, blow moulders for bottles, injection moulders for plastic parts and products, etc).
The compounding sub-sector can again be divided into masterbatch compounders (e.g. colourants, anti-static and other additives) and toll compounders (e.g. raw materials for automotive parts and the cabling industry). XPI operates in the latter space where volumes are much larger and regular.
Calcium Carbonate filled (CCF) compounds are in the main supplied from China and India where economies of scale puts this product in a commodity bracket aimed at reducing converters input costs. In South Africa CCF’s are manufactured by the masterbatch companies on a smaller scale as subsidiary product due to lower gross margins – difficult to compete against imports.
It is estimated that the market potential is about 30,000t/a. XPI aims to become the first/premium supplier of CCF’s in Southern Africa by manufacturing these products on a large scale and becoming the leading specialists in this field. The target is to ultimately supply 50% of the market’s requirement.