Rapid Growth for $775 Million Natural & Wood Plastic Composites Market

29 March 2003

Natural and wood fiber plastic composites (WPC) is among the most rapidly growing markets within the plastics industry. In 2002, these products continued their excellent growth with combined North American and Western Europe demand reaching 1.5 billion lb, valued at $775 million, according to a study recently completed by Principia Partners.

Natural and wood fiber plastic composites are manufactured by combining either wood or such other natural fibers as flax, hemp, jute, or kenaf with polymers including polyethylene, polypropylene, or PVC. In many cases either the polymer or the fiber, or both, can come from recycled materials.

Applications for these composites include a variety of building product, automotive, infrastructure, and consumer/industrial applications.

The North American market for WPCs is significantly larger than in Western Europe and accounted for over 85% of the combined demand or 1.3 billion lb in 2002. Building products is the largest market in North America and accounted for more than 80% of consumption for such products as decking and railing systems, window and door profiles, and shingles.

Infrastructure applications ranked second with over 125 million lb, primarily for boardwalks, docks, and related structures. Transportation applications ranked third and include automobile interior panels, rear shelves, and spare tire covers. The industrial/consumer segment includes WPC picnic tables, park benches, pallets and a variety of other products.

The total market for WPCs in North America is forecast to grow at an average annual rate of 14% through the remainder of the decade.

In Western Europe the market for WPCs is still very much in its infancy. However, WPCs have been widely used in European automobiles since 1992. As a result, transportation applications account for over half of Western Europe consumption.

However, the embryonic building products market which currently represents 30% of demand primarily for decking and window profiles, is expected to grow at over 30% per year over the next eight years. A significant portion of this growth will come from such new applications as door profiles, cladding/fascia/trim, and fencing/railings.

Overall, the Western European market for WPCs is forecast to grow at 18% per year through 2010.

More than 75 companies produce WPC products in North America and Western Europe. However, the top ten producers collectively accounted for 70% of total industry sales. Many of these are large publicly traded companies with significant advertising and marketing expenditures, but the market is also crowded with smaller privately owned firms that have developed the technology for captive use.

The diversity of industry rivals in both North America and Western Europe will continue to help the market grow.

Part of the excellent growth potential for WPCs is, according to Principia, because these products have only penetrated 4% of their addressable market potential. Overall, wood is the predominant material being replaced by WPCs, but other competitive materials include vinyl, fiberglass reinforced plastics, concrete, and aluminum.

Principia's new study, Natural & Wood Plastic Composites 2003, covers the markets for building products, automotive, infrastructure, and industrial and consumer in both North America and Western Europe. It includes estimates of current and future demand in each of these segments as well as technology developments, channels of distribution, competitive materials and profiles of leading producers.

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