Saint-Gobain's Opinion on the Worldwide Reinforcement Market

22 April 2003

In 2002, the worldwide glass fiber market for composites reinforcement was 2.2 million tons. Its average growth over the last 7 years (1996-2002) was 4.2%. The market peaked in 2000 and then experienced a severe downturn in 2001, followed by a progressive improvement in 2002.

These cycles are inherent to the glass fiber market, similarly to many other semi-finished product markets, and do not affect the fundamentals of the activity that remain very sound, at roughly twice the GDP of the industrialized countries.

In geographic terms, a balance has been reached between the three major zones: 33% in North America, 32% in Europe, and 30% in Asia. The dynamics are however in favor of Asia, which is experiencing average growth rates of 7%, while Europe is only at 4% and North America at 2%.

This phenomenon is linked to 3 factors:
- The local growth of composites consumption is much stronger in Asia than in Europe or North America, continents that are already well supplied.
- The outsourcing of certain activities, and in particular those concerning electronic applications (Printed Circuit Boards - PCB).
- Exports to the rest of the world, since it is currently in Asia that most of the new capacities are being built.

The notion of Asia covers nonetheless a very diverse reality, with countries:
- experiencing low growth but with a strong domestic market, such as Japan,
- more recently industrialized with growth rates that are still high, such as Korea or Taiwan,
- with very strong growth, such as China (15%), very attractive thanks to its huge potential market and its cost competitiveness.

In terms of processes, we should note the stronger growth of thermoplastic resin compounding compared with thermoset transformation processes. This is a constant in the three zones.

It should also be noted that the open mould processes still cover 19% of the world market. They have lost the most ground in Europe over the last few years, but remain strong in North America, thanks to the size of the marine sector.

As for final applications, it is the transport and CPW (Construction / Public works) markets that dominate in the European and North American zones. The latter has the particularity of having a marine market that is much more developed than in the two other zones. Conversely, the electronic markets have regressed in Europe and North America over the last few years and moved to the Asian zone, where this sector currently represents one third of the market. On the other hand, the modest size of the transport sector in Asia must be noted since it explains the relative weakness of thermoplastic resin compounding processes. This Asian transport sector is therefore one of the prime areas for composite development in the years to come.

Comments made by P. Gilard, World Customer Service Director, Saint Gobain Reinforcements.

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