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Composites Industry News

News for 2001


Polymer-Wood Composites Gaining Popularity

12th January 2001 0 comments

Composites of wood and PE, PP, or PVC are a hot topic in building products today. Polymer-wood composites are fast becoming an established category of building materials, particularly for decks, railing systems, and related outdoor structures. Wood and plastics are working together to create new performance properties previously unavailable to the building products industry. Suppliers now have to battle for position in this category, along with numerous other decking materials, including polymer-wood composites; plastic lumber; vinyl; pressure-treated pine; redwood; cedar; Ipe, Pau lope, and other exotic hardwoods; aluminum; and steel. The market for polymer-wood composites has reached 700 million lbs in North America in 2000 and is projected by Principia Partners to more than double by 2005. Decking applications — including deck boards, railings, stairs, docks and boardwalks — represent over 60% of the market demand. However, polymer-wood composites account for a small share of the more than 2 billion board-feet of all materials used in decks and railings. Dozens of companies — from plastics processors to building products companies to forest products firms — are battling for position in this growing market. “Having a product that addresses the needs of architects, builders and homeowners alike is vital to gaining share of the market,” according to Jim Morton, analyst at Principia Partners. “Equally important is a strong channel position.” In the building products industry, distribution channels are one of the most critical aspects to operating a successful business. A number of channels to market exist, including: traditional 2-step (distributor to dealer), direct to dealer (e.g., lumber yard, Big Box, hardware store), and end user direct (e.g., builders, homeowners). Each supplier must develop an effective channel to the ultimate end users, and provide that channel with the technical and customer support it requires. Competition for distributors and dealers can be intense, and a poor channel position can result in low sales volume and poor profitability. Suppliers that develop both a desirable product and an effective distribution strategy will have a competitive advantage, and realize higher margins on their sales. Understanding end user needs and channel dynamics is the first step toward building a successful and sustainable market position in this fast-growing building products segment. The driving forces behind the market opportunity for polymer-wood composites against a wide range of competitive incumbents is the subject of a new report titled WOOD COMPOSITES IN DECKING STRUCTURES-2001: BUILDING OF OUTDOOR LIVING AREAS. The study is the second detailed analysis of the polymer-wood composites industry by Principia Partners, the Exton, PA-based market research and business consulting firm. The study results will be available February 2001. This report provides a current and future perspective on the market for polymer-wood composites in decking and all related outdoor structures. Principia Partners is an international business consulting firm serving the building products, plastics, packaging, metals, and specialty chemicals industries. For more information about the new report on polymer-wood composites, visit www.principiaconsulting.com

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Hexcel Year-End results and 2001 Outlook

19th January 2001 0 comments

Hexcel Corporation yesterday reported results for the fourth quarter of 2000. Net income for the 2000 fourth quarter was $1.0 million, compared with a net loss of $2.7 million for the fourth quarter of 1999. Net income adjusted to exclude business consolidation expenses was $5.0 million for the fourth quarter of 2000, versus a comparably adjusted net loss of $1.2 million for the fourth quarter of 1999. For the year, net income was $54.2 million, compared with a net loss of $23.3 million for 1999. Net income adjusted to exclude business consolidation expenses and the $44 million after-tax gain from the sale of the Bellingham aircraft interiors business was $17.2million for 2000. Comparably adjusted net income for 1999 was $9.6 million. Mr. John J. Lee, Chairman and CEO, observed, “Fourth quarter operational performance was in line with our expectations. We began to make improvements in the performance of our engineered products business, but we still have a way to go to return this business segment to its historic performance levels. Revenues from the sale of electronic glass fabrics remained buoyant and commercial aerospace revenues showed some growth compared to the fourth quarter of 1999 on a constant currency basis.” Mr- Lee continued, “In 2000 we have seen the benefits from our strategy of growth from diversification, with electronics, ballistic protection, automotive and wind energy markets all contributing to increased profitability. In addition, we have seen the benefit from cost reductions resulting from our business consolidation and lean initiatives. Meanwhile, commercial aerospace market demand has stabilized, providing us with a platform from which to grow in 2001. The Bellingham transaction earlier in the year enabled us to significantly reduce the Company’s debt. All of these factors have contributed to the strong earnings improvement during the year.” This revenue growth primarily reflects:Increased sales of composite materials for use on certain space and defense programs, including military helicopter, transport and munitions programs.Continued growth in sales of lightweight reinforcement fabrics for use in multi-layer printed wiring boards, driven by strong worldwide demand for increasingly sophisticated electronic devices. Hexcel has undertaken an expansion of its lightweight glass fabric manufacturing capacity in order to satisfy customer demand for materials used in high-performance applications.Higher sales of reinforcement fabrics for soft body armor, and growing sales of composite materials to automotive, wind energy and ski and snowboard customers.Mr. Lee continued, “Like most companies we are carefully watching to see if changes in the global economy will affect the outlook for any of our markets in 200l. The most recent aircraft delivery projections from Airbus and Boeing suggest we can expect modest growth in commercial aerospace revenues during the year. The ramp up of funded new military aircraft programs should start to make a contribution before the end of 200I, despite continued weakness in satellite and launch vehicle markets. While the industry outlook for both the electronics and automotive markets is harder to predict, we continue to expect year-on-year growth from the sale of our products to these markets as well as the wind energy market. The consolidated effect of these trends is anticipated to be a return to revenue growth for Hexcel in 2001.”Hexcel Corporation is the world’s leading advanced structural materials company. It develops, manufactures and markets lightweight, high-performance reinforcement products, composite materials and engineered products for use in commercial aerospace, space and defense, electronics and industrial applications.

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China’s Ningbo to Construct Materials Industrialization Base

19th January 2001 0 comments

Ningbo City in East Chinas Zhejiang Province will construct a State-class new materials industrialization base, with the approval of the Ministry of Science and Technology. New materials play an important role in the city’s high tech industry, and the annual output value of the sector is nine billion yuan, accounting for 30 per cent of the total output value of high tech industry in the city. A number of competitive new materials products with high technical contents have been developed, they include neodymium-iron-boron permanent magnetic materials, superfine powder metallurgical materials, high-strength molded fiber materials, nanometer compound materials and new-type engineering materials. Ningbo will continue studying the development strategy for new materials industrialization base and give priority to industrialization of magnetic materials, high polymer materials, nanometer materials, and new energy materials in near future.

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Air France Flies Concorde for Tests

19th January 2001 0 comments

An Air France Concorde soared out of Paris yesterday for the first time since a tragic July crash and landed at a military base for tests aimed at returning the supersonic fleet to the sky. The flight came almost six months after the unprecedented crash of a Concorde on July 25. Two minutes after takeoff, the Air France jet plunged in flames into a hotel outside Charles de Gaulle airport. All 109 people on board and four people on the ground were killed. After the crash, the 12 existing Concordes, operated by Air France and British Airways, had their airworthiness certification withdrawn and were grounded until safety could be assured. British Airways last flew its Concordes in August. The only other Concorde flight since then was in September, when an Air France jet stranded in New York returned to Paris. In Istres, technicians from the plane’s manufacturer, EADS Airbus, are to conduct at least 15 days of high-speed ground tests on the aircraft that simulate fuel leaks, Air France executives said at a news conference Tuesday. The tests are intended to help the plane’s owner and manufacturer better understand the chain of events that led to last year’s crash. Investigators believe the accident happened when a metal strip lying on the runway gashed one of the Concorde’s tires, sending rubber debris hurtling toward fuel tanks and triggering a fuel leak and fire that brought the plane down. British Airways has begun outfitting one of its seven Concordes with new fuel tank liners, designed to contain fuel if the plane’s wing is ruptured. The liners, made of rubber and Kevlar employ technology currently used in military helicopters and Formula 1 racing cars. British Airways said this week that if tests were successful the supersonic jets might resume commercial flights by springtime. However, Air France has said it was still too early to set a timeframe.

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Aldila to Repurchase Up to 1.0 Million Shares of Common Stock

19th January 2001 0 comments

Aldila Inc. today announced that its board of directors has authorized the repurchase of up to 1.0 million shares of the company’s common stock (or up to 6.5% of the 15,462,204 shares currently issued and outstanding.) “We believe that the company’s common stock is undervalued at its current price and will represent an attractive investment opportunity for the company as well as its stockholders,” said Peter R. Mathewson, chairman and CEO. The shares will be repurchased from time to time in the market at then prevailing prices, depending on the market and general economic conditions, Aldila said. Aldila is the golf industry’s leading manufacturer of graphite golf shafts used in clubs assembled and marketed throughout the world by major golf club companies, component distributors and custom clubmakers. Aldila manufactures composite prepreg material for its golf shaft business and external sales, and through its ownership interest in Carbon Fiber Technology LLC, externally manufactures carbon fiber for internal use.

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PPG Reports On 2000

19th January 2001 0 comments

For all of 2000, PPG’s net income was $620 million, including after-tax charges totaling $38 million, to write-off an equity investment and rationalize the recently formed PPG Auto Glass automotive replacement glass distribution venture. Excluding the charges, net income was $658 million, Sales were a record $8.37 billion. Net income for all of 1999 was $568 million, including $79 million, in after-tax acquisition-related costs and restructuring charges. xcluding these one-time items, 1999 net income was $647 million. Sales were $7.76 billion. “Although sales for full-year 2000 were a record, several global economic developments combined to reduce earnings for the final quarter and year,” said Raymond W. LeBoeuf, PPG chairman and chief executive. “A significant downturn in the economy became apparent after mid-year. Our sales volume went from 6 percent growth in the first quarter to a reduction of 4 percent in the fourth. Natural gas costs increased significantly, reducing 2000 operating earnings by about $95 million. The weak euro adversely affected our results as well. “In response, we are now finalizing plans begun last September to implement additional cost reductions,” LeBoeuf continued. “In December, we said actions would be taken to reduce costs, increase efficiency and accelerate performance improvement. We also said we would incur pretax charges against first quarter earnings in the range of $50 million to $100 million as a result of thee necessary actions, which will include facility and job consolidations. We expect additional earnings to offset these charges within a year.” Fourth-quarter 2000 coatings segment sales declined 6 percent from the year-ago period, largely on lower volume and currency translation for most businesses. Aerospace coatings and sealants volume grew. PPG’s glass segment experienced its strongest sales and operating earnings in several years in the fourth quarter despite a decline in original equipment auto glass volume. Sales grew for other glass and fiber glass businesses, particularly auto replacement glass. Gains in manufacturing efficiencies were achieved across the segment.

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Primix Strengthens Management Team With New President

19th January 2001 0 comments

The Primix Corporation, manufacturer of the revolutionary “Primix Engineered Composite Railroad Tie”, is pleased to announce today that it has hired Jack M. Payne as the company’s new president. The president of Primix is responsible for such duties as domestic and international sales/marketing, business development, investor relations, and the day-to-day operations of the company. The president of Primix reports directly to the Chief Executive Officer and the Board of Directors. Marc Shea, CEO of Primix Corporation stated, “We could not have asked for a better addition to the Primix management team. Jack not only brings a great deal of experience from the railroad industry, but he has a background on the environmental side of this business that exemplifies the advantages of the Primix Tie. We expect Jack to be a tremendous advantage in capturing a good portion of the $14 billion worldwide railroad tie market as well as strengthening Primix’s relationship with Mitsubishi due to his international experiences.” In addition, Primix has been actively shipping sample ties to General Motors plant spur lines, Ralston Purina plant spur lines and is finishing production of sample ties that have been requested by Union Pacific.

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U.S. Plastic Lumber Corp. Secures Equity Commitment

19th January 2001 0 comments

U.S. Plastic Lumber Corp. announced it has entered into a common stock purchase agreement with Fusion Capital Fund II, LLC, a Chicago based institutional investor, whereby Fusion Capital shall buy $6 million of USPL’s common stock. In addition, the Company has the option to require Fusion Capital to enter into a second identical common stock purchase agreement for the purchase of an additional $6 million of its common stock. The aggregate equity committed to the Company by Fusion Capital is $12 million. Proceeds from the common stock purchase agreement will be used for working capital to support USPL’s recycled plastic lumber division, as it enters the 2001 building products season, and USPL’s environmental division, which has a record backlog in excess of $120 million, entering this year. Mark Alsentzer, Chairman, President and CEO of USPL, said, “This capital commitment demonstrates significant confidence in the future of USPL and its management team and provides us additional flexibility and greater financial security.” USPL creates high quality, competitive building materials, furnishings, and industrial supplies by processing plastic waste streams into purified, consistent products. They include such brand names as Carefree(R), SmartDeck(R), RecycleDesign(TM), TriMax(R), Earth Care(TM), and OEM products including Cyclewood(TM).

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Cambridge SoundWorks Shipping Composite Speaker Line

19th January 2001 0 comments

Cambridge SoundWorks(R), a multi- channel audio and video manufacturer and retailer, today announced the shipping of its new Newton Series(TM). The Cambridge SoundWorks’ Newton Series is a line of high performance speakers that combine high quality sound and high-end style, but are priced less than comparable models costing upwards of $5,000 or more. The speakers feature glass-reinforced polymer construction. Cambridge SoundWorks, Inc. manufactures over 60 different models of home stereo, home theater, multimedia speakers and assorted electronics products.

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Cytec Initiates Natural Gas Surcharge on Melamine Crystal

19th January 2001 0 comments

Cytec Industries Inc. announced that due to unprecedented price escalation of natural gas feedstock in the U.S., effective immediately or as contracts permit, Cytec Industries Inc. is implementing a natural gas surcharge to be added to its January 2001 melamine prices. Cytec Industries is a specialty chemicals and materials technology company with 1999 sales of $1.4 billion. Its growth strategies are based on developing technologically advanced customer solutions for global markets, including: aerospace, plastics, industrial coatings, mining, and water treatment.

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