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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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