Plastics industry expects the upturn in the construction sector

Few customer industries have been hit as heavily by the 2009 economic crisis as the construction sector. Sales of pipes, profiles and boards have fallen dramatically. Not only manufacturers of semi-finished products, but also plastics processers and machine manufacturers have experienced a significant drop in business. By the time of K 2010, the world’s leading trade fair for the plastics industry taking place in Düsseldorf from 27 October to 3 November, manufacturers of pipes, profiles, boards and insulating materials are hoping for a revival of business.

The current market situation is difficult to assess. Although few precise figures are available, it looks as if the crisis bottomed out in mid-2009 and the market then stabilised at a low level. If the US market is taken as an indicator, a study published by the Freedonia Group market research institute (Cleveland, Ohio, USA) at the beginning of 2010 gives cause for hope. Nevertheless, say the market researchers, global growth in the construction industry from 2008 to 2013 will fall well short of that from 2003 to 2008, averaging 2.9% per year compared to the previous period’s annual average of 7%. According to Germany’s KI Kunststoff Information, the information service for the plastics industry, a moderate decline is expected in Western Europe for 2010, with recovery not on the horizon until 2011.

If one considers the market situation for certain products, it is noticeable that business with profiles has slumped to a greater extent than with pipes and both are much worse off than business with panels for insulation. The latter has benefited from growing environmental awareness and government grant programmes for thermal insulation projects – specifically in the developed countries of Western Europe and the USA.

Insiders have identified two main reasons for the nosedive in the profile markets, where falls of up to 70% for 2009 have been reported. These are the strong dependence on a single product, the main profile for windows, and the fact that demand from Eastern Europe, and primarily from Russia, has dwindled almost to nothing.

PVC remains the top choice

Overall, European manufacturers of window profiles processed over 1.6 million tonnes of PVC in 2008 and generated sales of over EUR 4 billion with their over 20,000-strong workforce. The industry’s latest developments include coloured profiles, profiles with more than five chambers and installation depths of over 80 mm, and profiles with a core layer of recycled material. Demand for these profiles is mainly being fuelled by the desire for energy savings. In Eastern Europe demand is mainly for standard white windows. For hotter climate zones, Solar Shield Technology (SST), for example, is making a name for itself, exploiting the reflective properties of colour pigments to reduce heat irradiation and enabling film-Iaminated profiles to take exposure to temperatures exceeding 70°C in their stride.
Despite many product innovations, business with PVC profiles has suffered massive drops in sales over the last year and a half. To equip themselves for the future, a number of companies have opted for strategic mergers and alliances. There is a trend towards complete production lines with a good price-performance ratio and well-balanced, single-source machine solutions.
In Germany, about 80% of all old windows are now recycled. This integrated approach offers the PVC industry and PVC applications in the construction sector new opportunities for the future, not only in Germany and Europe.

WPC profile market continues to grow

Wood-plastics composites (WPC) are still undergoing major further development and showing potential for growth. According to nova-Institut GmbH in Hürth, Germany, these alternative products are enjoying growing quantity sales even in the crisis. Today, it says, over 1.5 million tonnes of WPCs are already being produced worldwide, above ali in North America (roughly 1 million tonnes), China (200,000), Europe (170,000) and Japan (100,000). In Europe, Germany at 70,000 tonnes is the leading producer and also the leading machine manufacturer.
While in the USA WPCs are mainly used as construction products for decking, fencing, railing and siding, their applications in Europe also extend to the automotive industry and other sectors. Here, too, however, the main product is the floorboard (decking), which is achieving double-digit annual sales growth.

Multi-Iayer set to become the standard for pipes

16 million tonnes-of plastics were processed into pipes worldwide in 2008. Here, again, PVC is the preferred raw material with a share of about 65%, followed by PE and PP. With rising raw material and energy costs and increasingly tough requirements in terms of pipe functionality, there is growing demand for multi-Iayer pipes, such as HDPE pressure pipes with an external PP layer as protection from shock and impact loads. Thanks to their adaptability to various process tasks, plastic pipes are conquering more and more fields of application.
Suppliers of pipe extrusion lines are focusing not only on changing requirements, but also on energy-saving and efficient lines with high cost effectiveness. They have thus developed special cooling systems, for instance, which halve the cooling section or double performance or which boost output while simultaneously improving pipe quality.
These and other novelties will be on show from 27 October to 3 November at K 2010 in Düsseldorf. The world’s leading trade fair for the plastics industry will be presenting a complete overview of the production of plastic pipes, profiles, boards and insulating materials for use in the construction industry.