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High Performance Polymers

November 11, 2008

As plastics producers struggle with a slowing economy, rising raw material prices, and increasing competition, the one bright spot in this industry continues to be that of high performance polymers (HPP). This category has evolved rapidly over the past few years and today stands as a $6.1 billion industry, projected to grow at a CAGR of 6.1% over the next five years. A new global market study by Principia Partners provides a baseline for this industry that spans across nine different high performance polymer families serving eight different end-markets and presents an in-depth and critical analysis of the industry.

Ashish Aneja, a Principal at Principia explains, “We have provided extensive depth in this assessment to identify new applications and customers for high performance polymers throughout the industry. High performance polymers continue to exhibit a growth rate that surpasses growth in GDP. New companies entering the high performance polymers industry, new polymer introductions, and inter-material competition with metals make the field interesting for suppliers.”

There are eight end-markets analyzed in the study that consume different kinds of high performance polymers for various applications.

— Aerospace and defense, an end-market valued at $290 million for high performance polymers that has ever-increasing requirements around flammability, smoke, and toxicity, and is projected to grow at a CAGR of 7.1% to 2012

— Automotive, an end-market that consumed $1.3 billion worth of HPPs in 2007, is forecasted to grow at 5.7% over the next five years with continued metal replacement and to address increasing temperature performance requirements in engine compartments

— Computers and peripherals accounted for $180 million of HPP consumption, projected to grow at 8.3%, where key issues include miniaturization and related heat management, and also increasing use of multi-function products that combine printers, copiers, and fax machines in a single device

— Consumer, where HPPs are used in a wide range of applications such as appliances, cookware, sporting goods, and other household items, is estimated to be valued at $420 million and growing at 5.2%. This area’s growth has been dampened by the economic slowdown but new application development continues at a rapid pace

— Electrical and electronics, the largest end-market for HPPs valued at $1.8 billion and forecasted to grow at 6.8%, where regulation along with increasing demand for electronic devices are some of the growth drivers for increased consumption of HPPs

— Industrial, that primarily includes chemical processing, oil & gas, food processing, power plants, and water treatment is estimated at $1.4 billion of HPP consumption growing at 5.6%

— Medical, valued at $290 million is projected to grow at 8.7% with HPPs being used in applications requiring strength and stiffness, sterilizability, and biocompatibility

— The study also estimates other application areas, for example the use of HPPs in coatings for building and construction, and is valued at $390 million in 2007

Although the majority of high performance polymers continue to be molded, other forms such as films, fibers, stock-shapes, and coatings are expanding the reach of high performance polymers. The high performance polymers value-chain, from polymerized resins to articles of usable forms, is estimated to exceed $14 billion.

Dr. Aneja continues, “The analysis details global shifts in supply-demand balance as well as differences between points of specification and consumption. For example, while China is exhibiting high growth in demand for high performance polymers, most suppliers have been reluctant to add polymerization capacity in the region. Companies are cautiously entering the Chinese market with compounding operations and sales and marketing offices in the region before committing to resin production in China.”

The growth in demand for high performance polymers is delineated as a function of the underlying market growth, new application development and specification, minus the attrition, for each polymer. While certain polymer categories, such as fluoropolymers are witnessing relatively lower growth due to a slowdown in application development, other categories such as LCPs are projected to be the fastest growing based on widespread use in electrical and electronics.

Principia’s study serves as an important baseline analysis for forecasting and business planning purposes by existing and new industry participants. Using 2007 as the baseline, the study analyzes the drivers and trends of the high performance polymer market by region, product type, market segment and major application area, and provides forecasts covering the next five years.

Results of the report will provide subscribers with critical market data and analyses essential for planning purposes including:

— Up-to-date assessment of the high performance polymer end-markets

— Assessment of the major products

— Identified product development needs

— Market share review for producers

— Profiles of over 25 companies active in the business

— Strategic insights into this dynamic industry

Principia Partners is a leading international strategy consulting firm, and has extensive experience in the plastics and specialty chemicals industries. In particular, the Firm has closely monitored the market for plastics and specialty chemicals over the past 10 years through various research efforts. For more information, visit the Industry Reports section of the Publishing portion of the company’s web site at www.PrincipiaConsulting.com. A prospectus of this study is also available by calling Ashish Aneja at 800/378-8330, extension 252.

 




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