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News Release from: Frost and Sullivan
Edited by the Manufacturingtalk Editorial
Team on 25 January 2005
Manufacturers' move to Asia needs supply
re-think
Shift of end-user manufacturing bases to Asia poses challenge to European-based suppliers of high performance polyamides who will have to re-think business strategies.
The shift of manufacturing bases from high-cost Western economies to lower cost countries in Asia by electrical and electronics (E and E), automotive, industrial and consumer goods industries is creating a grave challenge for European-based suppliers of high performance polyamides (HPPA) As altered consumption patterns accompany these structural changes in production, HPPA manufacturers are likely to be compelled to rethink current business strategies
This article was originally published on Manufacturingtalk on 28 Apr 2004 at 8.00am (UK)
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"Given that important customer groups are expanding their manufacturing in Asia, it will become more important for European-based HPPA suppliers to have a stronger presence in this region," says Frost and Sullivan Programme Manager Dr Brian Balmer.
Apart from geographical expansion, HPPA manufacturers are developing new products and applications to ensure sustained growth.
For instance, Atofina has introduced a new polyamide 12 grade with special properties suitable for use in motor vehicle gasoline hoses.
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In 2003, the European HPPA market was valued at EUR 354.4 million with total revenues projected to reach EUR 548.5 million in 2010.
One of the key drivers to market growth is there in the name - it really is the high performance of HPPA that is leading to them being used more and more.
Exceptional attributes, including toughness and heat resistance, relative ease of processing, enhanced design flexibility and lightness, are expected to underline the progressive replacement by HPPA of metal and other traditional materials (such as thermosets and rubber) across all sectors.
Trends in critical end-user sectors such as automotive and electronics are promoting demand for high-temperature materials, particularly for high-temperature polyamides (HTPA).
In the automotive industry, for instance, smaller engine compartments required for compact cars are motivating the growing uptake of HTPA at the expense of metal.
In electronics, the trend towards miniaturisation - particularly in the case of applications with electrical switches - is set to limit the usefulness of engineering plastics and make materials such as HTPA the preferred choice.
A strong performance by the HTPA segment - forecast to register a compound annual growth rate (CR) of 12.1 per cent for the period 2003 to 2010 - is, therefore, set to boost overall market expansion.
Amorphous transparent PA (ATPA) is also projected to experience above average growth rates over the long term with more moderate growth rates forecast for PA11/PA12 (currently the largest segment within the HPPA market) and for PA6, 12 (the smallest market segment).
Accounting for 47.1 per cent of revenues in 2003, automotive was the largest end-user sector for HPPA followed by industrial applications and the E and E sector.
Based on the excellent growth potential for high-temperature polyamides to increasingly replace metal in a range of demanding auto parts, the revenue contribution of the automotive sector is estimated to rise to 53.0 per cent in 2010.
With enormous cost pressure on suppliers to the automotive industry, developing appropriate pricing strategies will be critical.
"To remain profitable, the polymer suppliers must continuously lower their costs, and swiftly deliver innovation and expertise to enable the automotive manufacturers to improve their operations and end products," notes Dr Balmer.
At a broader level, the ability to supply on a global scale will be central to any successful market development strategy.
With high performance polyamide being a global market and with major end users expanding their manufacturing in Asia, European-based HPPA suppliers will need to focus on strengthening their competitive profile in the region.
Companies such as Degussa are already considering building new capacities in China.
Title: European Market for High Performance Polyamides Code: B411.
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