JEC COMPOSITES MAGAZINE - Issue #38 - January/February 2008 - 24

BUSINESS Market survey: Asia Asia-Pacific: about 50% of the composite industry by 2015 As the global composite industry develops to keep up with its downstream industries, markets and production sites are moving to the Asia-Pacific region, especially China. With this as a given, JEC Group has put out a study called “Main Dynamics of the Composite Industry in Asia-Pacific”. Here are a few excerpts from it. ith annual growth at 10%, the Asia-Pacific region will generate an estimated 64% of the composite industry’s global growth in value for the 2005-2015 period. This means that by 2015, that region will account for about 50% of business in the composite industry, compared to 36% in 2005. Location and the technical level of production will determine the future of the composite industry in AsiaPacific. High-tech value-added activities are now developing in Asia, and by 2015 that region should account for 10% of that type of value-chain step globally. The annual growth of low-tech value-added activities in Asia-Pacific for the same period is estimated at 8%, meaning that the region should generate about 46% of value for that type of activity by 2015, compared to 36% in 2005. W Fast growth in volume Global annual market growth from 1999 to 2005 in terms of volume was 4.1%, with Asia-Pacific (especially China) in the lead with 10%. This worldwide growth in volume accelerated between 2001 and 2005 to reach 6.3% per year. Europe and North America, on the other hand, registered slow growth (1.1% per year) for that same period. The growth observed in Asia-Pacific for the period far exceeded worldwide growth in every category of composite application, from transportation to consumer goods, aerospace, wind energy, pipes & tanks, construction, and electrical & electronic equipment. To take one example, the marine composite market grew an average 14.2% per year in Asia-Pacific, compared to 2.5% globally. In terms of volume, the composite industry has grown at the same pace as the industrial GDP on every continent. The substitution of competing materials like steel and aluminium with composites is no longer a significant factor, except in Asia and in the aerospace sector. Compared to the past 20 years, this is a recent trend and reflects a maturing composite industry. Industrial activities are being relocated to Asia more and more, especially China, as the composite processing industry follows its downstream industries. For example, 39% of global automotive production was manufactured in Asia-Pacific in 2005, compared to 29% in 1998. Within the Asia-Pacific region, China generated 28% of Asian production in volume in 1999, but with its 19% annual growth, it was generating 44% by 2005. China’s more than healthy growth compensated for Japan’s meagre 1%; Japan’s share of the Asian composite industry declined from 37% in 1999 to 22% in 2005. More generally speaking, China accounted for 16% of the worldwide composite industry in volume in 2005, compared to 7% in 1999. There have been no major process changes in AsiaPacific over the past five years, although a slow trend towards more automated processes is continuing, more rapidly in the marine industry. annual growth, compared to 20% for their Asian competitors. The Asian market is highly fragmented, with many small companies, however. For instance, China is home to 2.000 composite processors and, on the rawmaterials side, over 240 glass-fibre producers – although the market is consolidating around large players such as Jushi, CPIC, Taishan, or even Saint Gobain, which has bought more than 40 Chinese factories and companies over the past few years. Composite penetration by application The Asian automotive market is a good example of potential opportunities in the field of composites; it grew 8% per year from 1999 to 2005, compared to Asia’s overall composite industry at 6% for the same period. In 2005, the Chinese automotive industry used 20% fewer composites than the U.S. or European automotive industries. This means that composites have a strong potential for further penetration in Asia in the coming years, once the composite industry is structured enough and the automotive industry more mature. This is true for most composite applications in Asia. More information: www.jeccomposites.com Contact: germain@jeccomposites.com Profitability and growth for Asian players The reason Asian composite players have grown much faster than their European or North American counterparts over the past five years is the dynamic growth of many applications in the Asia-Pacific region. During that period, European and North American players recorded only 0-5% JEC Composites Magazine / No38 January - February 2008

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JEC COMPOSITES MAGAZINE - Issue #38 - January/February 2008

Table of Contents for the Digital Edition of JEC COMPOSITES MAGAZINE - Issue #38 - January/February 2008