Production of thermoplastic compounds growing in Central Europe

11-Sep-08
Production of thermoplastic compounds growing in Central Europe as per a report by Applied Market Information Ltd, as the industry continues to shift eastward with most of the new sites listed in the guide setting up in Central Europe. Within Western Europe there has been less change compared with previous editions, but there has been a drop in the number of UK and Italian sites. The industry has enjoyed a period of good growth driven by strong demand for technical polyolefin and engineering compounds replacing metals and other traditional materials in automotive and electrical applications. This has been particularly significant in Central Europe because of the large amount of investment in automotive production and electrical goods manufacturing but Western European demand has also grown steadily. The PVC compound sector has continued to advance modestly as demand for profile compound has gone up. The only negative area for the compounding market has been a decline in the production of the larger volume colour compounds with these products being replaced by masterbatch. While colour compounds still tend to be used for technical polymers and for pipe/cable grades of polyolefin materials, the market continues to be eroded by competing products such as masterbatch and liquid colour and by the trend among resin producers to move away from providing a variety of compound grades to supplying to the processor standard grades with a masterbatch. The Central European countries of Poland, Hungary, Czech and Slovak Republics and Romania account for about 6% of the total volumes produced in Europe. The market in Central Europe is substantially different to that in the West with a higher proportion of PVC compounds being manufactured compared with most other types. Almost half of all compound production in Central Europe is for PVC types. Most of this is controlled by the PVC manufacturers, i.e. Anwil in Poland, Borsodchem in Hungary, and Spolana in the Czech Republic. Most other compound markets are relatively small and underdeveloped compared to Western Europe. Colour compound production is limited, with most processors using masterbatch. There is also growing demand for technical and engineering compounds driven by investments in automotive, domestic appliance and electrical goods manufacturing in the region. The leading technical compounders are Silon in the Czech Republic, Inno-Comp in Hungary and Rhodia and Zachem in Poland. Most of the leading masterbatch producers are part of Western groups now including Clariant, PolyOne, Schulman and Ampacet. Overall the distribution of compound production in Europe largely follows that for polymer demand. Thus Germany and Italy account for the largest volumes of output. However, the relative importance of the Benelux region is noteworthy. This is a result of the location of several major multinational compounding groups in the area, such as Cabot and Schulman, as well as the high concentration of resin production and associated compounding. In both cases this has largely arisen because of the Benelux's central location within Europe and its suitability for exporting throughout the region. Of the compounding sites recorded in the guide, nearly 100 are integrated into polymer production, with the remainder independent. Resin producers have traditionally been involved in compounding in order to aid product development, to add value to the resin and to maintain product quality. Generally these companies tend to be involved supplying the larger accounts in film, pipe extrusion or blow moulding. While integrated compounders account for only around 14% of compound operations in Europe, in volume terms they are vastly more significant with a market share of approximately 50% in 2007. Furthermore, it is expected that the market share of these compounders will grow in all sectors at the expense of the independents. The nature of the compounding industry reflects the needs and requirements of the larger end users which are becoming more international and require globalisation of their supply chain. (Press Release)
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