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Global demand for geosynthetics to increase 8.3% pa in 2015

Global demand for geosynthetics to increase 8.3% pa in 2015

Worldwide demand for geosynthetics is projected to increase 8.3% pa to 4.5 billion square meters in 2015, as per Freedonia. This growth rate is an acceleration from the gains of the 2005-2010 period, reflecting in part the reduced 2010 bases of the developed countries. Advances are being driven by the increasing market penetration and large-scale construction plans in place in many developing countries. In 2010, North America was the largest regional market, accounting for 31% of global sales. The US is the world�s largest individual country market, with one-quarter of total sales. Growth in North America benefits from the massive size of its construction sector, which is expected to rebound through 2015 from a low 2010 base, as well as the need to maintain its large transportation infrastructure. Gains are also aided by the region�s building codes and environmental protection regulations. The Asia/Pacific region was only slightly smaller, accounting for 30% of global geosynthetics sales in 2010. However, this region is projected to achieve the fastest growth rate through 2015, primarily driven by China, which is expected to account for nearly half of new global demand generated between 2010 and 2015. China�s gains are primarily due to amount of available land, its ongoing development of large-scale infrastructure projects, and the need for erosion control. India is also expected to post double-digit annual growth through the forecast period, with sales nearly doubling by 2015, albeit from a much smaller base. In many of the least developed countries, however, growth for geosynthetics will be more limited, due to lack of adequate funding, a lack of regulations that require their use, and the presence of lower-cost alternatives. Western Europe and Japan are fairly comparable to the US in terms of the level of maturity of their respective geosynthetics markets, as well as the type of regulatory environment. Both of these areas are expected to rebound from reduced 2010 bases, benefiting from improved construction activity and high level of concern for environmental protection. Gains in these areas are forecast to be the slowest among all regions through 2015, indicative of Western Europe and Japan�s relative maturity. However, the affluence of these countries allows them to use advanced geosynthetic technologies despite their larger upfront costs.

In 2010, the construction market accounted for the largest share of geosynthetics sales with 34%. It will also register the fastest gains through 2015, albeit from a reduced 2010 base, as construction activity improves. This market benefits from factors such as the passage of environmental regulations, including those regarding sedimentary runoff from construction sites, as well as the increasing need for erosion control and other practices to protect against soil loss in a growing number of countries. Transportation infrastructure, the second largest market in 2010 (28%), is expected to post above-average gains through 2015 aided by the increasing use of geosynthetics in these projects, and the ongoing extension of paved roads and railways. The landfill market is another key area for geosynthetics as a growing number of countries adopt modern landfill designs and operations.

The use of geosynthetics�geotextiles, geomembranes, drainage composites and geogrids�is an annual growth market in the U.S./Canadian specialty fabrics industry, as per IFAI Market Research. Prior to 2009, the U.S./Canadian geosynthetics market grew 5-6% pa before the economic debacle of 2009. In 2009, the use of geosynthetics declined about 5% in the U.S. and Canada; but growth rebounded to about 2% in 2010.

Developments driving optimism in the U.S. market for geosynthetics include:s

  • The U.S. EPA announcing in the spring of 2010 that it plans to regulate coal ash containment sites, requiring that all sites be fitted with liners (geomembranes); the result translates to US$300-350 mln for the geosynthetic industry over the next 5-7 years
  • Improving U.S. GDP growth to 2.8% in 2010 after achieving an abysmal negative 2.6% in 2009; U.S. GDP for 2011 is projected to reach 3.3 to 3.6%

Constraining growth:

  • Continued high unemployment in the U.S., which averaged 9.6% in 2010
  • Rising oil prices in 2010 and 2011 will continue to lead to higher prices for raw materials such as polypropylene, polyethylene, etc.
  • Local government reduced budgets that curtail funds available for geosynthetic usage in key markets like road and bridge construction

The 2010 U.S./Canadian geosynthetics market improved moderately in terms of sales and general business conditions. The majority of geosynthetic suppliers/distributors are optimistic that 2011 will yield increased sales and an overall improvement in general business conditions.

 
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