Global Composites: Three Big Predictions for 2013

Emerging Emerging Trends in theTrends in theGlobal Composites IndustryGlobal Composites Industry

About Sandeepan

Sandeepan Mondal

Industry Analyst – Chemicals, Materials & Foods

Frost & Sullivan

• Experience in tracking global markets related to polymers, composites,

lubricants, biomaterials in different application sectors such as automotive,

aviation, high speed rail, marine and building and construction

• Involvement in many high-value consulting assignments related to new

product potential, market size estimation and forecasting and competitor

benchmarking

• In my spare time I’m a leading cricket enthusiast, an award winning quizzer

and enjoy travelling, photography and reading.

Four Signs A Composite Manufacturer Might Need to Reinvent its Business Model

Demand fluctuation in

certain sectors

•The economic recession in 2008-2009 was a game-changer as it led to some of the end-user sectors being heavily affected.•Companies need to hedge risks by spreading their supply to varied sectors

Regional demand Dynamics

•10 years ago, it was US, Japan and Europe which were leading growth figures for composite demand across sectors•There is now a regional shift towards Asia in terms of both supply and demand when it comes to composites and its raw materials

Technology as a disruptor

•Technological advancements in terms of automation and fabrication methodology have resulted in lower cycle times and lower costs of manufactured parts.• Companies need to incorporate technology as a tool to expedite their expansion across industries using composites

High Level of consolidation in

End-user Industries

•The marine industry, for example, 2008-2009 saw the exit of many boat builders which were acquired by larger companies.•The aerospace industry now relies on a few suppliers (both Tier-I and composite suppliers) to manufacture parts and components•Maintaining client relationships is of paramount importance as bargaining power of buyers has increased substantially.

Three Big Predictions for 2013

2Closed molding and out-of-autoclave techniques are expected to be a

major enabler for high throughput rate of composite parts and components

1The automotive sector is expected to remain as the largest market for

composites globally, since fiber-reinforced thermoplastics are used on a

large-scale in this market

Source: Frost & Sullivan analysis.

2major enabler for high throughput rate of composite parts and components

3Asia-Pacific and China, in particular, is not only expected to be major

production hub for raw materials concerning composites, but also

substantial in terms of demand across sectors.

Sector-wise Composite Demand

$24.7 B Global Composites Market Sector Share

Total Composites Market: Segmentation by Sectors, Global,

2012

3.8%

0.1%14.2%

4.0%

0.1%

16.7%

Total Composites Market: Segmentation by Sectors, Global,

2018

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan analysis.

80.8%

1.1%

3.8%

Automotive

Commercial Aviation

Marine

High Speed Rail

Building and Construction

78.0%

1.2%

4.0%

Automotive

Commercial Aviation

Marine

High Speed Rail


Note: Other sectors like other aerospace, other transportation, sporting goods, wind

energy, oil, gas & offshore and civil engineering are not taken into account here.

Growth Opportunity Matrix for Composites

4.0%

6.0%

8.0%

10.0%

Automotive


Commercial Aviation

Marine

Vo

lum

e C

AG

R (

20

12

-20

18)


-4.0%

-2.0%

0.0%

2.0%

0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 35,000.0

High Speed Rail

Revenues in 2018 ($ Million)

Vo

lum

e C

AG

R (

20

12

Consumption Patterns by Resin and Fiber Type

Resins and Fibres consumption patterns in composites across sectors

Automotive

Commercial

Aviation

Marine

Low Very Low Very Low Negligible Very High High Low Very Low

Low High Low Very Low Low Medium High Low

High Medium Low Low Very Low Very High Very Low Very LowMarine

High Speed Rail

Building and

Construction

UPRs &

Vinyl

Esters

Epoxies Phenolics Acrylics Thermo

plastics

Glass

Fibres

Carbon

Fibres

Others*

High Low Medium Low Medium High Very Low Negligible

High Medium Low Very Low Low Very High Very Low Very Low

Source: Frost & Sullivan analysis.*Others include aramid fibres, natural fibres and boron nitrides

Regional Trends in Global Composites Market

Composites in North America Europe ROW

Automotive 25% 24% 51%

Commercial Aviation 40% 45% 15%

Marine 50% 30% 20%

High Speed Rail 3% 17% 80%

Building and Construction 45% 30% 25%

Source: Frost & Sullivan analysis.Note : All figures are rounded. The base year is 2012.

The CEO’s Perspective

2Fabrication costs would come down

with process innovations

1

Reducing margins need to be taken

care of by either increasing prices

or/and shifting production base to low-

cost centers

3Advanced composites like CFRPs are

likely to be used on a large-scale only

in commercial aviation or aerospace

4GFRPs are likely to dominate for the

next 10 years in almost all sectors

5Competitors should focus on demand

emanating from Asia-pacific


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Chiara Carella

Corporate Communications

Chemicals, Materials & Food

+44 (0) 207 343 8314 [email protected]

Sandeepan Mondal

Industry Analyst

Chemicals, Materials and Foods

(91)-80-6702-8070

[email protected]