PP2-029 V1N1Feb02 - Natural Wood Fibre & Composites

COPYRIGHT 2002 PRINCIPIA PARTNERS

Inside this Issue...

Natural fiber composites seegrowing use in autos Page 2

Auto build rates expected torebound in 2002 Page 2

EPA and wood treaters agree toeliminate CCA Page 3

Retailers prepared to sellalternative materials Page 3

Treaters ready to switch to CCAalternatives Page 4

Marth starts second wood fiberplant Page 4

News from the InternationalBuilders Show Page 5

AERT secures Lowes deckingbusiness Page 6

Events calendar Page 6

Principia Partners completesstudy of additives Page 7

In the next Issue...

Additives suppliers deliverinnovation to boostperformance and lower cost...

Housing starts and the impacton demand for woodcomposites...

Natural and wood fibercomposites expanding intooutdoor living accessories...

NATURAL & WOOD FIBER COMPOSITESNATURAL & WOOD FIBER COMPOSITESFebruary 27, 2002 Volume I, Number 2

Automakers Driving Use of Natural Fibers Increasingly Replacing Mineral and Glass Polypropylene

The use of natural fiber composites in automobiles is not new-Henry Fordbegan using the materials in interior applications in the early 1930s. Today,automotive OEMs and the major Tier 1 producers are working hard to harnessthe advantages that natural fibers offer and put them to new uses.

Natural fiber-based polymer composites are proving to offer much more than ameans for automakers to demonstrate the use of eco-friendly materials. Theyare realizing the added benefits of weight reduction, while offering goodmechanical properties previously seen only in mineral-filled plastics or glassfiber-reinforced composites. The natural materials are delivering as much as25% improvement in strength and flex modulus compared to some of theincumbents used over the past 20 years.

Demand for natural fiber composites in the transportation market has increasedfrom 6 million lb in 1998 to nearly double the volume in 2001. PrincipiaPartners projects that the demand will increase to 32 million lb by 2003 asmore car platforms implement the use of parts designed in the late 1990s.

Parts that will experience the most growth in usage of these materials includeinstrument panels, door panels, bootliners, parcel shelves, dashboards andother interior trim. Designers are alsobeginning to work on exterior partsfor underhood and underbody of thecar. For example, DaimlerChryslerwill equip the new Mercedes-BenzTravego travel coach with a naturalfiber-reinforced engine andtransmission cover as standardequipment, the first natural fiber-reinforced exterior vehicle componentto go into production.

The choice and preference of natural fibers differs somewhat among theautomakers. However, all automakers are investigating the advantages anddisadvantages of these materials. Ford has focused its work on bast fibersincluding hemp, jute, ramie, and flax. DaimlerChrysler has focused its effortson flax and sisal fiber in polyurethane resins. A continued concern is thevariation in material consistency. New fiber processing technology tominimize the variation continues to be developed.

Next-generation development goals will drive the use of co-mingled fibersystems. Natural fibers will be used in conjunction with glass and othersynthetics to tune the thermal and acoustic performance of interior parts. Forecasts indicate that vehicles made in the U.S. in model year 2006 willconsume 50 million lb of natural fiber composites.

Vol. 1, No. 2/Page 2 NATURAL & WOOD FIBER COMPOSITESNATURAL & WOOD FIBER COMPOSITES February 27, 2002


NATURAL & WOOD FIBER COMPOSITESNATURAL & WOOD FIBER COMPOSITES

For Subscription or Editorial inquiries:James T. Morton, EditorP.O. Box 611Exton, PA 19341717-741-3565; 484-214-0172 (Fax);[email protected]

Natural & Wood Fiber Composites is published 12 times ayear by Principia Partners. World rate is US$700; discountavailable for electronic delivery. A subscription entitlesreaders to share this newsletter with any colleagues at thesame physical address. Please contact publisher foradditional off-site subscriptions.

Publisher and Editor-in-chief James MortonCopyright 2002 Principia Partners All Rights Reserved.

www.principiaconsulting.com

Auto Industry News

Auto Parts Use Natural SolutionStrong Growth Expected to Continue in 2002

Leading parts producers are excited about the strongautomotive sales forecast and the greater number ofprograms implementing natural fiber composites.

Flexform Technologies (Elkhart, IN), formerly KafusBio-Composites, a leading producer of composite sheetexperienced significant growth in 2001, with salesdoubling since 2000. It expects additional growth of75% in 2002. Flexform is in the process of expandingits plant from the original 55,000 SF to nearly 150,000SF in 2002. The greater manufacturing capability willenable it to support and grow its programs with leadinginterior parts manufacturers like Findlay, JCI, andVisteon. The company is working with Delphi andJapanese and European Transplant suppliers as well.

JCI (Holland, MI) purchases sheets of long fiber hempand kenaf reinforced PP which it uses to compressionmold interior parts. Larry Cross, JCIs Sales Managersays, The use of natural fiber composites in Daimler-Chryslers 2001 Sebring convertible has been asuccessful program as a door trim panel part. Thissuccess has lead us to using the material in instrumentpanel parts for the GM Saturn 2002 SUV..

JCI also continues to work with wood fiber compositesin its Battle Creek, MI facility for parts includingpurse/map shelves and door trim. Its joint venturecompany with Toyota, Trim Masters (Harrodsburg, KY)works with both wood and natural fiber based products. Mr. Cross states, No new wood fiber compositeprograms are underway, but evaluation in other naturalfiber composite parts for various automakers is ongoingat both the MI and KY facilities.

Harry Hickey, Flexforms Sales and MarketingManager, states Our growth has required us to obtainkenaf fiber from crop fields outside of Texas. We haverecently secured additional crop fields in NorthCarolina.

Flexform is remaining focused at this time on kenaf andhemp. It has not commercialized flax fiber, butperiodically will use jute fiber. The company has alsobegun to introduce compounded sheet for exteriorpanels and other parts for the RV and furniture partsindustries.

Flexform: Harry Hickey, 574/295-3777JCI: Larry Cross, 616/392-5151

Automakers Cautiously Optimistic2002 Sales Rebounding

GM and Ford are raising U.S. automotive sales forecastsfor 2002 on the strength of continuing consumerconfidence. Economists from General Motors and Fordare optimistic that the recession is over. G. MustafaMohatarem, GMs chief economist says, We clearlyseem to have a global recovery under way with theUnited States leading. Economic indicators suggest thedeveloping strength of the U.S. economy can besustained throughout calender year 2002.

Overall, the Big 3 producers are increasing their industrysales forecasts to 15.7 to 15.8 million light vehicles. This revised forecast is 1 million vehicles greater thanthe 14.7 million level expected in November.

In contrast, Japans new vehicle sales have continued toexperience a weak start in 2002. Japans shakyconsumer confidence and high unemployment (highestin 45 years) are reflected in poor domestic sales by 4 ofthe 5 automakers. Honda is the only strong gainer, witha nearly 15% rise in Japanese sales in January.

After fairing well in 2001, new vehicle sales haveexperienced drop in Western Europe, mainly weigheddown by weakness in Germany and Italy. However,automakers in this region remain bullish about theexpected years sales reaching at least 15.5 million units.

Southeast Asia remains a bright star for continuedgrowth. New vehicle sales in the four largest markets ofSoutheast Asia freached a record 2001 level of nearly1.1 million units.

The continued strength of the global automotive industrywill positively impact the demand for natural-fibercomposites.

GM: G. Mustafa Mohaterem, 313/556-5000

February 27, 2002 NATURAL & WOOD FIBER COMPOSITESNATURAL & WOOD FIBER COMPOSITES Vol. 1, No. 2/Page 3


Regulatory/Testing

EPA to Amend Registration for CCAAlternatives to be Phased in through Dec 2003

Early this month, the three domestic manufacturers ofchromated copper arsenate (CCA) requested the EPA tomodify their materials registrations to exclude manyresidential applications of CCA-treated wood, includingplayground equipment, decks, and landscape timbers.

The request came as a result of months of negotiationsbetween the EPA and the producers of the pesticide,which has been used for 50 years to treat wood. The useof CCA for these applications will be phased out byDecember 31, 2003, while use for various industrialapplications, such as guardrail components, utility poles,and pilings, will continue.

The producers initiated the talks in response to mountingpressure from environmentalists who fear that thepotential for arsenic, a known human carcinogen, toleach out from treated wood puts children at risk ofdeveloping cancer. The EPA noted that it has notconcluded thatarsenic-treatedwood, whichtypicallycontains 2 lbof CCA per100 bd-ft,posesunreasonablerisks to thepublic. Thehazard associated with arsenic is well known, saidSteve Johnson, head of the EPA's pesticide office. Butthe issue for CCA-treated lumber is: Are children beingexposed to the materials in CCA-treated lumber? At thispoint we don't know.

The agency, which banned most uses of inorganicarsenic pesticides in 1984, will publish a preliminaryrisk assessment in 2003 after it has completed testing ofthe product.

The agreement applies to all forms of arsenic-containingpreservatives, including chromate copper arsenate(CCA), ammoniacal copper arsenate (ACA) andammoniacal copper zinc arsenate (ACZA). CCArepresents 95% of the preservative market volume. Therecent voluntary action by CCA producers in the UnitedStates follows similar actions in Switzerland, Vietnamand Indonesia. Other countries have also limited the useof CCA in treating wood, including Japan, Denmark,Sweden, Germany, Australia and New Zealand.

This voluntary change came after years of pressure fromthe Environmental Working Group and the HealthyBuilding Network to ban the use of CCA-treated woodfor playground equipment. Florida and Californialegislatures have considered several bills since 2000 tolimit or ban the use of CCA-treated wood in waterfrontstructures (boardwalks, sea walls, docks), playgroundequipment, and park fixtures (picnic tables).

California State Senator Gloria Romero (D-LosAngeles) has pushed for legislation that would ban allarsenic-treated wood in California and reclassify thelumber as a hazardous waste that must be disposed of inspecial facilities. Florida State Representative LarryCrow (R-Dunedin) filed legislation in 2001 to banarsenic-treated wood from playgrounds in Florida, butthe bill was killed in committee after the treated-wood,forestry and construction industries testified against it.

Rep. Crow and the Florida Public Interest ResearchGroup are now jointly sponsoring billboards in theTampa Bay area that warn parents about CCA-treatedwood. The first billboard shows children on playgroundequipment and reads Arsenic is poison.

CPSC: Ken Giles, 301/504-0990 AWPI: Mel Pine, 703/204-0500

Retailers Responding to EPAReady to Sell CCA Alternatives

Home Dept and Lowes are the largest retailers of CCA-treated lumber in the United States, which represents 7%and 9% of annual revenues, respectively, for the homecenters. Home Depot and Lowe's currently sellalternatives to CCA-treated wood alternatives, includingredwood (in select market regions) and wood compositedecking; however, the available supply of thesematerials is not sufficient to replace the volume of CCA-treated wood used.

The companies will begin stocking more of thealternatives as they become available and will stopselling CCA-treated wood prior to the January 2004deadline. Menards, the third largest home center chain,has been offering an ACQ-treated product since 1998,although the company also sells CCA-treated wood. The phase-out is dependent on how quicklymanufacturers are able to transition their treatmentfacilities, said Lowe's spokeswoman Chris Ahearn.

The problem they're going to have is getting access to areplacement, said Gary Donnelly, president of theNational Lumber and Building Material DealersAssociation in Washington. If they stopped sellingCCA-treated lumber tomorrow, they wouldn't haveanything to replace it with.

NLBMDA: Gary Donnelly, 202-547-2230



Check out the story on page 7 highlighting theresults of Principia Partners latest industry studyon Additives for Natural Fiber and WoodComposites. The study of the demand for anduse of additives is now available from Principia.

For more information about this study, visit the the following web page:

www.principiaconsulting.com/reports_woodadd.html

Materials

Marth Adds New Wood Flour FacilityCapacity Reaches 45 Million lb

Marth Manufacturing Inc. (MMI; Athens, WI)announces the initial production processing at theirstate-of-the-art wood flour plant. MMI began as MarthWood Shaving Supply and remains a privately ownedcompany that has served the wood fiber market for over40 years.

MMI focuses on wood fiber as renewable fillers forplastics, compounds and chemical processing. MMIsfirst composites-focused facility has been in operationsince 1998. The new facility is unique in its pioneeringblending abilities for custom fiber requirements.

In 1998, MMI initiated its 5-year development plan forits composites-related wood flour business. A pilotplant for the firms high performance wood flour was setup in 1998 at the Marathon facility. After the processwas proven, the company began to successfully market their products. MMI then built a larger second plant inAthens, WI about 15 miles away which opened inDecember 2001 . Both plants will continue to makewood flour for composites to ensure a reliable andflexible supply to their customers. The total capacity ofboth plants will be ramped up during 2002 to reachabout 20,000 lb an hour or 45 million lb a year. MMIhas long term supply contracts for pine and hardwoodshavings from larger lumber mills in the Northcentralregion

Tony Morice noted that Marth has no standard on-the-shelf wood flour products for composites, but isworking closely with customers to develop custom woodflour blends of different types of wood and differentmesh sizes. Morice added Our goal is to producemixtures of wood flour that perform best for specificcustomers, given their processing equipment andfinished products.Marth: Tony Morice, 715/842-9200 [email protected]

Regulatory/Testing

Shift to CCA Alternatives UnderwayConversion by Treaters Started in 1994

The total U.S. market for chemically treated wood for allapplications is estimated at 7 billion bd-ft in 2001, ofwhich an estimated 95% employs CCA. Of this total,about 5 billion bd-ft are used in decking, railings, andfoundation beams. Only 1% is used in playgroundequipment for homes, schools, and community parks.

Two alternative pesticides are available to replace thearsenic-based products, including ACQ (alkaline copperquaternary) and CBA (copper boron azole). ACQ hasbeen used as a biocide for years in such applications asswimming pool chemicals, hair shampoos, and soaps. Over the past 5 years, sales of ACQ-treated wood haveheld steady at 25 to 30 million bd-ft per year, while littleCBA is used for wood treatment. The cost of ACQ is$4.50 to $5.00 a lb, or 20% higher than CCA. Thesechemicals are produced by three companies in theUnited States, including:

q Chemical Specialties (Charlotte, NC) makes CCAand ACQ under the Preserve brand

q Arch Chemicals (Smyrna, GA) makes CCA and hashad CBA under the Wolmanized Natural Selectbrand on the market since 2000

q Osmose (Montreal, PQ) which makes CCA andACQ under the NatureWood brand

In order to begin producing a non-arsenic alternative, thetreaters will have to clean up their facilities at a cost of$40,000 to $200,000 depending on the number oftreatment tanks. The conversion is fairly simple. Inorder to make the conversion, the treatment tank mustbe completely cleaned, and piping, pumps and otherprocessing equipment too contaminated to be cleanedmust be replaced to eliminate any residual CCA fromthe system. The system must then be tested to ensure itas CCA free.

In addition to these capital costs, pressure treaters willalso face higher costs for treatment chemicals. ACQ ispriced 20% higher than CCA. As treaters convert toACQ, initial retail pricing for treated wood will be 25%to 30% higher than CCA-treated products. However,those treaters with significant experience with ACQcurrently market their products at just a 10% premium,and expect the cost of the treatment chemicals to declineas production volume increases.

About 350 plants across the country pressure-treatlumber. A few have been using ACQ for some time. Sunbelt Forest Products (Bartow, FL) began using ACQ



in May 2001 at its Ocala, FL plant. This Ocala plant isthe only ACQ wood treatment facility in FL certified bythe State as CCA free. The company has also converted50% of capacity at its Bartow, FL plant to ACQtreatment. We've been preserving wood with ACQnow for almost 10 months, and our customer base forPreserve and Preserve Plus (with water repellent) hasgrown dramatically over the last few months inparticular, said Carl Holland, Sunbelt Forest Productspresident.

Northern Crossarms (Chippewa Falls, WI) has usedACQ since 1994 to treat wood, and discontinued use ofCCA in 1997 due to growing public concerns aboutCCA in the environment. In 1998, Northern opened asecond plant for ACQ treated wood. Patrick Bischel,owner of Northern Crossarms, related that his firm wasa pioneer in ACQ use and is the largest and mostexperience treater using ACQ today. It's been anamazing turnaround over the last six months, Bischelsaid. Because of their experience in ACQ and thevolumes produced, the cost of the ACQ-treated lumberis only about 10% higher than CCA treated lumber.

Sunbelt: Cliff Daniels, [email protected]: Patrick Bische, [email protected]

Company News

From the Builders Show in AtlantaNew Products Profilerate

The show floor at the International Builders Show inAtlanta held February 8 to 11 was the hotspot for bothlongtimeexhibitorsand newcompositeproducers. Theindustry israpidlymaturingfrom ahandful ofdeckboardsuppliers showing their wares only a few years ago. Today, the material category is exploding in railing,porches, and fencing. The producers are beginning totalk very seriously about the inevitable expansion intosiding.

Builders and homeowners are gravitating to the categoryas the proliferation of decking and outdoor accessoriesbased on wood composites occurs. Furthermore, the

Environmental Protection Agencys decision aboutphase out of CCA (see page 3 for further info) willresult in explosive growth.

CertainTeed announced a variety of new tools to helpcontractors better serve customers of Boardwalkcomposite lumber. CertainTeed has created two newstyles of composite railing assemblies which arenationally approved for Boardwalk decks. The company also announced the creation of its patent-pending Boardwalk Deck Square. The 3-sided tool is astraight edge, a gapping tool and a baluster spacercombined into one.

TimberTech introduced two new colors at the show. The new colors - Grey and Cedar- complement thecompanys only current shade: Natural. Stu Kemper,TimberTechs President, explains, We have invested innew technology to ensure uniformity and maintainprecise color of the formula from batch to batch. Ourgoal is to meet the expectations of homeowners lookingfor their deck to look just like it does right after its beeninstalled. TimberTech is considering other colors forrelease in Fall 2002.

Trex also introduced new products and profiles at theshow, including the addition of Saddle, a deep tan colorthat weathers only slightly while maintaining a rich tone. For more railing options, the company showed achamfered railing profile and new decorative post capsin two classic designs. Andrew Ferrari, Executive VP,remains very upbeat about Trexs future growth statingthat with less than 10% of the decking being wood-plastic composite, the real growth still lies ahead.

Louisiana Pacific is also thrilled with the salesperformance of its WeatherBest brand of decking. Thecompany noted that by the end of January 2002 it hadbooked sales accounting for 60% of its annualproduction capacity. The company is adding extrusionlines and blending capacity at its two locations in Selma,AL, and Meridian, ID. The company has beensuccessful in providing a product that allowsreversibility in the boards pattern. One side features arandom graining pattern while the other side is a moreuniform rough-sawn look. The product will satisfy thediffering tastes of consumers and limit the productSKUs that must be stocked.

Tendura (Troy, AL) has entered an interesting niche byproducing front porch profiles. The company is runningsix lines. Ned Lawrence, National Sales Manager, says,We are satisfying an area that has not been adequatelyaddressed by the suppliers competing in the deckingsegment.



If you would like to have your event listed on theWood Composites calendar, please call us at

717/741-3565 or send the information to:[email protected]

Events Calendar

April 10-11, 4TH INTERNATIONAL WOOD ANDNATURAL FIBRE COMPOSITES SYMPOSIUM Kassel, Germany Sponsored by the University ofKassel, this event focuses on new applications,production technology, and end markets for woodcomposites. For info: contact Dr. Ing. A.K. Bledzki,[43]561/804-3690, [email protected]

May 14-16, WOOD-PLASTIC COMPOSITES: ASUSTAINABLE FUTURE Vienna, AustriaSponsored by AMI Plastics, the event will highlight alldevelopments in the industry. For info: visit AMI atwww.amiplastics.com

May 14-16, AUTO INTERIORS SHOW CoboConference Center, Detroit, MI Sponsored by AutoInteriors, the will include several papers on natural-fibercomposites used in automobiles. For info: visitwww.autointeriorexpo.com

May 23-24, 2002 PROGRESS IN WOOD FIBRE-PLASTIC COMPOSITES Toronto, ON Sponsored byMaterials & Manufacturing Ontario (MMO) and theUniversity of Toronto, this conference focuses on newdevelopments in wood composites. For registration,program, or exhibitor info: call Valeri Iannaci at905/823-2020 x226, [email protected]

June 26-28, PCBC 2002 - The Premier Building Show Moscone Center, San Francisco, CA The showattracts over 21,500 industry professionals and 625exhibitors for 4 days of education, exhibits, andnetworking. For info: visit www.pcbc.com

November 5-7, InterAUTO 2002 Cologne, GermanySponsored by Automotive Interiors, this conference andexhibition will address the latest in interior materials anddesign. For info: visit www.interauto.co.uk

Marketing

AERT Gets Contract with Lowe'sWeyerhaeuser Plays Distribution Role

Advanced Environmental Recycling Technologies(AERT; Springdale, AR) announced at the InternationalBuilders Show in Atlanta this month that it secured acontract to sell its products nationwide through Lowe's,the second largest home center chain in the UnitedStates.

Lowe's has an exclusive contract to carry AERT'sChoiceDek Premium line of deck materials, whileAERTs other decking products will continue to beavailable through established dealers. Weyerhaeuserwill distribute the product to Lowe's locations aroundthe country. Until this agreement, Lowe's carried a fewAERT products, but only in select locations. The chainhas carried the ChoiceDek line since January, and notedthat the product will be in all of its stores by mid-March.

Joe Brooks, AERT CEO, said The contract is a majorboon for the company. Brooks went on to compare itto the contract Tyson Foods won years ago to supplyMcDonald's restaurants with chicken nuggets. Thisdeal with Lowe's is at least as big for us as that was forthem, Brooks said.

Also at the BuildersShow, AERT announceda new railing systemunder the ChoiceDekbrand. The new railingsystem offers many anumber of novel features,including lighted rails anddeck posts, turnedarchitectural spindles, ahidden fastening systemand full deckingaccessories. The railingsystem will be availablenationwide to all AERTdealers by the end of 2002.

AERT: Joe Brooks, 866-396-3737



45%

29%

7%2%

5%4%

3%2%

1%4%

42.2 Million lb

53%

16%

8%

7%

4%3%

3%1% 1%

4%

$57.2 Million

ColorantsLubricantsCoupling agents

Light stabilizersHeat stabilizersImpact modifiers

Flame retardantsAntimicrobials

CFAsOthers-a

Demand of Specialty Additives in Natural/Wood Polymer CompositesNorth America, 2001

New Market Studies

$57 Million Market for AdditivesGrowth in Usage Driven by Cost Reduction

The market size for specialty additives used in naturaland wood fiber composites is 42 million lb, valued at$57 million, in 2001 (see chart).

Colorants find widespread, almost universal, usageacross all applications, and consequently represent thesingle largest category of specialty additives consumedin these composites. Inorganic and organic colorpigments accounted for 19.1 million lb valued at $30.5million.

Lubricants ranked second with 12.3 million lb valued at$9.3 million, primarily based on the increasing role forstearate-based chemistry used at many compositedecking producers.

Coupling agents like maleated polyolefins are gainingacceptance as a key chemistry to impart improvedadhesion between polymer and fiber, thus creatinggreater strength of the composite. This additivecategory accounted for 2.8 million lb valued at $4.5million in 2001.

Light stabilizers find relatively limited usage today at0.7 million lb valued at $3.9 million primarily based ontheir high price even at very low loading levels. Composite producers find the price too high to justifyusing the UV protection, and question whether theadditive can properly protect color fastness over manyyears. Nonetheless, increased use of UV absorbers andhindered amines is expected, as customer expectationsfor longer lasting color durability will drive futuredemand.

Heat stabilizers and impact modifiers are primarily usedby the few PVC-based wood composite producers activein the business today, and accounted for 2 million lb and1.6 million lb, respectively in 2001.

All other specialty additives, including antimicrobialagents, chemical foaming agents, and flame retardantswill find greater use in the future. A significant amountof R&D activity specifically in antimicrobials andblowing agents is already underway at many wood fiber-based polymer composite producers, primarily fordecking and other building products.

The market for additives natural fiber and woodcomposites will grow from 42 million lb, valued at$57 million in 2001, to over 87 million lb, valued atmore than $120 million by 2006. The 16% averageannual growth rate over this five-year period exceeds theexpected rate of growth for the composite industryoverall, due to the greater usage of the materials.

Several major application areas within buildingproducts, including decking and window/door lineals,will use more antimicrobials to prevent mildew staining,more chemical foaming agents for lighter weight andthinner walls; coupling agents for superior strength byimproving the bond between polymer and fiber; andcolorants/UV stabilizers for improved color fastness. While these additives generally add to the overallformulation cost, the performance improvements aredeemed necessary to improve the long-term viability incurrent and targeted uses.

Chemical foaming agents (CFAs) are largelydevelopmental at this stage. Some composite producersare experimenting with formulations containing theseadditives to reduce weight, increase yield, and providegreater wood like attributes through the cellularstructure imparted by CFAs.

Greater color stability through improved pigment andUV stabilizer technology, particularly for outdoor usessuch as decking, railing, and windows. Colorants areused to provide color even to non-aesthetic compositeapplications. In these cases, black is widely used, but srange of earth tone colors (e.g., grey, brown, slate,redwood) are also used to provide initial color for manyproducts.

Specialty plastics additives in composites is one of themost dynamic segments of the plastics industry. Severaladditive types, including colorants and lubricants, arereasonably well established but other additives haveonly penetrated 9% to 25% of their respective potential. Opportunities exist for additive suppliers to work withcomposite producers to utilize more additives in theirformulations. The value proposition needs to be basedon ease of processing (i.e. cost reduction) or in-servicefunctionality (i.e. performance enhancement).

Principia Partners: Lou Rossi, 610/458-3738

Corporate: P.O. Box 611 Exton, PA 19341 USA l 888/680-2199 (U.S. only) or 610/458-3738 Fax: 484/214-0172 l e-mail: [email protected] l www.principiaconsulting.com

Principias Expertise

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Principia Partners is owned and managed by highly skilled business information professionals with extensive experiencein materials consumed in building products and automotive markets. In particular, the Firms principals have closelymonitored the market for natural/wood fiber polymer composites through various single client engagements andsyndicated research. The Firm utilizes its own professional staff to keep abreast of leading edge developments in themarketplace.

NATURAL & WOOD POLYMER COMPOSITES is the latest product offering related to the natural/wood fiberpolymer composites industry conducted by Principia Partners, the Exton, PA-based market research and businessconsulting firm. The newsletter is prepared by consultants from Principia's professional staff who have monitored thebusiness development activities in the dynamic and growing synthetic wood products since the business was firstestablished over ten years ago.

Jim Morton and Carl Eckert will be key regular contributors to the newsletter. Jim, a principal at Principia Partners, isa well-recognized industry expert in polymer-wood composites, and has authored several relevant syndicated researchstudies, as well as speaking at various conferences on the topic. Carl, formerly with Kline & Company, is an expert onnatural fibers, and has spoken at numerous conferences about the emerging opportunities for these fibers. These twoindividuals will join other occasional contributors to the newsletter.

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PP2-029 V1N1Feb02 - Natural Wood Fibre & Composites