The global market for polyurethanes – a critical component of so many products we use in our daily lives – is so strong, companies that use it are predicting annual volume growth outstripping GDP over the next few years.
This was a key finding in a significant study we recently undertook of the worldwide polyurethane (PU) market – the most in-depth in a decade. Businesses across sectors and industries were in consensus about the high-growth potential of the versatile polymer.
Survey participants told us that demand was being driven mainly by worldwide economic growth, rising levels of income in emerging economies and stricter energy regulations, particularly in Europe and North America.
Between one third and a half of the 500 businesses we interviewed forecast annual growth of PU of more than 5% until 2021. This projected growth was broadly similar across regions and industries.
PU is a versatile material used in applications as diverse as energy-efficient insulation systems in buildings, high-performance coatings on jeans and trainers and in car seats, offering significant ergonomic advantages over seats made from other materials.
High consumer expectations
From fashion to furniture, cars to construction, it seems the popularity of PU, with its inimitable flexibility and long-life durability, has never been in greater demand. Increasingly, consumers want their products, from the shoes they wear to the mattresses they sleep on, to combine beauty with innovation as well as comfort.
Our 2016-2017 study shows that for designers who want to offer their customers higher quality, more environmentally friendly products, PU is increasingly the go-to material as demand for product upgrades and sophisticated functionality grows.
Our survey also reveals the growing requirement to use high-tech, lighter weight materials in the auto industry, with PU increasingly being used to replace other materials in interior and exterior applications in cars.
Using polyurethane-based systems alone and in combination with other materials for components, such as mudguards, bonnets and bumpers, can significantly reduce the weight of a vehicle. This in turn can cut a car’s fuel consumption and is particularly important for the development and spread of electromobility.
The heavy weight of an electric vehicle’s battery must be compensated elsewhere and the lighter the car is, the greater its range.
“This positive assessment of the market from our customers and potential customers chimes with our own forecasts,” says Hermann Dörholt, Senior VP Commercial Operations EMEA.
“Demand for sustainable, climate-friendly solutions is now higher than ever and that is exactly what we offer. We are extremely well positioned to take advantage of the exceptional growth potential in future-oriented segments, such as e-mobility and energy-efficient construction as well as changing trends in consumption culture.
“At Covestro, we are adopting a highly customer-centric business model based on anticipating our customers’ needs and surprising them with our ability to think ahead.”
The study, which was conducted over a period of six months, consisted of confidential, mostly face-to-face conversations with CEOs, general managers, procurement managers and technical experts.
It covered 50 countries in Asia Pacific (APAC), Europe, Middle East and Africa (EMEA) and the Americas (NAFTA) and focused on five of our key industries: appliances, building and construction, soft furniture, automotive and apparel.
“Covestro invented polyurethane more than 80 years ago but a lot has changed since then,” says Christine Bryant, Senior VP Commercial Operations NAFTA, PUR.
“As we continue to strive to push boundaries and provide innovative solutions to modern challenges we wanted to get a deep understanding of our customers’ needs, priorities and expectations and find out what really matters to them.
Here are some of the main findings from each industry:
Product upgrades benefits Appliance industry
Demand for superior products with new features, such as different cooling zones for better food preservation or smart appliances, are driving the replacement of refrigerators in developed markets. Growth in PU is also being fuelled by stricter energy regulations in Europe and North America.
‘In the US, there is a growing demand for energy efficient and resilient homes’
Regulatory requirements in North America propping up Building & Construction (B&C)
In the US, there is a growing demand for energy efficient and resilient homes that can withstand the powerful storms and hurricanes that regularly sweep through the region. One way we are addressing demand is through PUReWall, which not only meets the stringent building codes but also simplifies the building process on site and uses less material than traditional wall assemblies. Economic recovery in South America and growth in EMEA and APAC are also supporting PU demand in B&C.
Growing prosperity supports Soft Furniture growth
Rising income levels in emerging regions and increasing demand for comfort, sleep recovery and specialty bedding in mature regions are contributing to growth. In APAC, demand is particularly strong for high-end products and it is expected that the region will lead industry growth.
APAC’s fast-growing middle class will drive Auto
It is expected that a potential slowdown and saturation in developed markets, including in EMEA and NAFTA, will be offset by the purchasing power of the growing middle classes in APAC. PU is also the technology of choice for various automotive interior applications, favoured by manufacturers looking to achieve weight reduction and better acoustic performance.
Rise in consumerism fuels growth in Apparel
Consumer demand for differentiation, personalization and high-spec design, particularly in APAC, is driving PU applications in clothing and footwear. PU with its versatility, is now replacing PVC artificial leather.
The main hurdles to achieving expected growth, most of survey participants said, were volatile raw material prices and supply constraint, along with political risk and economic crisis.
“To differentiate themselves in fiercely competitive markets, customers need clever ideas, delivered at the right moment,” says Marius Wirtz, Senior VP Commercial Operations APAC.
“This can only be achieved by close collaboration with suppliers to overcome hurdles and deliver more value. We are determined to work together with our customers to achieve their growth ambitions.”
What influences a customer’s purchasing decision in the PU market? What should a supplier be doing to stand out in an increasingly demanding and competitive business environment? Keep your eyes out for our next article.
In the meantime, take a look at some of our thought leadership content to find out how Covestro embeds sustainability and innovation into its business strategy. http://pureinsights.covestro.com/