Plastic will become more popular in the global pipe market, but North America is expected to drop out of the top spot as the world's largest consumer of plastic pipe, according to Freedonia Group Inc.'s "World Plastic Pipe" report. The Cleveland-based market analysts released the 308-page report in December.
Freedonia's first attempt to assess the $14.3 billion plastic pipe industry predicts plastics will account for 39 percent of global pipe demand by 2003.
In previous years, North America led the way in increased use of plastic pipes, and Freedonia had analyzed only the North American plastic pipe market.
However, Freedonia now predicts that Latin America and the Asia-Pacific region will take over as the world's leading users of plastic pipe by 2003.
North America's booming economy is expected to slow down, causing fewer new housing starts and a decrease in commercial building, said Thomas Bowne, Freedonia's senior industry analyst.
"Growth probably won't be as great as it was over the last several years," he added.
At the same time, Asia is getting back on its feet following a financial crisis that all but halted expansion in some countries. Construction activity has resumed and is expected to increase in underdeveloped Asian countries, spurring a high demand for plastic pipe, the report said.Japan, Asia's largest user of plastic pipe, is likely to take a lot of credit for sales as it demands plastic pipe for installation of local gas lines, according to Freedonia.
Demand in Latin America is growing 6.9 percent per year due to increasing personal incomes, new housing starts and infrastructure improvements, the report concluded.
Advanced Drainage Systems Inc. of Columbus, Ohio, hopes the prediction is correct, said Tony Radoszewski, director of marketing and business development.
With a recently opened factory in El Salvador to manufacture high density polyethylene pipe, the company is depending on those underdeveloped countries to increase its use of polymers in pipe, he said.
"We're banking our future on it," Radoszewski added.
However, he said he doesn't necessarily think the North American market will slow down.
Though PVC has been the world's most popular plastic for manufacturing pipe, demand for HDPE pipe is expected to rise during the next five years at a rate of 7 percent per year, Freedonia predicts.
As the telecommunications market continues to grow, HDPE will be used to manufacture fiber-optic conduit and electrical wires. It also is becoming more widely used in small-diameter pipe for natural gas, and as corrugated drain and sewage pipe.
PVC pipe giant J-M Manufacturing Co. Inc. also predicted HDPE would become a major player and decided to get in on the ground floor. The Formosa Plastics Group USA subsidiary, based in Livingston, N.J., currently is building its own HDPE pipe plant in Adel, Ga., to manufacture conduit.