(June 20, 2005) — Change is essential. This year's Pipe, Profile and Tubing Special Report is full of changing companies and technologies, as firms gear up to serve an increasingly global economy and fight the onslaught of competition from alternative materials.
Consider these scenarios that will make 2005 an interesting year for this dynamic segment of the plastics industry:
* At press time, there was no reportable change in the ownership of Royal Group Technologies Ltd., as the Woodbridge, Ontario-based profile extruder still was considering a bid from Cerberus Capital Management LP of New York.
* Advanced Drainage Systems Inc. of Hilliard, Ohio, and Hancor Inc. of Findlay, Ohio, will become one, barring any unusual developments from a second request for information from the Federal Trade Commission. The proposed merger will create the largest plastic pipe company in North America.
* At least two extruders of composite profiles are on the block. Nexwood Industries Ltd. of Brampton, Ontario, still is in receivership and its assets for sale under PricewaterhouseCoopers Inc. of Toronto. Paper company Kadant Inc. of Acton, Mass., still is seeking a buyer for its GeoDeck unit.
* Significant strides are being made with new technologies and materials, including bimodal resins. Dow Chemical Co. and BP Solvay have secured contracts to supply material for pipe for one of the larger natural gas utilities in the United States. Such contracts will open the North American market for further use of bimodal PE resins.
* Profile extruders serving the illustrious window market are making significant investments and looking for ways to improve technology to stay ahead of the game in North America, a proverbial hotbed as residential construction activity demands higher-end products. We reported in May that China's PVC demand will outpace that of the United States this year, fueled largely by needs of the construction market. Still, the United States is demanding higher-end products and customized solutions as consumers become more comfortable using plastic-related products in their homes.
But there is the profile extrusion market in China as well. The country represents a significant opportunity for profile extruders that have built their reputation based in the North American market.
If you're not yet convinced, consider some of the following facts.
Sompo Zhou, chairman of Zhou Dynasty International Group, a Beijing company that owns extrusion tooling producer Tongling Trinity Technology Co. Ltd., said expansion of the building industry in China in the next decade will open a vast market for plastic building materials.
By 2010, experts predict plastic pipes will be used in 80 percent of construction drainage projects; 80 percent of heat, water and hot-water supply systems for urban buildings; and 90 percent of conduit.
In window and door profiles, the opportunity is significant, because PVC holds a 35 percent share of the market in China.
Don't let it be a missed opportunity.
DeRosa is a Plastics News staff reporter based in Oklahoma.