REPORT HIGHLIGHTS

• The merchant market for polymeric foams in the U.S. is estimated at 7.4 billion pounds in 2001. BCC forecasts an overall average annual growth rate (AAGR) of about 2.8% for all foams through 2006.
• While one of the smallest of the major markets, the highest AAGR of any resin group, 3.8%, is forecast for polyolefins, largely based on demand in leisure and sports applications. Total demand in 2006 should be about 361 million pounds.
• Polyurethane (PUR) foams, both flexible and rigid, have the largest market, 3.96 billion pounds in 2001, with a predicted AAGR of 3.6% to 4.7 billion pounds in 2006.
• Polystyrene foams, both extruded and expanded beads, are the second largest family of foamed plastics, but are forecast to increase at an AAGR of only 1.2% through 2006.
• Polyvinyl chloride foams are expected to rise at an AAGR of only 2.6%, in large part driven by continuing environmental pressures against the use of PVC.

REPORT SCOPE

INTRODUCTION

STUDY GOALS AND OBJECTIVES

In the roughly five years since Communication Co.'s (BCC's) last study on the polymeric foams industry, significant changes have continued to occur in this major segment of the plastics production and processing industry. Products and markets change as technology and society change. Polymer foams find their primary applications in consumer products, such as cushioning for furniture and automobiles, thermal insulation for construction and packaging, and similar end uses that are driven by the cycle.

Most of the markets for plastic foams are the same ones that existed a few years ago; however, there are several faster-growing, newer markets, such as cross-linked polyolefin foam in leisure and sports goods and foamed PVC in house siding, windows/doors, and other construction shapes.

Polymers are foamed for cost and performance advantages. Foamed plastics are lighter than nonfoamed articles made from the same resin; they require less resin and therefore achieve lower costs. Equally or more important, foamed plastics have properties that are not attainable with nonfoamed ones. The insulating and cushioning qualities of the gas bubbles in a foamed article are obvious attributes, but less obvious is the fact that a foamed article is often stronger than its nonfoamed analog. Thus structural shapes and forms, such as piping and wall siding, can be stronger when foamed.

What has driven these markets and caused the most significant changes have been environmental and public perception issues. Environmental issues include:

• consumer safety issues, ranging from fire resistance and flammability to concerns over the use of plastics thought to be (almost always erroneously) health hazards (especially carcinogens);
• solid waste disposal and recycling, a continuing public and political 'hot button' of the 1990s; and
• atmospheric protection, caused by concerns and actions taken regarding blowing agents used to produce foamed plastics.

Because of concerns over the earth's ozone layer and global warming, chlorofluorocarbons (CFCs) were banned, and their first group of replacements, HCFCs, are also planned for phase-out in the foreseeable future. Volatile hydrocarbon blowing agents are under increased control as air-polluting VOCs (volatile organic compounds).

Our goal is to describe the most common and popular commercial polymeric foams and their applications, their technologies, competing plastic and foams, as well as those made from other materials, and future industry trends. Estimates and forecast markets are made for plastic foams of several kinds in many different important markets such as construction, transportation, and packaging. The polymers and applications covered introduced below under "Scope and Format" and are discussed in greater detail in following sections.

REASONS FOR DOING THE STUDY

Polymer foams touch our lives every day. Some applications are unseen, such as the insulating sheathing on our houses and inside our refrigerators, while some applications are visible end uses, such as foamed seat cushions and polystyrene hot cups used for fast-food coffee. These products are important items in the economy, and because of the environmental issues previously noted, represent an interesting dynamic of the twenty-first century American society.

The plastic foam industry is a major segment of the American plastics industry, accounting for about 10% of total commodity resin consumption. Foamed products, such as those used for insulation and protective shipping, reduce energy consumption and product damage, and thus lead to lower manufacturing costs, less waste, and other desirable results.

BCC performed this study to provide a comprehensive reference for those interested and/or involved in these products; these professionals comprise a wide and varied group of companies (including chemical) that make and use polymer foams, as well as process technology and equipment designers and marketers, politicians of all persuasions, and the general public. The information in this report has been gleaned and condensed from a large amount of literature and other reference materials in the course of its compilation.

CONTRIBUTION OF THE STUDY AND FOR WHOM

This report is intended to assist those involved in several different segments of the U.S. industrial and commercial sectors, primarily those professionals whose main interest is in thermal insulation (construction, appliances, and the like), comfort cushioning (furniture, auto seats, and other uses), transportation (other automotive parts, such as protective cushioning, and bumpers), as well as packaging applications. These professionals include those who are involved in the development, formulation, manufacture, sale, and use of foamed polymers and polymer foaming processes, and ancillary es, such as processing equipment, additives, and other support chemicals and equipment (e.g., process and product-development experts, process and product designers, purchasing agents, construction and operating personnel, market staff, and top management). This report will be of great value to technical and personnel in the following areas, among others:

• Marketing and management personnel in companies that produce, market, and sell polymeric foams.
• Companies involved in the design and construction of process plants that manufacture polymeric foams and those that service these plants.
• Companies that supply chemicals, equipment, and other materials to plastic foam producers and users.
• Basic research personnel in academia, government, and industry.
• Financial institutions that supply money for the above-mentioned facilities, including banks, merchant bankers, and venture capitalists. Such institutions need to identify and know areas of potential trouble, as well.
• Personnel in end-user companies and industries; these are a wide ranging group of companies in industries as varied as automobile manufacture and health care products packaging.
• Personnel in government at many levels, not only at the federal level (such as the Environmental Protection Agency), but also state and local health, environmental, and other regulators who must implement and enforce the laws regarding public health and safety.

SCOPE AND FORMAT

This BCC study covers in depth many of the most important technological, economic, political, and environmental considerations in the U.S. polymeric foams industry. It is primarily a study of U.S. markets, but because of the global nature of polymer and packaging chemistry, it touches on some noteworthy international activities — primarily those that impact the U.S., market such as imports/exports and foreign firms operating on U.S. soil.

All market figures are rounded to the nearest million pounds, and all growth rates are compounded and signified as percent average annual growth rates (AAGR%). Because of this rounding, some growth rates may not agree exactly with figures in the market tables, especially for differences in small volumes. All market figures are at the manufacturer's or producer's level.

REPORT ORGANIZATION

This report is segmented into 10 sections, beginning with the Introduction. The Summary (this section) encapsulates our findings and conclusions, and includes summary major market tables. Here, the busy executive can find the major findings of the study in summary format.

An Overview to the industry follows, starting with an introduction to the petrochemical industry that is the source of polymers and the plastic resin industries that make the resins that go into polymer foams. Polymeric foams are introduced and each of the major foamed plastics and their principal foam structures are discussed. The section ends with a discussion of some competing foam materials, thus introducing the reader to the field of polymers and foamed plastics and foam structures.

The Polymer Foam Markets by Material Type section discusses and forecasts markets for foamed plastics by type. These include three classes of major commodity thermoplastic resins used to produce foams: polyolefins, polystyrene, and polyvinyl chloride. The largest foamed polymer group, the polyurethanes (PURs), comprise the major focus. Some specialty foams are included, as well as an analysis and market forecast for plastic foam blowing agents and PUR raw material isocyanates and polyols.

The section begins with an overall market analysis and forecast for the major types of polymeric foams for the base year of 2000, an estimate for 2001, and forecast year 2006. Each type of foam is then described in more detail with a discussion of important applications and more-detailed market forecasts.

The second market analysis section, Polymer Foam Markets by Applications, discusses and forecasts markets by polymer foam applications. Applications have been categorized into seven specific major groups:

• appliances, primarily thermal insulation,
• building/construction, primarily insulation and PVC profiles/shapes,
• electrical/electronics, with the largest market in acoustical and noise-control foams,
• furniture and furnishings, mainly comfort cushioning,
• medical applications,
• packaging, both functional and product protection, and
• transportation, primarily cushioning.

A group of other applications, ranging from sports equipment to shoe insoles and powder puffs, ends the section.

The next section, Technology, starts with a review of some basic polymer chemistry, manufacture, and properties of plastics used in producing plastic foams and then progresses on to conventional foam technologies. Some new polymer foam technologies are covered, including new blowing agents and polyol technology, and microcellular foams. A discussion of polymer recycling technology rounds out the Technology section.

The Industry Structure and Competitive Analysis section covers the structure of the polymeric foams industry and emphasizes the major domestic producers and suppliers, as well as trends in the industry. Some international aspects of the are also discussed and analyzed, including the global nature of the polymer foam industry, major foreign-owned supplier companies that operate in the U.S., and trends outside the U.S.

The Environmental, Regulatory, and Public Policy Issues section follows, items of increasing importance to the polymer foams industry. Several of the most important environmental and regulatory considerations are linked since governments have decided that regulations are the best means of achieving environmental ends, such as saving the earth's ozone layer and reducing greenhouse gases.

This report's last narrative section, Company Profiles, lists supplier companies (and many their divisions) that BCC considers to be among the most important and/or best representatives of the polymer foam .

Finally, this report ends with an Appendix containing a glossary of some important terms, abbreviations, and acronyms used in the chemical, polymer, and polymer foams industries.

REPORT SCOPE AND NOTATION

Some topics and materials covered in the text of this report are not specifically included in our market forecast tables. A good example is microcellular foams, an exciting technology that is currently being commercialized; however, the technology is used to foam the same resins, and commercial applications are already included in market figures.

Copyrighted and trademarked trade names are capitalized and usually indicated, at least when first introduced, by use of the symbols ® and ™. Generic product names are lowercase, with the exception of common chemical acronyms, such as MDI and TDI, and plastics such as PE, PP, PVC, and PUR. Chemical formulae are sometimes used to abbreviate compounds, such as NaCl for sodium chloride (salt).

METHODOLOGY AND INFORMATION SOURCES

Searches were made of the literature and the Internet. These included many leading trade publications as well as technical government compendia, and information from trade and other associations. Much product and market information was obtained from the principals involved in the industry. Corporate profile information was obtained primarily from the individual companies, especially the larger publicly owned firms. Other information sources included textbooks, directories, articles, and industry websites.

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