Reformulating products and players. (plastics additives) (Cover Story) (Industry Overview)

"Every product is a market," says an executive at one polymers additives company, describing the global polymer additives business. The blizzard of products and services is further complicated by the disparate nature of the companies offering them. There have been several important acquisitions, joint ventures, and consolidations recently, but the business is such that fragmented markets are a chronic condition.

The worldwide additives business is approaching the $10-billion/year mark and has output of about 9 billion lbs/year. North America, Western Europe, and Japan each account for roughly one-third of the total (charts, p. 30), but market watchers figure that business in Korea, Taiwan, and the rest of the Pacific Rim--as well as South America and perhaps Eastern Europe--will accelerate rapidly during the next few years.

DIVERSITY. There are at least a dozen types of polymer additives, some of which defy neat categories. The common groupings include modifiers (compatibilizers, coupling agents, impact modifiers, nucleating agents, peroxides, chemical blowing agents, and plasticizers), property extenders (flame retardants, antioxidants, preservatives, light-, heat-, and ultraviolet stabilizers, and antistatic agents), and processing aids (mold release agents, lubricants, antiblocking agents, and slip agents). Percentages for each broad category in the three major consuming regions of the world vary greatly, from almost half of the total regional market to just one-quarter (charts, p. 30).

Similarly, the consumption of polymer additives varies greatly among resin manufacturers, merchant compounders, and parts fabricators (chart, below), but not as much by resin type. Polyvinyl chloride (PVC) is by far the biggest user of additives in the U.S., with twice the value and three times the volume of polyolefins. Other resins--including styrenics and thermosets--account for about the same size markets as polyolefins. Highly accurate market breakdowns are available for the U.S. (charts, p. 30); markets in Western Europe and Japan vary only a few percentage points from those of the U.S.

Growth rates within each segment range from 2%-3% for some commodity plasticizers to 10%/year or higher for some hot PVC additive markets, such as large-diameter pipe or siding. New products or line extensions can take off rapidly and overshadow an established material quickly in some industrial applications. But in food and pharmaceutical markets, where …