Tube 2012: Innovative products for new markets! Increase in plastic tube production
The German plastic tube industry has mostly recovered from the crisis-related slump of recent years and is once again looking ahead to the future with greater optimism. Although no exact production figures are yet known for 2010, after two years with a dramatic slump in production volume, an increase in production output is now expected. This is indicated not only by the information coming out of manufacturers’ circles but also by the business climate index, which has been published since the end of 2008 by the German Plastic Pipe Association (KRV - Kunststoffrohrverband e.V., Bonn - www.krv.de).
In the 4th quarter of 2010 the quarterly indicator for assessing the development of the current situation and expectations for the following quarter among the manufacturers of plastic tubes and moulded components and (in the area of domestic technology) plastic tube system suppliers respectively, gave a positive reading for the third consecutive occasion. However price increases in raw materials are increasingly having a negative effect on the sector’s revenue situation.
Compared to the two previous quarters, the early onset of winter last year resulted in the business climate index admittedly falling somewhat in the 4th quarter of 2010. While business expectations continued to increase for the 1st quarter of 2011, the current business situation was assessed as much weaker by the participating companies. According to the association, the very high level of the index for business expectations tends to confirm that the slump in demand in the 4th quarter of 2010 can be compensated for at the beginning of this year. According to the KRV, this applies to both the supply and disposal as well as domestic technology sector. In the industrial tube sector, which made a key contribution to the good result in the 4th quarter, the upturn is expected to continue at a high level.
The current revenue situation for the raw materials manufacturers looks less encouraging. Here the manufacturing costs, which are well above those of the previous year’s level, are having a negative effect. The main factors responsible for the slump in the margin are the increasing raw materials prices and their primary products. Here double-figure percentage increases have been registered since the beginning of the year. On top of this there are also increasing transport and energy costs.
In the 3rd quarter of 2010, in addition to the general economic improvement and the backlog demand from the spring, a revival in project-based orders also had positive effects on business. According to the tube manufacturers, it was only the disposal sector, where the picture was more ambivalent in regard to the end of 2010. Although this sector also benefited from the generally improved demand situation, this was countered by a decreasing investment readiness, especially on the part of the financially constrained municipalities and local authorities. Compared to the German economy overall, the domestic plastic tube industry was therefore only able to partially benefit from the powerful upturn of last year. In addition to the empty public coffers, the cuts in the state funding programmes aimed at reviving housing construction are also having a negative effect. The plastic tube industry is responding to this among others through the development of innovative products aimed at improving its market position, extending market share and developing new business areas.
A retrospective shows the considerable effects of the global financial market crisis on the German plastic tube industry. Following a decline in production volume of 4.8 percent in 2008, in 2009 the German manufacturers registered a further slump of 10.2 percent. The annual production of tubes and moulded parts thus fell by 69,000 tons to 607,000 tons. By comparison: in 2007 German plastic tube production at 710,000 tons reached the highest production volume of the past decade. Many companies reacted to the worsened general conditions – increased pressure on the utilization of production capacities, rising material prices coupled with high competition intensity and the associated revenue losses – with cost reduction programmes.
According to the KRV 2009/2010 annual report, in 2009 the plastic tube manufacturers had to contend with more severe declines both in the "supply" of underground plastic pipeline systems application area as well as in the "waste disposal" and "house and building technology". sub-markets. The gas and heat supply market is particularly suffering from the fact that the share of gas-supplied new buildings is in marked decline. Gas utility companies are in addition hardly investing in new networks any more, because the climate-policy conditions no longer foresee any outstanding role for gas in the heat generation market. The demand for plastic tube systems in the disposal area also suffered in 2009 from the decline in housing and commercial property construction. This is contrasted by new areas of application for plastic tube systems, for example in power station and solar energy technology, in cable protection tubes (underground telecommunication technologies, off-shore wind turbines) as well as in industrial applications.
Compared to many other sectors of industry, the German plastic tube industry is more heavily dependent on the domestic market. In 2008, according to the KRV, the export quota was still as high as 27.8 percent. In 2009, following a slump of 21.8 percent compared to the previous year, exports accounted for less than one quarter of total production. By comparison: in the same period domestic sales of plastic tube systems fell by just 7 percent.
The production volumes broken down by materials show that plastic tube systems made of polyethylene (PE) and polypropylene (PP) were able to continually further extend their market significance in the past decade. Polyethylene, in particular, has secured itself a leading position in the area of drinking water and gas supply. In 2009, however, all materials experienced declines in production volumes. In this connection the production declines for PE and PP tube systems in 2009 were lower than for polyvinylchloride (PVC-U). According to the association, plastic tube systems made of PVC-U do, however, still have their preserve in the pressure and pressure-free underground areas of application as well as in industrial submarkets.
Not only in Germany is the plastic tube industry back on course for growth following the slumps and declines. Experts assume that the European plastic tube industry will also be able to continue its volume growth. In terms of tube and pipe applications in private households, a constant but not very fast rate of growth is expected. Higher rates of growth are expected for pipe and tube applications in the industry. Two industrial tube applications, for which growth is expected in 2010, are reinforced tubes and PE-RT pipes along with large-diameter tubes. There are also growth opportunities for applications in which various materials are combined. These pipe and tube systems consist for example of plastic-coated steel tubes or of combinations such as polyethylene high-density (HDPE) with polyamides and polypropylene (PP) or polyethylene with increased temperature resistance (PE-RT).
The latest new developments are completely pre-insulated plastic tube systems in large dimensions for secondary refrigeration and deep-freeze pipelines. The manufacturer is promising an installation period up to 6 times shorter compared to conventional systems, and thanks to the corrosion resistance, improved efficiency along with lower installation and maintenance costs. The system is based on a corrosion-free interior tube made of ABS (Acrylonitrile-Butadiene-Styrene), which is coated by a compact PUR insulation. An external PE sheathing offers protection against mechanical influences, for example high-pressure cleaning. The smooth interior of the ABS plastic tubes and pipes prevents deposits from the medium, promotes even flow within the tube and reduces pressure losses (www.piping.georgfischer.com).
In the area of tube and pipe extrusion the trend is towards multi-layer plastic tubes with functional layers. A special feature of the tubes designed for application in the hot and cold water sectors lies in the use of fibre composites. Compared to conventional plastic tubes for hot water conveyance, three-layer PP-R fibre composite tubes are designed to offer several advantages - in this connection relatively easy processing of the fibre composites on polypropylene (PP) basis. According to the manufacturer, in the event of heat influence, the tube length hardly changes, which makes the engineer’s work easier when it comes to expansion compensation and connecting technology. Due to the stiffness of PP-R fibre composite pipes, a larger gap between the mounting brackets is possible compared to the installation of unfilled PP-R tubes (www.krauss-maffei.de).
The supply of drinking water is generally regarded as an application area with high-growth opportunities. According to information from industrial circles (www.simona.de), the investment requirements in the areas of water supply and wastewater disposal are between 400 and 500 billion Euro worldwide, in the OECD region around 200 billion Euro and in Germany alone 7 billion Euro. In addition to the normal tubes and moulded components for water supply pipelines, these also include for example pipeline systems for seawater desalination facilities. The industry sees a further future area of application in the traffic sector. In this connection they are thus assuming growth in worldwide air traffic of up to seven percent in the next 20 years. The increase in road traffic is assessed as much more dramatic – especially in Asia. In India the number of cars per 1,000 inhabitants is set to almost triple by 2050 and in China even increase around eightfold. As a result, many a plastic tube manufacturer therefore sees major growth potential away from the established markets and in particular in Eastern Europe, Asia and South America.
In the area of energy and environmental technology too, the challenges and opportunities are great. Plastic tube products are for example used for flue-gas de-sulphurization and chimney linings. Newer developments include products for depth geothermal energy and pipeline systems for conveying CO2. In the area of geothermal energy the Earth’s heat is used as a sustainable form of energy, in which for example a complex pipeline system carries groundwater and transports it to the surface for heating/refrigeration purposes. For pipe systems used in CO2 transport – such as for example the "OCAP CO2 Green-Gas" Project - the greenhouse gas created in a refinery as a "by-product" is fed into a pipe system more than 140 km long to greenhouses located in the vicinity and thus used as a growth accelerator in plant production.
What is quite unmistakable is the fact that the plastic tubing markets are subject to a dynamic, constant further development. Due to the large number of different plastics, today, in contrast to earlier days, it is possible to quite specifically develop special products for application-specific requirements. As a result, according to the KRV, the world of plastic products will become increasingly complex. Influenced by the three megatrends – growth in the world population, globalization and urbanization along with climate change – the aims of the plastic pipe and tube industry will also be the constant development of new and better solutions.
According to the KRV, the trend in production volume over a longer period of time shows that plastic tube and pipe systems find themselves on a long-term growth path. With the technical further development of the material "plastic", advances in production and process technology along with the development of high-performance products for new areas of application, the plastic tube industry is presenting itself as an innovative sector with sustainable growth perspectives. As in other sectors, the economic trend for 2011 particularly depends on the further development of the raw materials markets as well as the pace of recovery in the industrial nations. Overall, the industry believes there will be a tendency towards a continuing improvement in the demand situation on the world markets for 2011. The following year (from 26 to 30 March 2012), the plastic tube and pipe industry will already be presenting new and innovative solutions at Tube, the next International Pipe and Tube Trade Fair in Düsseldorf.
Press contact 2012:
Petra Hartmann-Bresgen
Kathrin Kleophas
( +49 (0)211/4560-541/-544
+49 (0)211/4560-87 541/-87 544
HartmannP@messe-duesseldorf.de
KleophasK@messe-duesseldorf.de
