Improvements in manufacturing efficiency will help to raise the sector's profitability

Improvements in manufacturing efficiency will help to raise the sector's profitability

IAL Consultants is confident that improvements in manufacturing efficiency and supply logistics will help to raise profitability of the polyurethane industry in the short term, despite recent closures. “The business of supplying polyurethane chemicals is less profitable than it was in the past,” says Angela Austin at the consultancy. “This is mainly due to a huge expansion in availability, causing them to be traded more as commodities rather than specialities.”

IAL estimates the European polyurethane market grew by an average 3.1% a year between 2001 and 2003. Rigid foam and elastomers were the best-performing sectors. “Production of rigid foam continues to grow steadily as a result of growth in the construction industry across Europe, especially in Eastern Europe,” Austin says. “At the same time there has been strong growth in the use of PU RIM materials in the automotive industry.”

Over the longer term the consultancy claims that investment in products and applications are needed to maintain the forward momentum of the industry, especially in the mature west European market where key applications such as furniture and automotive are experiencing only minimal growth.