Industry operators are expected to increasingly invest in eco-friendly products over the next five years.
Melbourne, Australia (PRWEB) August 04, 2013
Plastic foam products have a number of uses. Many industries use plastic foam for packaging and furniture manufacturers use industry products for residential and commercial furniture. Furthermore, plastic foam is used in automobile and public seating, while it is also used in cars for insulation and sound suppression. The Plastic Foam Product Manufacturing industry performs poorly when these downstream markets suffer, but benefits when they perform well. Unfortunately for plastic foam manufacturers, several key markets face an inexorable decline and others are barely hanging on. The industry has faced falling revenue over the past five years, but is expected to produce stronger results over the next five years.
IBISWorld industry analyst Sebastian Chia states “rising competition has squeezed the profit of plastic foam manufacturers to minimal levels, as operators have become increasingly price competitive to retain and grow their customer bases.” Over the five years through 2013-14, profit averaged 4.9% of revenue. Revenue is estimated to fall at an annualised 2.6%. Revenue for the [Plastic Foam Product Manufacturing industry is forecast to fall 0.9% over 2013-14 to $633.1 million. Smaller players that were already battling to keep their heads above water have been forced to close operations or be absorbed by larger competitors. While neither revenue nor profit are expected to be stellar over the next five years, both will stay out of the red. Environmental lobbying may threaten volume growth for some industry products (e.g. packaging) in the future. To combat this, industry players are expected to invest in eco-friendly technologies. According to Chia, “stable growth in demand from mattress and furniture manufacturers and solid demand for polystyrene fruit and vegetable containers from the Agriculture division are anticipated in the short term.”
While the overall market concentration is medium, concentration across the industry's various market segments differs. For example, in the flexible slab stock polyurethane foam market, the largest two operators are believed to account for over 65% of the market. Meanwhile, 50% to 70% of the expanded polystyrene foam market is estimated to be controlled by the four largest players. This trend shows that the number of enterprises operating within the industry cover a significant amount of highly concentrated market segments, reflecting the various types of plastic foam products available with their specific uses in different applications. The four largest enterprises include Huntsman Corporation Australia, Australian Comfort Group, Joyce Foam and Huhtamaki. For more information, visit IBISWorld’s [Plastic Foam Product Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of enterprises that manufacture plastic foam products used in the construction of housing, vehicles, furniture and many other products. It also includes firms that shape purchased blocks of foam.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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