IBISWorld Market Research
Increasing dwelling commencements will assist industry operators, as more polyurethane and polystyrene foam products will be demanded as insulation.
Melbourne, Australia (PRWEB) September 12, 2014
Operators in the Plastic Foam Product Manufacturing industry in Australia have performed poorly over the past five years. Industry revenue is expected to fall at an annualised 6.1% over the five years through 2014-15. According to IBISWorld industry analyst Spencer Little, “the significant fall in revenue over the period has been primarily due to weak demand from downstream manufacturers that use plastic foam as key inputs.” Polyurethane plastic foams are used to manufacture beds, mattresses, pillows, couches and other furniture. Construction firms also use a range of plastic foam products as building insulation, and motor vehicle manufacturers use polyurethane foam in car seats, headrests, armrests and other panels. Additionally, food processors package fruit, vegetables and other food products in polystyrene boxes.
Many of these downstream manufacturers have faced rising import competition, particularly over the three years through 2012-13 when the strong Australian dollar made imported goods comparatively cheaper. “The industry's performance has since improved slightly, due to greater demand from furniture manufacturers and steady demand from food processors,” says Little. As a result, revenue is expected to grow by 2.1% in 2014-15, to reach $627.1 million. The Plastic Foam Product Manufacturing industry exhibits medium levels of market share concentration. Major players include Australian Comfort Group Holdings Pty Ltd, Joyce Foam Pty Ltd, Huhtamaki Holdings Pty Limited and Huntsman Corporation Australia Pty Limited.
Over the next five years, the industry's decline is expected to slow slightly. Growth in the number of dwelling commencements is anticipated to assist industry operators, as more polyurethane and polystyrene foam products will be demanded as insulation. However, the expected exits of Ford, Holden and Toyota from the downstream Motor Vehicle Manufacturing industry in 2016-17 and 2017-18 are projected to severely affect industry firms. Demand for plastic foam used in car seats, headrests and armrests will fall in line with the cessation of a large share of domestic motor vehicle production. Steady growth from other downstream markets, such as furniture manufacturers and food processors, is expected to slightly offset this drop in demand from motor vehicle manufacturers.
For more information, visit IBISWorld’s Plastic Foam Product Manufacturing industry in Australia report page.
Companies in the industry primarily manufacture polymer foam products. Firms that mainly manufacture polymer filler products that are used to fill in wall cavities, insulate walls, and cushion swimming pools and spas are also included in the industry.
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