The Synthetic Resin and Rubber Manufacturing industry is in decline due to domestic and global recessionary conditions
Melbourne, Australia (PRWEB) May 11, 2012
The Synthetic Resin and Rubber Manufacturing industry plays an important part in Australia's overall chemicals and plastics industries. The industry's output is a key input into a wide range of other Australian manufacturing and industrial industries – including agriculture, automotive, construction, mining, water and sewerage. However, the industry is in the decline phase of its life cycle. According to IBISWorld industry analyst Arna Richardson, “general macroeconomic uncertainty, a falling price environment and continued customer de-stocking across key value chains has characterised the industry over the past few years”.
Having contracted for three consecutive years, the Synthetic Resin and Rubber Manufacturing industry posted only a slight gain in 2010-11, with sales remaining well below historical averages. Growth rates for 2011-12 are also expected to be sluggish at 1.6%, with revenue worth an estimated $3.18 billion. This represents an annual decline of 7.6% over the past five years. The industry is deemed to have a low level of concentration. The level of concentration has gradually risen in line with the industry's rationalisation and restructuring process, which commenced in the late 1990s and is still continuing today. Richardson adds “in some product segments, industry concentration may be considerably higher, especially in those instances where there are just one or two manufacturers of a particular product”. This trend is expected to continue in line with further industry rationalisation. The two major companies in the industry are Qenos Holdings and LyondellBasell Australia.
In the immediate future, natural gas and crude oil prices will remain volatile, as will the pricing structure for several products. Cyclical supply and demand imbalances within both the industry and downstream user industries will continue to affect performance. An increasing reliance on imported finished or semi-finished plastic products will also affect the Synthetic Resin and Rubber Manufacturing industry’s performance. Prices will fluctuate with demand and global changes in capacity utilisation. Increased local environmental regulations and their associated costs, including those relating to greenhouse gas emissions, may hinder the prospects of the industry through the short-to-medium term.
For more information, visit IBISWorld’s Synthetic Resin and Rubber Manufacturing report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture synthetic resins and synthetic rubber. Manufacturing may be undertaken on both a customised or non-customised basis. Key products include polyethylene, polypropylene, polyvinyl chloride, polystyrene and synthetic rubber. Industry products are then sold to downstream industries including packaging, chemicals, construction and transportation.
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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