analysis of the north america wire and cable materials market- executive summary
TRANSCRIPT
Analysis of the North American Wire and Cable Materials Market
Greater Performance Is Key Trend for Materials
NB79-39September 2012
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Research Team
Anita Pamu Research AnalystChemicals, Materials, and Foods
(091) 44 66814188
Lead Analyst Research Director
Dr. Leonidas Dokos Research Director Chemicals, Materials, and Foods
(044) 1865 398 685
Strategic Review Committee Leader
Deepan KannanSenior Industry AnalystChemical, Materials, and Foods
(091) 44 66814197
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Contents
Section Slide Numbers
Executive Summary 5
Market Overview 10
Total Market -
• External Challenges: Drivers and Restraints 21
• Forecasts and Trends 29
• Market Share and Competitive Analysis 43
CEO’s 360 Degree Perspective 50
PVC Segment Breakdown 54
Polyolefins Segment Breakdown 70
Fluoropolymers Segment Breakdown 87
Polyamides Segment Breakdown 104
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Contents (continued
Section Slide Numbers
End-user Application Analysis -
• Power Cable Materials Segment Breakdown 120
• Building Wire Materials Segment Breakdown 131
• Communication Cable Materials Segment Breakdown 142
The Last Word (Conclusions and Implications) 153
Appendix 159
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Executive Summary
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Executive Summary
• This study examines the market for polymer materials in the following North American wire and cable end application segments:
o Power cables
o Building wire
o Communication cables
• Because of its sheer volume, the building wire segment, including low-voltage wire and cable, is the biggest segment in the market. This segment has suffered because of the slowdown in construction activities.
• The communication cables segment is growing faster than the building wire segment. In particular, demand for optical fibers is increasing. Due to the relatively lower production costs in emerging markets, power cable production is migrating away from developed markets.
• Many plastics are used as insulation and jacketing materials for wires and cables. The selection of the insulation of jacketing material depends on the material’s ability to meet cable specifications such as voltage rating, electrical transmission, and mechanical and environmental performance.
• The market is dominated by polyvinyl chloride (PVC) and polyolefins, which together account for 85.0 percent of polymer usage in the wire and cable industry.
• The demand for wire and cables, and therefore the demand for the polymers that comprise them, is dependent on growth in infrastructure, power generation, transmission and distribution, industrial development, and commercial and residential construction projects
Source: Frost & Sullivan analysis.
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Executive Summary (continued)
• Major changes in terms of industry structure have been occurring downstream from the suppliers in the North American wire and cables industry.
o Cable manufacturers are consolidating, which has resulted in increased market concentration rates.
o This consolidation has also resulted in the shrinking of the potential market for small, independent compounding producers, as the larger cable companies increase their in-house compounding activities.
• Another trend affecting the industry is the growing awareness of and concern about the environmental effects of toxic emissions from waste disposal and the recycling of plastics, especially those containing halogenated materials.
• Globalization is another trend in the cables industry, and large manufacturers are establishing plants in many different countries. Also, North American cable makers and resin suppliers tend to form strategic alliances on a global scale.
• These structural changes in the cables industry benefit large global suppliers of cable resins and compounds, rather than domestic suppliers that do not have global market coverage.
• Wire and cable materials can be considered commodity products. In such a market, product differentiation, research and development, and branding are extremely important and are key success factors.
Source: Frost & Sullivan analysis.
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Compound Annual Growth Rate
4.6%
(CAGR, 2011–2018)
Market Concentration
34.6%(% of market share held by
top 3 companies)
Executive Summary—Market Engineering Measurements
Market Stage
Mature
Market Revenue
$1,850.3
M(2011)
Market Units (Pounds)
2,302.6 M
(2011)
Average Price Per Pound
$0.80
Market Size for Last Year of Study Period
$2,533.0
M(2018)
Base Year Market Growth Rate
3.5%
Customer Price Sensitivity
9
(scale:1 [Low] to 10 [High])
Degree of Technical Change
5
(scale:1 [Low] to 10 [High])
Total Wire and Cable Materials Market: North America, 2011
Market Overview
For a tabular version click here.
Stable IncreasingDecreasing Note: CAGR = compound annual growth rate. All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.
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Executive Summary—CEO’s Perspective
2Cost is the overall determining factor, and balance between cost and performance is necessary.
3Comprehensive product portfolios that target core customers as well as other niche applications are needed.
4
Continuous research and development (R&D) to develop products that meet clients’ stringent requirements and quality standards at competitive costs will be necessary.
5Strategic partnerships with compounders and cable manufacturers are extremely important.
1Process improvement and optimization are important to achieving cost savings.
Source: Frost & Sullivan analysis.
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Market Overview—Key Questions This Study Will Answer
Is the market growing, how long will it continue to grow, and at what rate?
Who are the leading market participants?
What are the key offerings of the top competitors?
How will the structure of the market change with time? What are the key factors influencing this market?
What are the key cable materials that offer opportunities to material suppliers?
What type of competitors exist in the market, and what is the competitive scenario?
Source: Frost & Sullivan analysis.
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Market Overview—Segmentation
Wire and Cable
Power
Electricity transmission and distribution
(greater than 1 kV)
Building
Low-voltage electricity (less than 1 kV)
Communication
Information (control signals and data), telecommunication
Source: Frost & Sullivan analysis.
PVC Polyolefins Fluoropolymers Polyamides
Wire and Cable Materials
Total Wire and Cable Materials Market: Market Segmentation, North America, 2011
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Market Overview—Segmentation (continued)
Note: All figures are rounded. The base year is 2011 Source: Frost & Sullivan analysis.
The biggest segment in terms of volume and revenue for wire and cable compounds is building wire and cable. In 2011, the segment contributed approximately 39.0 percent of cable material revenue in North America. The power and communication segments contributed approximately 32.0 percent and 29.0 percent, respectively, in 2011. The situation is not likely to change much during the forecast period, as both the power and communication segments are expected to grow at about the same pace.
Power31.2%
Building38.2%
Communication30.6%
Total Wire and Cable Materials Market: Percent Revenue Breakdown by Application
North America, 2018
Power32.0%
Building39.0%
Communication29.0%
Total Wire and Cable Materials Market: Percent Revenue Breakdown by Application
North America, 2011
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Market Overview—Segmentation (continued)
Note: All figures are rounded. The base year is 2011 Source: Frost & Sullivan analysis.
PVC continues to play an important role in the wire and cable material industry. In 2011, PVC contributed to approximately 58.3 percent of total unit shipments. Polyolefins are the next major group of polymers and have been reducing PVC in certain applications, especially in the power cables segment. In 2011, polyolefins comprised approximately 39.2 percent of market volume. Polyamides and fluoropolymers are specialty polymers and contributed to less than 5.0 percent of shipments. Polyolefins are expected to continue to replace PVC when economically feasible.
PVC56.3%
Polyolefins41.1%
Fluoropolymers0.7%
Polyamides1.9%
Total Wire and Cable Materials Market: Percent Unit Shipment Breakdown by Polymer
North America, 2018
PVC58.3%
Polyolefins39.2%
Fluoropolymers0.6%
Polyamides1.9%
Total Wire and Cable Materials Market: Percent Unit Shipment Breakdown by Polymer
North America, 2011
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Market Overview—Distribution Channels
Raw Material Manufacturers
Cable Manufacturers
ExtrudersCompounders
Distributors
Direct Sales
Total Wire and Cable Materials Market: Distribution Channel Analysis, North America, 2011
Source: Frost & Sullivan analysis.
45.0%
Key Takeaway: Direct sales dominate in the market, as many large wire and cable
manufacturers have in-house compounding operations.
15.0%40.0%
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Appendix
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Market Engineering Methodology
One of Frost & Sullivan’s core deliverables
is its Market Engineering studies. They
are based on our proprietary Market
Engineering Methodology. This approach,
developed across the 50 years of
experience assessing global markets,
applies engineering rigor to the often
nebulous art of market forecasting and
interpretation.
A detailed description of the methodology
can be found here.
Source: Frost & Sullivan research.
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Additional Sources of Information on Wire and Cable Materials
Other studies include:
• M78E-01: Analysis of the Cable Manufacturing Materials Market and Current
Dynamics of Local Materials Suppliers
• M743-01: Strategic Analysis of Plastics in the Electric Vehicles Market in Europe and
North America
• 3817-01: European Plastics in Wire and Cable Applications Markets
• M73D-01: Chemicals and Materials Market in Smart Grid Infrastructure
Source: Frost & Sullivan research.
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