PVC Pipeline Industry Status Quo and Challenges

Zhanjie Wang

Executive Vice Chairman and Secretary-General China Plastics Piping Association (CPPA)

Status Quo of Plastic Piping Industry

Application of PVC Pipes

Challenges Facing PVC Piping Industry

Suggestions for PVC Piping Industry

Contents

1.1 China is the largest

plastic pipe manufacturer and consumer in the world.

Statistics show that plastic

pipe production reached

8.402 million tons in 2010, YoY

growth 37.1%.

Production in 2011 may grow by

20% and reach 10 million

tons.

240290

350

200

580

840

1000

0

100

200

300

400

500

600

700

800

900

1000

2005 2006 2007 2008 2009 2010 2011

1. Status Quo of Plastic Piping Industry

1.2 Diversified materials and varieties of

plastic pipes.

• PVC\PE\PP

• New and modified materials

• Composite pipes

PVC55%

PE30%

PP10%

其他5%

Others

1.3 Most of the manufacturers are located in developed areas,

but some are now relocating to other areas. Capacity concentration in coastal and developed areas.

Capacity and production of Guangdong, Zhejiang and Shandong account for

one third the country's total capacity and production, but the share is now

shrinking.

A large portion of the capacity expansion comes from leading companies,

and most of them choose expansion in different areas. Driven by local

demands, new capacity is geographically diversified, and the industrial

pattern is gradually rationalized.

2006 Guangdong, Zhejiang, Fujian 50.2 %

2007 Guangdong, Zhejiang, Shandong 49.8 %

2008 Zhejiang, Guangdong, Shandong 51.0 %

2009 Guangdong, Zhejiang, Shandong 45.0 %

2010 Guangdong, Zhejiang, Shandong 38.0 %

1.4 The industry values technological advance.

• Technological advance facilitates growth in application of plastic pipes.

• Increasing international exchanges urge manufacturers to attach more importance to development and introduction of new products by enhancing R&D strength.

• More and more new varieties, structures, materials, techniques and technologies as well as patented projects are emerging in the plastic piping industry.

• Development of highly functionalized plastic pipes. • The gap between China and developed countries in terms of

plastic piping technologies is narrowed.

1.5 Internationalization: the general trend.

• Industrial development has attracted foreign enterprises to enter China market through various channels and manufacture their products in China-based facilities. As a response, Chinese enterprises are now enhancing their innovation.

• The quick development of pipe market also attracted more equipment manufacturers to move their facilities to China, and some material/additive companies have set up their solely owned factories or joint ventures to produce and market their products.

• On the other hand, Chinese enterprises are

selling their products to overseas markets:

export volume grew steadily in recent years.

1.6 Product quality of leading manufacturers

improves gradually. 12 manufacturers won the title of “China Top Brand” Nearly 20 “Famous Chinese Trademark” More than one hundred local brands and famous trademarks Product quality of leading manufacturers improves gradually

Application widened in recent years – blood vessels of the city, part of people’s life

Plastic pipes are now widely used in water supply/drainage, HVAC, mid/low pressure gas transmission, rural potable water security, new rural district construction, methane transmission, agricultural irrigation, communication, fishery, transportation, chemicals, power, mining, automobile, shipbuilding, seawater desalination, etc.

According to some experts, plastic pipes now have a share of 30% in China’s pipe market.

2. Application of PVC Pipes

PVC is the plastic variety with the longest history in pipe making,

the most developed technology and the largest production and

consumption.

Advantages (over other plastic pipes):

1. High strength;

2. Easy installation with lower cost;

3. High elastic modulus;

4. High fire retardancy.

Disadvantages:

5. Low thermostability;.

6. Fragile at low temperatures

Most of the plastic pipes are made of PVC-U (55%). They are used

in water supply/drainage and as pipe sheath. Among the PVC-U

pipes about 40% are used in water drainage, most in buildings; 30%

used in water supply, and 20% as pipe sheath.

The remaining 10% are hoses and laminated tubes used in

transmitting liquids, powders, gasses and mixtures.

PVC-U pipes make up 60% of domestic constructional plastic pipes.Water supply pipes (diameter 20-800)Reclaimed water pipes (diameter 20-800)Water drainage pipes (hollow-wall pipes, foam core pipes, spiral muffler pipes, diameter 50-250)Electrical sleeve pipes (diameter 16-40)Double-wall corrugated pipes and single-wall corrugated pipes (diameter 110-1200) Reinforced pipes (diameter 200-600) Solid-wall buried blow-off pipes (diameter 200-630) Communicational cellular pipes Winding pipes (diameter 300-2000)

PE 管道Municipal PVC-U pipes

Constructional PVC-U pipes

PVC-M pipes

Constructional PVC-U water drainage pipes

PVC-U hollow-wall pipes

PVC-U pipes are still dominant in the market

Growth of PVC-U pipes is still slower than other varieties such as PE, despite the dominance of PVC material in the plastic piping industry.

PVC-U pipes have the advantage of cost effectiveness, but also have the disadvantages of fragility and performance degradation at low temperatures.

Consumers bring forward higher requirements on safety, credibility, health and environmental protection.

The market is not standardized so far, causing more problems.

3. Challenges Facing PVC Piping Industry

Substitution of lead salt thermal stabilizer for PVC pipes:

• European PVC industry has promised to stop using lead salt thermal stabilizer by 2015.

• TEPPFA agreed to substitute 75% by 2010 and 100% by 2015.

• In the Bulletin on Promulgation of Popularize Application and Prohibited Use Technology in Ministry of Construction dated March 18 2004, the Ministry of Construction calls for wider application of plastic such as PVC-U pipes in civil water supply and building water supply, but also specifies that PVC-U pipes “must not be made with lead salt stabilizers”.

• GB/T10002.1-2006 Unplasticized Polyvinyl Chloride (PVC-U) Pipes for Water Supply (took effect on August 1, 2006) prohibits using lead-bearing stabilizers in drinking water pipes.

Industrial development goals

• The industry will maintain a growth rate above 10% and keep developing in a stable and quick manner. National production of plastic pipes may reach 13.2 million tons by 2015.

• Priority will be given to PVC-U, PE and PP pipes; meanwhile development of modified, composite and other new plastic pipes will be enhanced.

• On the basis of wider application in municipal, construction, water conservation and other fields, new applications will be actively explored.

• Technical advancement, fundamental research and innovation ability should play a more active role in adjustment of product structure and development of new, composite and modified materials as well as new types of pipes, so as to meet market demands with full range of products with good quality, and upgrade piping industry against internationally advanced levels.

4. Suggestions for PVC Piping Industry

Plastic pipes for municipal construction will be the key area of application in the years to come

• Quicken pace of urbanization, increased number of municipal construction projects and importance attached to environmental protection will drive huge demand for plastic pipes used in water supply/drainage, gas transmission, underground power/communication facilities in the next few years.

Application of plastic pipes in water drainage and wastewater treatment will grow at high rates

• The government is paying more environmental protection, and will invest large funds in construction of urban wastewater treatment facilities and water drainage networks. The overall plan for energy conservation in the “12th Five-year Plan” set the goals of 42 million tons of new capacity for wastewater treatment, 159,000km of new networks, and wastewater treatment rate should reach 85% in urban areas.

Rural construction projects: the largest market of plastic pipes

The “12th Five-year Plan” of the Ministry of Water Resources: drinking water safety should be ensured in all rural areas by 2015, covering 298 million rural population and 114,000 schools in rural areas, and centralized water supply network should cover 80% of rural population.

The statistics in 2005 shows that 96% of Chinese villages do not have water drainage and wastewater treatment systems.

By 2015, 190 large-sized, 800 key mid-sized and 1,500 ordinary mid-sized irrigation districts will be renovated for water conservation, and by 2020 all large-sized and key mid-sized irrigation districts must finish the renovation.

National irrigated area should reach 760 million Mu by 2020, and effective utilization factor of irrigating water should reach 0.55.

Domestic PVC Capacity 2005-2011 (in 10,000t/a)

Adjustment of PVC-U product structure: PVC-C pipes. PVC modified (PVC-M) and oriented (PVC-O) are developing quickly, and production/application of PVC-M already seen in the industry.Mass production of graft modified PVC resin.PVC-X pipes.

2005 2006 2007 2008 2009 2010 2011

Capacity 972 1158 1520 1581 1781 2043 2162

• Pipes made of new types of material, modified, a composite and

environmentally friendly plastics should be developed and

manufactured. R&D of products with high added values and high

performance should be enhanced to meet the requirements of

various application fields such as environmental protection,

energy conservation, sterilization, thermal insulation, oxygen

barrier, earthquake protection, noise reduction, etc.

Our advantage in PVC resin capacity should be fully utilized to

facilitate standardization of PVC piping industry and

technological advancement. Application of PVC pipes should be

further widened to increase market share by improving overall

performance of PVC pipes through technical studies such as

PVC-M, PVC-O, etc.

• Technologies and supporting facilities should be further

upgraded for water drainage pipes, floor heating pipes, ground

source heat pump pipes, solar hot water pipes, reclaimed water

pipes, indoor ventilation pipes and other construction

applications.

• R&D, production and application of large-

diameter structure-wall plastic and plastic-

steel pipes, rainwater reclamation,

storage and utilization systems, large-

diameter pressure plastic pipes and other

municipal/rainwater systems should be

enhanced.

• Non-excavating technologies should be

generalized in construction of buries

pipes, including repair of existing pipes.

Meanwhile, development and application

of HDPE, stress resistant and other pipe

materials should be facilitated.

• Industrial plastic pipe market should be further

expanded by introducing ware/corrosion/heat

resistant pipes for transmitting high/medium

pressure petroleum and flame retardant/

antistatic pipes for mining applications, such as

those made of UHMW-PE (molecular weight

over 2.5 million), special materials and

composite materials.

• Plastic piping accessories should be further

refined, and research/application of tubes,

valves and inspection wells should be

enhanced to improve safety and reliability of

pipe systems.

• Substitution of the lead salt thermal stabilizers

used in PVC-U pipes (by environmentally

friendly thermal stabilizers) should be carried

on.

Growing demand for plastic pipes with better quality Safety and reliability are the most basic requirements of the high-end market. As market standardization continues, quality plastic pipes will become dominant in the market.

Revival of PVC pipe market is around the corner!

中国塑协塑料管道专业委员会 （ CPPA ）简介

隶属于中国塑料加工工业协会，专业从事塑料管道生产和相关单位 的社会团体。成立于 1986 年。 集中了塑料管道生产企业、科研院校、检测机构，相关生产企业等，目前

400 家会员单位，覆盖行业 70% 左右的生产能力。 企业与政府部门，与科研机构，与市场的桥梁和纽带。 引导行业向健康方向发展，提升行业整体水平。 加强行业管理，为行业和用户服务。 网站及刊物 ＷＷＷ .ppia-china.com 《中国塑料管道资讯》

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