Principia Reports Continued Rise in Natural/Wood Plastic Composites; 26% Annual Growth in North America since 1998

    EXTON, Pa.--April 30, 2003--Natural and wood fiber plastic composites (WPC) continued their excellent market growth in North America in 2002 with demand reaching 1.3 billion lb, valued at $700 million.
    This represents a 26% annual growth since 1998. Only a moderate slowdown is seen in the future as these composites continue their market penetration in building product, infrastructure, transportation, and consumer/industrial applications. According to a study recently completed by Principia Partners, North American growth for WPCs will continue at 20% through 2005 and 14% to 2010.
    Building products, specifically decking and railings for both residential and commercial installations, are the major market for WPCs accounting for almost two-thirds of North American demand in 2002. These applications are expected to continue to dominate through the end of the decade with growth predicted at 16% per year as WPCs capture market share from pressure-treated and specialty wood materials. However, several other new and emerging applications will also experience exceptional growth through the end of the decade. Some WPC applications which will achieve growth of 20% or more per year include:

    -Shingles

    -Siding

    -Window profiles

    -Patio furniture

    WPC shingles will occupy a niche in the market, particularly in areas prone to high winds, hail, and/or wild fires. For siding and siding accessories, a new technology developed by Boise is expected to compete with cellular vinyl and other specialty trim products. WPC window profiles made of polyethylene or PVC are less costly than current window profile materials - vinyl and wood. In addition, they are more durable than wood and more aesthetically pleasing (less glossy) than vinyl.
    Polyethylene will remain the primary matrix resin for WPCs through 2010. The resin provides adequate product performance, is generally available as wide-spec resin and post-consumer scrap, and is cost effective in these applications. But PVC-based wood composites are projected to have a 20% annual growth through 2010.
    Driven by the replacement of both wood and vinyl in window and door components and new decking and railing products, PVC wood composite demand is expected to increase by over 400 million lb in the next eight years. Polypropylene is also expected to gain momentum as more decking producers move to this polymer because of the tightening supply of post-consumer polyethylene.
    Although more than 50 companies are active in the North American market for WPCs, the ten largest account for 75% of the market. Such well known companies as Trex, TimberTech, Louisiana Pacific, AERT, and CertainTeed lead in sales, but numerous other companies also compete in one or more applications. Most of these companies manufacture polyethylene composites, with only a few participants in PVC-based products, led by Andersen and CertainTeed.
    Principia's new study, WOOD PLASTIC COMPOSITES 2003, covers the markets for building products, automotive, infrastructure, and industrial and consumer in both North America and Western Europe. It includes estimates of current and future demand in each of these segments as well as technology developments, channels of distribution, competitive materials and profiles of leading producers.
    Principia Partners is recognized as the leading consultancy serving the WPC industry and the world's preeminent source of WPC market information. Principia Partners is an international business consulting firm serving the plastics, building products, packaging, metals, and specialty chemicals industries. For more information, visit the company's web site at www.PrincipiaConsulting.com. For a prospectus on the study, call Lou Rossi at 484/459-2238.