High-Performance and Product Differentiation Critical for Success in the Elastomers Market

Mergers and acquisitions to help participants make inroads into regional markets

01-Jun-2015 - United Kingdom

The global elastomers market is all set to usher in an era of innovation with original equipment manufacturers (OEMs) increasingly demanding high-performance materials. Owing to the profusion of choice, customers are likely to base their purchase decisions on performance metrics such as durability, product finish, and flexibility of use. This, in turn, compels smaller companies to focus on product development to stay competitive.

New analysis from Frost & Sullivan, Analysis of the Global Elastomers Market finds that the total market was worth $21.52 billion in 2014 and is expected to grow to $34.73 billion in 2021.Compared to synthetic elastomer (SE), the thermoplastic elastomers (TPE) segment is expected to grow faster.

Currently, the TPE segment is the torchbearer for technological advancements. Its primary focus is on improving processing attributes and enhancing design flexibility, while the product’s inherent advantage of high recyclable content makes it the material of choice for sustainable solutions. As TPE enables a wide range of applications, it is rapidly attracting business from a diverse range of end-user markets, especially the fast-growing consumer electronics market.

“Meanwhile, OEMs are also making a beeline for non-latex solutions due to escalating environmental concerns and biohazard and skin sensitization issues in the medical and hygiene industry,” said Frost & Sullivan Chemicals, Materials & Food Research Analyst Shubhayan Sarkar. “This bodes well for SE compounds, as they offer superior flexibility and tactile sensitivity.”

Despite the vibrancy of the market, it is facing competition from alternative materials such as polyvinyl chloride (PVC) and specialty plastics. The market can take heart from OEMs’ evident desire to replace these materials in several applications. This has opened up the market to elastomers vendors that are able to substitute PVC and metals with competing plastic compounds as well as reinforced and composite materials.

The global market for elastomers is expected to thrive even with the saturation of the manufacturing bases in North America and Western Europe, as the burgeoning of end industries in Asia-Pacific and Rest of the World has restored balance to the market. Still, factors such as the declining demand of solid wire and cable in external insulation and the high cost of switching to TPE can dampen the growth of the elastomers market.

Another serious concern for the market is a possible raw material shortage. However, participants can stave off this challenge through vertical integration. Consolidations with regional participants with specialised product capabilities will also allow larger companies to boost their market share and regional visibility. Partnership agreements involving compound/component manufacturers and OEMs will become more prevalent for specific application segments.

“Polymer manufacturers that are backwardly integrated will have better control over the volatility of raw material prices, which will help them maintain a competitive edge in the long run,” noted Sarkar. “Overall, a consistent supply of high-performance products will be the key differentiator among market participants.”

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