In the past three years, the market for WPC products has really started to develop in Europe, and demand now stands at just under 100,000 tonnes, says AMI. Most of this is for PVC-based decking material and other exterior building products but there are other experimental applications in development. The slowdown in the economy has meant that some spare capacity has become available for trial production runs, widening the scope and potential for WPCs. Despite the downturn in the construction market in 2009, use of WPC products still grew – and Nash forecasts robust future growth over the next three years of 17%/year.
The European market has developed differently to the much larger US market. Europe has focused on generating the technology, but has sold relatively little product. In the US, producers concentrated on putting product into the market early and worrying about the technology later. So a well established market has developed in the US for decking and fencing, but the product was at times of poor quality. This has led to many class actions against the established suppliers and some turmoil in the business, but the industry is now reshaping itself with existing producers moving up market and improving product quality. In Europe there has been a much more cautious approach, so the market initially developed more slowly. As a result the public does not have any negative images of the product – but one could argue that the public has no image of it at all. The industry’s challenge is to get it more widely accepted in the market place and build a brand image for WPC – as the market leader, Trex, has done very successfully in the USA.
Despite the positive development of the industry in Europe in recent years and the well established technology for it, WPC still faces many technical challenges which investors have not always fully appreciated. A key challenge is its weight and high density which tends to undermine the commercial proposition. This has led to processors looking to develop hollow cored or foamed core profiles.