In 1995 PCRS researched and published its seminal study of the North American industrial thermoforming business. We updated that analysis in 1998 and again in 2001. We determined from these three analyses that the regional industrial thermoforming business was growing at an average annual rate of 6%. The overall value of this business as of 2000 was $2.3 billion, and it accounted for over 1 billion lbs. of plastic material consumption.
Over the period August-October 2004 we revisited this business, interviewing officials at over 100 U.S. and Canadian processors and many of the companies on their material/machinery supply chain. We determined that over the period 2000-2003 there was no growth in the value of thermoformed industrial part output. The primary force behind this pause in the growth of thermoformed industrial part output was the difficult economic conditions confronted by their customers in U.S. and Canadian manufacturing. The recession of 2001 inevitably impacted negatively on the automotive and non-automotive plastic part supply chain. In addition, the relocation of domestic manufacturing to Asia and the outsourcing of part production and assembly operations exacerbated the slowdown in domestic plastic part demand. This left many regional industrial thermoformers with excess capacity, and it resulted in a slowdown in industrial thermoforming machinery and auxiliary equipment sales.
Here in 2004 there are clear signs of recovery in the demand for industrial thermoformed parts made from light-gauge film and heavy-gauge cut sheet. Automotive production and residential building activity have remained strong, and other industries - appliances, the marine industry, recreational vehicles and watercraft, signs and displays for the retailing sector - are demonstrating renewed vigor. Overall this business should register 3.5-4.0% growth by year's end.
The consensus among the processors is that there are significant technological changes in plastic sheet offerings, and there are ongoing innovations in thermoformed part decoration. The paint film technology has been gestating for over 20 years, and in recent years it has reached commercial status in OEM and aftermarket automotive parts. Meanwhile several companies are developing technologies that promise to revolutionize the production of boat hulls and other very large thermoformed parts.
Whereas North American injection molders have been severely impacted by competition from China over the past five years the thermoformers will probably confront growing Chinese competition over the next five years. The obstacle that Chinese and other Asian thermoformers faced in the past was poor quality sheet, and that is about to change. The domestic industrial thermoformers need to continue to review their entire operations to make them more efficient, and they also need to address more aggressively the opportunities that still exist to convert non-plastic materials to plastics and alternative plastics processing methods to the cost/ performance benefits of thermoforming.
ABOUT THE AUTHOR
Dr. Peter J. Mooney is the founder and president of Plastics Custom Research Services. Dr. Mooney holds a Ph.D. in economics from the University of North Carolina, and he has covered the plastics industry as a technical/economic market research analyst and consultant since 1980. He is a member of several plastics industry associations such as the Society of the Plastics Industry, the Society of Plastics Engineers, and the Association of Rotational Molders International. He is also a member of the National Association of Business Economists. He has researched and written over 75 multi-client reports, as well as over 100 single-client reports, in the field of plastics and related industries. He has organized, chaired, and made presentations to numerous conferences on critical issues facing the domestic and global plastics industry.