ACC: North American polyurethanes market outpacing economy

Growth in the North American polyurethanes (PU) market is on track to exceed the region’s overall economic expansion as the polymer continues to increase its penetration in multiple industries with newer applications.

As PU industry executives gather in Dallas, Texas, this month for the Polyurethanes 2014 Technical Conference, the horizons for PU applications appear to be wider and more promising than ever, according to industry leaders.

Gerry Podesta, chairman of the Center for the Polyurethanes Industry (CPI), holds that “prospects for the polyurethanes industry continue to be very strong” in large part because PU is “so broadly dispersed across all industries”.

Rex Features Delegates are heading to Dallas, Texas, for the Polyurethanes 2014 Technical Conference

“Its versatility as a product in new applications, new uses, new penetrations is fuelling its growth,” Podesta says. “Polyurethane fits into so many applications and opportunities – energy conservation, light-weighting and sustainability among others. As we see those sectors continue to grow, there are so many ways for PU to be used.”

Even if, for example, the US economic recovery should continue to go along at a perhaps mediocre 2% annual GDP growth rate, Podesta sees the PU industry as having a greater potential for growth.

“While we may see the US economy at some GDP rate, the PU industry has been able to stay above that because of broader penetration into industries that are driving the overall economy,” he notes.

In his role as senior vice president for performance materials in North America for BASF, Podesta sees broad potential for PU to expand its market penetration in such areas as sustainability and energy conservation.

“In all industries, there continues to be a need for more energy conservation, including refrigeration, water heating, industrial buildings, refrigerated transportation, retail refrigeration, and more.

“All industry is driving toward more energy efficiency,” Podesta says, “and while there are alternatives to polyurethane to provide insulation and energy conservation, polyurethane continues to be the most versatile and certainly the most effective insulation material.”

“As long as our industry can continue to articulate the cost-benefit advantage of our product, we have a long way to go in penetrating this space,” he adds.

CPI vice chairman Tom Feige shares Podesta’s optimistic view for the North American PU marketplace. “If you look throughout the entire economy, polyurethane is everywhere, in every part of it, in many different applications in the home or the office, it’s everywhere,” he says, citing in particular such diverse sectors as appliances, shoes, clothing and automotive seating.

CPI seeks to draw attention to the broad applications field for PU, “from making sneakers and car bumpers lighter and more impact absorbent, to enhancing the comfort of furniture and mattresses, to improving the energy efficiency of homes and appliances, to protecting the shiny appearance of automobiles.”

With PU a critical component in the products people use each day, CPI notes that the PU industry operates in nearly 1,000 locations in the US, directly generating $26.5bn (€20bn) in output and 46,500 jobs.

“We want to recognise this nearly $27bn industry and the many ways polyurethanes are used in products that we take for granted every day,” says Lee Salamone, CPI senior director within the American Chemistry Council (ACC).

“Polyurethane’s versatility and durability are essential in a number of industries from construction to furniture, to clothing, to automotive and we look forward to celebrating the incredible success of polyurethane-enabled products with these industries,” Salamone says.

EXPANDING CONSTRUCTION USES

Feige, polyurethanes global strategy director at Dow, sees the PU sector’s growth as based as much on application migration as it is on the growth of the underlying economy. For example, in the housing sector, “generally we’re seeing a recovery mode”, he says. “There is volatility here and there in the housing industry, but the trend line continues to demonstrate growth.

“But it is not necessarily new home construction growth that is driving this segment of the PU market,” says Feige, “it also is due to new uses for PU in the housing sector. Five years ago, 10 years ago, you didn’t see that many homes being built with spray-foam insulation, but now it is one of the fastest growing segments – because it delivers a benefit to society.”

He says that more PU adhesives are being used in home construction, “providing better bonds than nails and studs, reducing squeaking in flooring, sealing up gaps in home construction that otherwise might invite bugs, water penetration”.

“We’re seeing more substitutions for PU in the housing sector,” Feige says, citing in particular oriented strand board (also known as particle board) where PU is making inroads.

“Oriented strand board typically has used formaldehyde as the adhesive,” Feige points out, “but a lot of building codes in an increasing number of states have forced a shift to a PU adhesive for those wood products.

“So even though the housing recovery is slow, we’re seeing more use of PU in those new homes,” he says. Consequently, the PU market is growing faster than the housing recovery itself.

The way forward for the North American PU market, says Feige, is reflected in the long-established role of PU in many current applications. “In our history, PU has brought many different value attributes to our society and our way of life, and we’ve forgotten some of them and we take some of them for granted,” he says.

“Take shoes. This was a major innovation for polyurethanes. For centuries shoes were leather – and that was it,” he notes. But contemporary man is more often than not wearing shoes that are in some part PU-based.

The same is true in multiple other areas of everyday life, Feige contends, including bedding, furniture, clothing and coatings, among many others. “It’s there every day,” he says of PU. “We’re sitting on it, sleeping on it, driving our cars with it, and PU has enabled a lot of these values to society – and yet it doesn’t get the credit.”

One of the objectives of this year’s Polyurethanes Technical Conference, says Feige, is to “highlight and showcase new innovations in PU applications, not just to our own industry but to consumers as well”.

Among the technical sessions at the event will be innovations in blowing agents, flame retardants, coatings and adhesives, elastomers, flexible foams and sprayed polyurethanes.

Podesta is also looking to raise the profile of PU among consumers, the millions who make daily use of polyurethane products or items with essential PU components. “I would say that our largest concern now is around public perception of our industry and government actions around the industry,” Podesta says.

He points to CPI’s new website, built around the “Versatile. Durable. Incredible. Polyurethane.” message. The website (www.incrediblepolyurethane.com) is aimed at consumers, not just at those within the industry, adds Podesta. “We’re aiming at the consumer who doesn’t know what the word ‘polyurethane’ means, and at those who may not know what a big role polyurethane plays in our lives everyday,” he says.

POSITIVE IMAGE FOR PU

“PU is a very safe finished product,” Podesta notes. “Its feedstocks need to be safely handled, but there is a lot of misinformation going around that is attributing the feedstock risks to the finished product.

“Two things we’re doing about this,” he says. “One is the new website, where we talk about the exciting things that are happening in polyurethanes, seeking to educate the public, point out what PU does for us in our everyday lives, and raise the word ‘polyurethane’ as something positive.”

“We’re working hard in this,” Podesta says. “We can’t be sure where the next issue is going to come from, but we know the word ‘polyurethane’ is not well known, despite the fact that people touch it every day of their lives.”

Second, CPI also is focused on advocacy in answering questions raised by various federal or state regulatory agencies. Podesta points out that CPI has a strong and ongoing relationship with the US Occupational Safety and Health Administration (OSHA) to ensure the safe and proper use of PU spray foam, workers using the product are properly protected and the sort of training that applications workers need.

He notes OSHA inspectors have been visiting work sites to ensure that PU products are being used properly and safely, “and we support that”. CPI is also working with the government in California on that state’s new Safer Consumer Products Act and its possible resulting regulations.

Podesta says California officials are looking at a broad range of products, targeting certain chemicals and looking for alternatives. “They’re looking at isocyanates, especially in spray polyurethane foam,” he says, “but we’re pointing out that SPF is a very safe product if handled properly.”

“There is a lot of misinformation out there,” he says, “and we’re concerned that California may move with regulations on PU without adequate science and consequently make it difficult for us to do business in California – so we’re focused on that.”

Feige also voiced concerns about the perceptions of polyurethanes, either among the public or with regulators. “For CPI, our charter is to advocate for our members and our industry stakeholders, and that means getting the message out on the benefits that we bring to society,” Feige says.

The new website – www.IncrediblePolyurethane.com – “broadens public awareness of the benefits of polyurethanes, its value as a versatile and durable product, and the website highlights new applications”.

“Definitely, one of our top priorities is to broaden that public awareness,” Feige says. “What I tend to look at is that we’re always being challenged to be relevant to our end-users,” he says. “We are under pressure to innovate, to bring new value to our customers – otherwise we risk being irrelevant and obsolete.”

Among the pressures facing the PU industry, says Feige, is the sustainability challenge. “We have a good story on sustainability, especially in PU’s role in reducing energy use,” he says. “It is a lot easier to use energy more efficiently than to go out and get more energy.

“So I think we have pressure and an obligation to bring a sustainable product mix for our customers and stakeholders,” he says.

“As a leadership team, we will emphasise this at the technical conference and challenge our industry to continue to innovate and collaborate so that we can bring these new value-added applications and products back to our stakeholders,” he says.

MESSAGE TO DELIVER

Podesta says CPI is ramping up its outreach program, looking for ways to take the PU message to an increasingly broader community. “We have to get our message out,” he says. “We have to communicate the magnitude of the good we bring to society, in terms of energy savings among other things.

“But that’s not easy to do,” he notes. “CPI is not a huge organisation and we don’t have unlimited funds.” So CPI launched a new outreach campaign through the internet and the multiple social media venues.

“If we do this right, it can be very effective and at a much lower cost approach [than mainstream advertising media],” Podesta says. “We are looking to have an impact through the internet and social media, and we’ll be working to ensure that we are measuring ourselves in terms of public perception.

“We, at CPI, are focused on three main areas,” he says. “We are putting our money into outreach, including the new website as one measure, and we continue as a top priority having the best annual technical conference and to continue to grow that and make it highly valuable.”

“Third, advocacy for our industry. We have to go from issue to issue and focus our outreach on advocacy for our product.

“We have to provide correct data and bring the correct science to each issue as it arises,” Podesta says. “This is the value of CPI. We’re not here for any other reason than to advocate for the polyurethanes industry and to defend the validity of PU as a safe and effective material in the marketplace,” he adds.