Thermoplastic Compounding by Independents

SUMMARY

US demand to increase 4% per year through 2008

Demand for thermoplastic compounding performed by independent firms isprojected to rise four percent annually to 7.6 billion pounds in 2008, valued at$6.8 billion (resin content only). Including additives, fillers and otherproduction costs, the total value will reach $14.6 billion. Value gains will besupported by a shift in the product mix toward higher performance specificationsand increased raw material costs. Advances in filler types e.g., nanocomposites)and compound forms (e.g., micropellets) that offer performance and processingimprovements will also stimulate demand.

TPEs to lead gains

Thermoplastic elastomers TPEs) will exhibit the strongest growth due toongoing displacement of competitive materials, along with wider usage. Continuedgrowth is expected in the overmolding of TPEs onto rigid plastic or metalcomponents in order to enhance ergonomic or soft-touch" features of variousproducts. Polypropylene will also register above-average gains stemming from acompetitive pricing structure and diversity of applications, as well asmanufacturing and catalyst technology enhancements that will result in improvedresin performance and processability. Engineered thermoplastics advances will bebased on expanded needs for custom tailored formulations with higher performanceranges, coupled with ongoing processing technology and resin improvements.

Electrical & electronic, motor vehicle uses to see best prospects

The electrical/electronic and motor vehicle markets will present thestrongest opportunities for independent compounders. Electrical and electronicuses will be stimulated by higher performance requirements in housings, plugs,connectors and other products and components. Motor vehicle applications will bedriven by needs to improve vehicle durability and fuel efficiency, which can beachieved through the use of stronger and lighter weight materials. Consumer andinstitutional uses will be led by rapid gains in medical applications, includingneeds for cost-effective materials that are capable of withstanding repeatedsterilization cycles.

Independents to remain a factor

Independents will continue to account for eight percent of thermoplasticcompounding demand through 2008. Independent compounders have advantages overresin producers and processors such as quicker delivery times, more personalizedservice, a wider range of formulation capabilities and a willingness to supplysmaller orders. Recent consolidation in the industry has blurred the distinctionbetween resin producer compounder and independent compounder, especially incases where the acquired compounder produces a wider range of compound typesthan those offered by the resin producer.

Study coverage

This new Freedonia industry study, Thermoplastic Compounding. It provideshistorical US demand data (1993, 1998, 2003) and forecasts to 2008 and 2013 byresin and market. The study also presents company market share data and profiles38 industry competitors.

TABLE OF CONTENTS

INTRODUCTION

I. EXECUTIVE SUMMARY

II. MARKET ENVIRONMENT

General

Macroeconomic Outlook

Consumer Income & Spending Trends

Demographic & Household Trends

Manufacturing Outlook

Building Construction Outlook

Residential

Nonresidential

Thermoplastic Industry Trends

Thermoplastic Compounding Overview

Market Trends

Resin Pricing Trends

Regulatory Considerations

Recycling Activity

International Activity

III. RESINS

General

Engineered Thermoplastics

Characteristics & Producers

Markets

Acrylonitrile-Butadiene-Styrene

Polycarbonate

Nylon

Thermoplastic Polyester

Polyacetal & Other

Polyvinyl Chloride

Characteristics & Producers

Markets

Polypropylene

Characteristics & Producers

Markets

Polyethylene

Characteristics & Producers

Markets

Thermoplastic Elastomers

Characteristics & Producers

Markets

Polystyrene

Characteristics & Producers

Markets

IV. MARKETS

General

Construction

Resins

Applications

Pipe & Fittings

Siding, Windows & Doors

Other Applications

Motor Vehicles

Motor Vehicle Outlook

Demand by Vehicle Type

Resins

Engineered Thermoplastics

Polypropylene

Thermoplastic Elastomers

Other Resins

Applications

Interior

Engine & Mechanical

Structural & Exterior

Consumer & Institutional

Resins

Polyvinyl Chloride

Polypropylene

Engineered Thermoplastics

Thermoplastic Elastomers

Other Resins

Applications

Electrical & Electronic

Electrical & Electronic Sector Trends

Resins

Applications

Insulated Wire & Cable

Insulated Wire & Cable Outlook

Resins & Applications

Other Markets

Appliances

Appliance Industry Trends

Resins & Applications

Packaging

Packaging Industry Trends

Resins & Applications

Industrial

Industrial Machinery & Equipment Outlook

Resins & Applications

All Other Markets

V. INDUSTRY STRUCTURE

General

Market Share

PolyOne

Ampacet

A. Schulman

Teknor Apex

Ferro

Spartech

LNP Engineering

Acquisitions & Divestitures

Types of Compounders

Resin Producers

Processors

Independent Compounders

Toll Compounding

Custom Compounding

Proprietary Compounding

Concentrate Compounding

Marketing Strategies

Channels of Distribution

Research & Development

Competitive Strategies

Cooperative Agreements

Company Profiles

Adell Plastics Incorporated

Advanced Polymer Alloys LLC, see Ferro Corporation

Albis Plastic GmbH

Alliance Alloys LLC, see GLS Corporation

Alloy Polymers Incorporated

AlphaGary Corporation, see Rockwood Specialties

Group Incorporated

Americhem Incorporated

AMETEK Incorporated

Ampacet Corporation

Asahi Kasei Corporation

Bayshore Industrial Incorporated, see ICO Incorporated

BIP Group Limited, see Chem Polymer Limited

Chem Polymer Limited

Clariant International Limited

Colorite Polymers, see Tekni-Plex Incorporated

Dainippon Ink and Chemicals Incorporated

Dover Chemical Corporation, see ICC Industries

Incorporated

Dow Corning Corporation

Ferro Corporation

Foster Corporation

General Electric Company

GLS Corporation

GWB Plastics Holding Company, see Spartech

Corporation

Heller (H.) & Company Incorporated

ICC Industries Incorporated

ICO Incorporated

Infinity Color, see Penn Color Incorporated

J-Von NA LLC

Lati Industria Termoplastici SpA

LNP Engineering Plastics Incorporated, see General

Electric Company

Lubrizol Corporation

Matrixx Group Incorporated

Muehlstein (H.) & Company Incorporated

Multibase, see Dow Corning Corporation

Novatec Plastics Corporation Incorporated, see PVC

Container Corporation

Noveon Incorporated, see Lubrizol Corporation

O\'Neil Color & Compounding Corporation, see

ICC Industries Incorporated

Penn Color Incorporated

Plastics Color Corporation Incorporated, see PMC

Global Incorporated

PlastxWorld Incorporated

PMC Global Incorporated

PMC Group Incorporated

Polymer Products Company Incorporated, see PMC

Group Incorporated

PolyOne Corporation

Premier Polymers Incorporated, see Dainippon Ink

and Chemicals Incorporated

PVC Container Corporation

Quality Colour Incorporated, see Clariant International

Limited

RheTech Incorporated

Rockwood Specialties Group Incorporated

RTP Company

Schulman (A.) Incorporated

Spartech Corporation

Standridge Color Corporation

Sunprene Company, see Schulman (A.) Incorporated

Techmer PM LLC

Tekni-Plex Incorporated

Teknor Apex Company

Thermedics Polymer LLC, see Lubrizol Corporation

Total Compounding Solutions, see Matrixx Group

Trinity Specialty Compounding Incorporated, see

Muehlstein (H.) & Company Incorporated

Washington Penn Plastic Company Incorporated

Westchester Plastics, see AMETEK Incorporated

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table

SECTION II -- MARKET ENVIRONMENT

1 Macroeconomic Indicators

2 Consumer Income & Spending Patterns

3 Demographic & Household Trends

4 Manufacturers' Shipments

5 Building Construction Expenditures

6 Residential Building Construction Expenditures

7 Nonresidential Building Construction Expenditures

8 Thermoplastics Demand

9 Independent Thermoplastic Compounding Market Trends, 1993-2003

10 Comparative Thermoplastics Prices

SECTION III -- RESINS

1 Independent Thermoplastic Compounding Demand by Resin

2 Independently Compounded Engineered Thermoplastic Demand

3 Independently Compounded Engineered Thermoplastic Demand by Market

4 Independently Compounded Polyvinyl Chloride Demand

5 Independently Compounded Polyvinyl Chloride Demand by Market

6 Independently Compounded Polypropylene Demand

7 Independently Compounded Polypropylene Demand by Market

8 Independently Compounded Polyethylene Demand

9 Independently Compounded Polyethylene Demand by Market

10 Independently Compounded Thermoplastic Elastomer Demand

11 Independently Compounded Thermoplastic Elastomer Demand by Market

12 Independently Compounded Polystyrene Demand

13 Independently Compounded Polystyrene Demand by Market

SECTION IV--MARKETS

1 Independent Thermoplastic Compounding Demand by Market

2 Construction Markets for Independent Compounders by Resin

3 Construction Markets for Independent Compounders by Application

4 Motor Vehicle Production & Sales

5 Motor Vehicle Markets for Independent Compounders by Vehicle Type

6 Motor Vehicle Markets for Independent Compounders by Resin

7 Motor Vehicle Markets for Independent Compounders by Application

8 Consumer & Institutional Markets for Independent Compounders byResin

9 Consumer & Institutional Markets for Independent Compounders byApplication

10 Electrical & Electronic Equipment Shipments

11 Electrical & Electronic Markets for Independent Compounders byResin

12 Electrical & Electronic Markets for Independent Compounders byApplication

13 Insulated Wire & Cable Shipments

14 Wire & Cable Markets for Independent Compounders by Resin

15 Other Markets for Independent Compounders

16 Appliance Shipments

17 Appliance Markets for Independent Compounders by Resin

18 Packaging Shipments

19 Packaging Markets for Independent Compounders by Resin

20 Industrial Machinery & Equipment Shipments

21 Industrial Markets for Independent Compounders by Resin

22 All Other Markets for Independent Compounders by Resin

SECTION V -- INDUSTRY STRUCTURE

1 US Sales of Selected Independent Thermoplastic Compounders by Company,2003

2 Selected Acquisitions & Divestitures

3 Selected Cooperative Agreements

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT

1 Thermoplastics Demand by Type, 2003

2 Independent Thermoplastic Compounding Market Trends, 1993-2003

SECTION III -- RESINS

1 Independent Thermoplastic Compounding Demand by Resin, 2003

2 Independently Compounded Engineered Thermoplastic Demand by Market, 2003

3 Independently Compounded Polyvinyl Chloride Demand by Market, 2003

4 Independently Compounded Polypropylene Demand by Market, 2003

5 Independently Compounded Polyethylene Demand by Market, 2003

6 Independently Compounded Thermoplastic Elastomer Demand by Market, 2003

7 Independently Compounded Polystyrene Demand by Market, 2003

SECTION IV -- MARKETS

1 Independent Thermoplastic Compounding Demand by Market, 2003

2 Construction Markets for Independent Compounders by Resin, 2003

3 Motor Vehicle Markets for Independent Compounders by Resin, 2003

4 Consumer & Institutional Markets for Independent Compounders byResin, 2003

5 Electrical & Electronic Markets for Independent Compounders byResin, 2003

SECTION V -- INDUSTRY STRUCTURE

1 US Independent Thermoplastic Compounding Market Share, 2003

2 Thermoplastic Compounding Industry Flowchart