I’m going to start with my “traditional” predictions for the coming year (twice makes it a tradition, right??!).   For 2011 I’ll again go with 5 themes

1. Raw material price increases continuing. With the effect of the cumulative increases in additives  I see end of year prices in input costs increases for producers in the 20% range. With oil over $90 and pushing up I see this a safe bet.

2. How much of this will be passed on? Common sense says all of it plus a backlog, but sense has not prevailed in the past. Make your own guesstimate. I see a minimum 10% price rise in the first quarter. How much of this will stick – probably 8% +/- if already incurred costs are to recovered. Its uphill from there. I believe a 20% increase has already been flagged by Kommerling.

3. Again colour demand will grow, both self-coloured, foiled and painted. Suppliers will push it to differentiate their offering and consumers will react to greater choice and increased visibility of the fitted product.

4. The Newbuild market will maintain its low trajectory with little change. However, growth in RMI will be apparent as people look to maintain or improve their existing dwellings rather than move or invest abroad. Conservatism (small C)  in every sense will prevail.

5. The expected consolidation at the producer (extruder) level – all the gossip of 2010 – logically seems inevitable in 2011. However, logic is in short supply and may only come about subsequent to a major failure with burnt suppliers and customers.  I’d give it at 70% chance of happening in the year.

Results for 2010

I would guess 4+ out of 5 isn’t bad even though the negative predictions won out.

Resin prices rose and rose all year long. I predicted falls as well as rises but what we got were more like pauses in the ongoing flow of news. The beginning to end price increase was more like 15% than 10% and the price of compound for producers was further impacted by constant and serious increases in additives such as TiO2, stabilisers, modifiers etc. That was bad enough but shortages in almost every element meant many producers were on allocated supplies and therefore with limited bargaining power.

Prediction 2 was absolutely correct, price increases imposed and then cannibalised by market grabbing exercises. Those same companies then are left without sufficient revenue to re-invest, refurbish tooling or equipment or give proper service. In the meantime their quality products deserving premium prices are sold at prices which imply the label “trash” and pull down the whole market. The added value in the supply chain from quality producer to quality  fitter is thereby proportionately reduced. The consumer is the winner but doesn’t know it.

Prediction 3 – rising demand for colour – was right on the money.

No 4 – market contraction of 5 % – was close enough but for the wrong reasons. The weather played hell at both ends of the year and if it were not for that we might have seen a rise of perhaps 10% year on year as confidence seemed to grow as the year progressed.

No 5 -small increase in independent stockist numbers and a reduction in group-owned outlets – Got the first part right. The second part was mixed with some expansion,  some contraction. The most significant move, certainly as far as their customers were concerned, was the purchase by Epwin group (Swish, Profile 22 etc.)  of  significant outlets and seeming to move further towards the Eurocell model.

Happy New Year everyone!

- Tony

Of course this is only June, so we’ll have to wait for the fat lady ( sorry, the fat man in the red suit and white beard) to sing.

1. Resin Price increases. Yes, well on track and my prediction on Resin price increases may well be exceeded by year end.
2. Extrusion companies will increase prices by a headline 8% – 10% and fail to hold most of it due to desperation price cutting by a one or two companies teetering on the edge.  Well folks we’re there, except it looks like 6% to 14% and we’ll watch to see who’s real and who’s bluffing.
3. Colour demand will grow dramatically. Yes, definitely, in solid colours, foils and paint.
4. Market volume will contract by 5%. Looks more like flat or a small increase, but within that there are significant winners and losers.
5. A small growth in the number of  independent stockists as the larger group companies tighten up, close some depots and let ambitious staff go. Its happening. And of course this is essential to provide growth and new energy in any sphere.

Being honest about it, no, not in that way. The last 20 years has been a series of cycles through the same issues of growth, pause, rebuff competitor attacks, develop your own growth (and attack) strategies, re-invest, peaks and valleys of PVC resin prices and start again. As for the weather, you only ever  noticed it when it interfered with sales and as regards the bright future, yes, I think self-belief and belief in the key team players made that a given.

It doesn’t seem that long ago that I was standing in a factory floor empty except for a shiny new Battenfeld extruder. It was sitting there together with a few Tonne bags of trial material and with  workmen starting to instal basic equipment. It has been a long but never tedious journey to our current set up where we have 21 extruders and several injection moulding machines on 2 strategically located sites. Long on the calendar but so so rapid in the passing. In the meantime we have seen our competitors dwindle in number from 13 or 14 to just 3 significant players left in our particular ‘route to market’.

Most competitors fell away or were taken over or needed to be financially re-engineered arising from failed gambles that low prices would drive volumes to economic levels. It would seem that they did not have a true handle on their real costs and paid the price. This has been replicated up and down the chain from resin producers through compounders down to stockists and installers.

There has been very little innovation in new product types or applications but considerable variety introduced to profile shapes. The rare exception has been that over the last few years we have seen a continuing growth in demand for colour whether as a skin colour or a foil.

I would guess that the failure by the market in general to generate greater innovation and speculative products relates to the very poor return on investment through the years allied to the high maintenance and capital cost of equipment.

That was then, this is now. Here we are right in the middle of an economic storm.  My view is:  “so what’s new”.  Same problems, same issues, but we go forward, glass half full, looking for the opportunities created by fortune or left by our competitors. The more things change, the more they stay the same!

The trail was a temporary installation, beginning in the centre of Cork City with the Sun located at St Patrick’s Bridge and ends with Neptune at Blackrock Castle Observatory.   The inner planets of the Solar System, Mercury, Venus and Earth, fit along Merchant’s Quay with Mars situated at the Bus Station, Jupiter located at Victoria Road, Saturn at Centre Park Road (Freefoam) and Uranus at The Marina.

The Solar System Trail through Cork City

For the duration of the trail, a framed banner of Saturn, created by local Cork artist Marianne Keating, hung at the entrance to the Freefoam facility on Centre Park Road.

It was a wonderful idea, and a great way to explore Cork and learn about our Solar System at the same time.   Hopefully we will see the trail return to Cork (and Freefoam) as part of a permanent installation in the not-too-distant future.

(The BCO do run a lot of other activities.  Check them out at http://www.bco.ie/ )

“Australia green building rules revised in favour of PVC”

To quote “The body encouraging development of more environmentally friendly buildings in Australia has revised its previously negative view on PVC materials.”

While the article makes clear that the official statement around the decision credited recent advances in the manufacturing of PVC as justifying this reversal of positions, I can’t help thinking that this was merely a pretext to reverse a perverse decision. However, we don’t look gift horses in the mouth.

As has been roundly demonstrated the whole-of-life environmental burden of PVC as a sustainable material beats most other materials hands down..

Image generated using jmol (http://jmol.sourceforge.net)

PVC was Useless!

PVC is one of the oldest polymers in existence. However, in its pure form it is useless, absolutely useless, incapable of being turned into any useful item.  But over the years by the judicious addition of various substances to enable it to survive the various extrusion and moulding processes it has become the most versatile and widely used of all polymers. And yet its production only consumes half of the volume of petrochemicals that other polymeric materials such as polyethylene or polypropylene do. And at the end of its useful life it is fully recyclable.

“Various Substances” eh?  Go on..

To turn it into any of those everyday products it must be mixed with one type of lubricant to assist its mixing, a different lubricant to allow it slide over the metal in extruders and tooling, fillers to enhance its physical properties, impact modifiers and/or plasticisers to change its rigidity, a few other titbits and finally stabilisers.

Stabilisers huh, what are they good for?

Stabilisers are of two types, internal and external. The internal stabilisers are designed to protect the PVC from the thermal stresses of extrusion or moulding. Get it wrong and the material degrades and carbonises, producing hydrochloric gases. Get it right and any degradation ions get absorbed and/or recycled back into the matrix. External stabilisers do the same job in protecting against the damage caused by high energy UV radiation. They mop up the disrupted ions and in the best cases replace the ion thus keeping the product intact.

So it’s all good then?

The range of stabilisers approved for use has shrunk as focus has turned to their impact on human health.   Available stabiliser types proven to be safe in use have largely shrunk to two family types, Tin based and Calcium Zinc based. There are two tin variations approved as being REACH friendly: Octyltin and Methyltin, each one being excellent for use as both Internal and external in various formulations.   CalciumZinc, now more generally referred to as Calcium Organic, is based on a mix of up to 20 chemical components (varied according to the producer).  There is agreement that Calcium Organic is perfectly satisfactory for white products.   However, its performance for darker colours and for cellular PVC which retains it higher core heat for longer, is not so certain and is a matter of debate.

What is clear is that any claims for the moral or ‘green’ credentials of Calcium Organic rest mainly on its well chosen name and not on any superior ‘greenness’ of any or all of the chemical components, which as already said, vary from supplier to supplier.

Zolo? Who is this "Zolo" character?

Every blogger worth their salt does an annual “5 Predictions for the coming year” blog post.  A post that is then inevitably revisited at the end of the year where said blogger explains why their wildly inaccurate forecasts seemed like a good idea at the time.

Also, seeing as how it’s the middle of February, this is a little late.   But no matter, let us proceed…

My Top-5 Predictions for the Roofline Market in 2010:

1. PVC Resin prices will rise and fall and rise dramatically during the year. Prices are close to historic levels now and are over £100 a tonne over average historic prices.  I predict £50 increase at years end with more than £150 peak rise during the year.
2. Extrusion companies will increase prices by a headline 8% – 10% and fail to hold most of it due to desperation price cutting by a one or two companies teetering on the edge.
3. Colour demand will grow dramatically.
4. Market volume will contract by 5%
5. A small growth in the number of  independent stockists as the larger group companies tighten up, close some depots and let ambitious staff go.

So there you have it.  Palmistry or crystal ball gazing, would probably produce just as accurate a result.  We shall see.

I’d be interested to hear what anyone else thinks!

Now these machines do all the work

The Freefoam Blog has landed at last.  It only took a decade, but I was too busy doing other stuff.  Like working.   Now these machines do all the work, and the utopian future no one ever predicated has arrived.  Stay tuned.