Based on interviews with molders, Mastio & Company forecasts an average annual growth rate of around 5% for injection molded plastics in appliances through 2006. Most molders feel the appliance market will outpace the gross domestic product (GDP). The anticipated growth would push the resin consumption for injection molded appliance components to nearly 1.0 billion lb by 2006 from 750 million lb consumed in 2001.
Lower interest rates, new product developments, and the benefits offered by using plastics are all factors driving this growth. On the other hand, the big unknown is the effect that fears of terrorism and economic instability will have on consumers and their buying habits.
Injection molders produce parts for nine primary categories of appliances: vacuum cleaners, water softeners, freezers and refrigerators, dishwashers, laundry washers and dryers, cooking ranges, microwave ovens, air conditioners, and heating furnaces. Refrigerator parts hold the largest share of the appliance injection molding business, accounting for 34% of its overall resin consumption. Laundry-machine parts account for 22%. Vacuum cleaners and rug shampoo machines represent 20%, and dishwasher parts represent approximately 13%. The remaining sectors together add up to 11%.
The appliance market is closely related to new home starts and traditionally rises and falls with the housing market. Every new home built needs a washer and dryer, range, microwave, and refrigerator. Lower-than-expected interest rates have helped fuel a strong housing market, thus spurring appliance purchases.
Growth in the appliance market also depends heavily on new product introductions, which keep consumers interested in new appliances. Larger-sized models are currently in vogue. The trend toward appliances that are quiet, low cost, and more energy efficient will continue to favor plastics at the expense of other materials. According to one refrigerator manufacturer, refrigerator door liners and shelves are moving from steel to plastics faster than ever. The vacuum-cleaner market is also experiencing increased resin consumption.
Tight profit margins are forcing many appliance manufacturers—such as Electrolux, General Electric, Maytag, Amana, and Whirlpool—to seek offshore manufacturing, where labor and production costs are lower, or to find other means to cut expenses. More OEMs are outsourcing their injection molding to custom molders, but they are also cutting their supplier bases and asking their remaining molders to share the cost burden.
About 84% of injection molded appliance parts are made of polypropylene, polystyrene, ABS, SAN, and polycarbonate. Lower-cost engineering grades and compounded grades of PP resin have made significant inroads in a market that was once dominated by ABS, PC, nylon, and other engineering materials. When a new product is introduced into the appliance market, processors first tend to use traditional engineering resins like ABS. Once competition develops, molders look to substitute lower-cost resins such as PP, if possible. Substitution of PC by SAN is also becoming a significant factor.
Mastio & Company, based in St. Joseph, Mo., is a well-known consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call (816) 364-6200 or visit www.mastio.com/pt/outlook.html.