Globalisation in Transportation is Changing Demand for Chemicals and Materials
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Transcript of Globalisation in Transportation is Changing Demand for Chemicals and Materials
Impact of Globalisation in Transportation on Chemicals & Materials
On-going Globalisation of the Supply Chain Will Create the Greatest Change for Chemical Companies
23rd May 2013
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Today's Presenters
Dr. Leo Dokos,
Research Director
Frost & Sullivan
Dr. Brian Balmer,
Industry Principal
Frost & Sullivan
• Performance Materials
• Twelve years' research experience at Frost & Sullivan
• Contributor to the company's Megatrends vision
• Chemicals & Materials in Transportation
• Thirteen years’ experience in technical, materials and market research
• Directing the strategy of two programme areas
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IntroductionMegatrends and Applications of Chemicals & Materials
Transportation is one of the most important end markets for chemicals. Globalisation is one of four major Mega Trends driving change in the market.
Functionality and performance
Health and wellness
Globalisation Low carbon economy
Construction & Utilities
Food Drugs & Cosmetics
Transportation
"Just to maintain sales, you have to have business 'enablers'. You have to be in lightweight; you have to be in low-emissions. But if you want to grow your volumes, the globalisation trends are a very interesting area to look into".
Source: Transportation marketing manager, major chemical company
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IntroductionGlobalisation is one of many important trends affecting chemicals in transportation
Hig
h V
a lu
e A
r eas
of
Int e
r est
Electric Vehicles
Lightweight Materials
Green Fuels & Lubricants
Advanced Coatings & Adhesives
Safety Materials & Noise Reduction
High Speed Rail, Marine, Aerospace
Globalisation
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Chemicals & Materials in Transportation
Within Transportation, Automotive represents the largest sector for most chemicals
Source: Frost & Sullivan analysis
Thermoplastics 25.8%
Tyre rubber & chem-icals 19.2%
OEM paint 15.5%
Refinish paint 7.7%
PU foams 5.8%
Technical textiles 5.2%
Lubricant additives 3.6%
Adhesives & sealants 3.4%
Lubricant synthetic base oils 3.4%
TPE 3.3%
Fuel additives 2.8%Engine coolant 2.5%
Thermosets for composites 1.8%
Chemicals and Materials in the Automotive Market: Segmenta-tion by Product Type, Global, 2012
0 10,000 20,0000%
30%
60%
Thermo-plastics
Synthetic rubber
PU
Lubricant ingre-dients Coatings
Chemicals and Materials Market: Automotive Applications in Context, Global, 2012
Size of Automotive Market ($ Million)
Au
tom
oti
ve a
s a
Per
cen
tag
e o
f A
ll A
pp
licat
ion
s
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A History of GlobalisationRecent events illustrating the continuing importance of Globalisation for the Transportation sector
In 2010, the UN launched the Decade of Action for Road Safety. This has led to the formation of an NCAP programme in the ASEAN region.
Tata Nano is launched to meet the anticipated need for affordable, city cars in developing economies
An accident at an Evonik plant in Germany has ramifications for the entire global supply of PA12 for critical automotive fuel-tank applications.
India's Golden Quadrilateral road infrastructure project is first announced. The road system is declared complete in January 2012.
Mazda begins manufacturing cars outside Japan for the first time
British standards for engine coolants incorporate several aspects of the ASTM standards, simplifying product testing requirements around the world.
Tata acquires Jaguar & Land Rover from Ford, and has since been credited with establishing each marque as a global brand.
2008 2009 2010 2011 201219991952
Source: Frost & Sullivan analysis
2013
Nissan unveils the Friend-ME concept car, designed specifically for the Chinese market
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Impact on the Chemical Industry
Each globalisation trend within automotive is developing at a different pace; each will also have a different level of relevance for upstream suppliers such as chemical companies
Note:
Factors are a mix of societal globalisation trends, and globalisation trends within the automotive industry itself.
The diagonal line demarcates the four factors that will be the specific focus of this Briefing.
Source: Frost & Sullivan analysis
Overall Level of Impact
Urbanisation
InfrastructureDemographics
PersonalisationDesign
Supply chainManufacturing
Aftermarket
Chemicals & Materials in Transportation: Criticality and Relevance of Globalisation Trends, Global, 2012–2020
Rate of Globalisation
Rel
evan
ce o
f C
hem
ical
s
8
2000 2010 202075
100
125
150
175
200
Chemicals and Materials in the Automotive Market: Changes in Urban Population, Global, 2000–2020
Total global population
Urban percentage
Major urban share
Population in major urban areas
Year
Ind
ex (
2000
= 1
00)
UrbanisationChanges in the world at large
Electric vehicle demand will be driven, not by low-carbon trends, but by their ability to eliminate many problems associated with urban environments, including the production of smog from exhaust gases and the noise of internal combustion engines.
Winners in Mobility & Electric Vehicles
Win
ner
s in
Meg
acit
ies
DuPont
Lanxess
Ube
SabicDow
Bayer
BASF
Evonik
Many chemical companies see urbanisation and megacities as megatrends for growth, and also see mobility as a megatrend too.
However, they do not always combine these trends to specifically consider mobility needs in megacities.
DSM
3.2% CAGR (2010-2020)
Chemical Company Activity in Meeting These Urbanisation Needs
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Globalisation in Vehicle Design and EngineeringMost global OEMs centralise major design and engineering developments at HQ...
... However, significant developments still occur in other regions in which those OEMs are active, and these too require direct partnership with chemical companies.
Hyundai's research activities in Rüsselsheim (Germany) have been extremely successful.
Nissan's Technical Centre in Cranfield (UK) is an integral part of the company's global research and development (R&D).
Toyota undertakes local styling and design in key markets. Chemical suppliers must have a similar local presence to be able to find solutions to its needs.
In 2011, Honda R&D Europe UK took on additional responsibility for parts development for new models in the European market.
Key Volkswagen (VW) developments take place in Wolfsburg, but, in the final stages of development, are transferred to other regions where the localisation of the products starts. Chemical companies partner with VW both in Wolfsburg and other locations, including Mexico and China.
Source: Frost & Sullivan analysis
The growth of rapid prototyping technology will change the dynamics between centralised global and regional design centres, creating opportunities for prototyping resin suppliers.
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Globalisation in the Supply ChainThe greatest effect on the chemical industry will come from vertical consolidation in the supply chain.
Even though suppliers face strong pressure to produce formulated products (especially coatings) near the end user, this demand rarely applies to the ingredients in the formulation.
Only higher-volume additives tend to be produced close to major end-user hubs, whereas lower-volume additives can be stored in sufficient quantities to remove the need to produce locally. Manufacturers of PU foam for seating
are consolidating....
Source: Frost & Sullivan analysis
The disruption of PA12 supply caused by the industrial accident at Evonik's cyclododecatriene (CDT) plant in Marl, Germany, in March 2012 had a major effect on the automotive industry, because the polymer is critical in applications such as fuel lines.
As OEMs move to deeper platform strategies (e.g. VW's MQB), the impact on the supply chain will be dramatic. All their orders of magnitude will increase, so they have to ensure that the supply base is robust enough to cope.
Chemicals and Materials
Formulated products
Tier I companies
OEMs
Processors
... And the value chain is contracting, with more seat manufacturers doing their own foaming in house.
Winners will include polymer companies who can best supply the same grade of material from all manufacturing plants globally e.g. Borealis using its Borstar technology
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Tyre rubber & chemicals 40.8%
Refinish paint 24.1%
Lubricant ingre-dients 19.4%
Fuel additives 8.6%
Engine coolant 7.1%
Aftermarket Chemicals: Market Segmentation (World), 2012
Globalisation in the AftermarketProduct standards, specifications and competitive structure are all affected by globalisation
New fuel standards in large developing markets tend to be based on existing European or US standards.
Refinish paint is the least globalised of the main aftermarket product groups, and is likely to remain so.
Source: Frost & Sullivan analysis
A UN Informal Working Group (IWG) is working to establish a harmonised global technical regulation for tyres.
In 2011, the British Standard (BS 6580) for engine coolants adopted the ASTM standards, letting producers use the same test data to demonstrate compliance with both standards.
Globalisation is affecting the engine oils market indirectly, through the increasing globalisation in engine design.
Lubricant formulators stress that engine-oil technology must be considered an essential component of the design process for engines.
Catalysts(on the same scale)
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Summary and ConclusionsImpact on the Chemical Industry
• Issues such as demographics are exhibiting the most rapid changes, but they have little effect on chemicals usage, except indirectly through more vehicle sales.
• Other issues such as urbanisation and vehicle aftermarket needs are changing less rapidly. However, the chemical industry is much more sensitive to changes in these areas.
• Flexibility is key to a successful strategy for chemical companies supplying the automotive market.o Globalised chemicals manufacturing is less important in automotive than in
other, more commoditised, marketso More important is a globalised product development and customer support
structure
The increasing globalisation in the automotive industry continues to affect the chemical industry as a supplier of raw materials.
Source: Frost & Sullivan analysis
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For Additional Information
Brian Balmer
Industry Principal
Performance Materials
(44) 1865 398634
Leonidas Dokos
European Research Director
Chemicals & Materials
(44) 1865 398685
Mark Hicks
Sales Manager, North America
Chemicals & Materials
210 247 2490
Chiara Carella
Head of Corporate Communications
Europe, Israel, Africa
+44 (0) 207 343 8314