Unless someone puts shovels in the ground soon, automakers may need to find a replacement material for polyurethane in fascias, body panels, steering wheels, door panels, instrument panels, tailgates and numerous other vehicle components as early as next year.
With a new factory needed every 12 months to keep pace with 5% annual growth and none planned for next year, Robert R. Kirk of Bayer Corp., a polyurethane supplier, says demand may outstrip supply between 2001-2003.
"Capacity expansion is needed," says Mr. Kirk, executive vice president of Bayer's Polyurethanes Div. "There is going to be a tightening of the market somewhere between '02 and '03," he adds. "I'm hedging a little bit because it may even be the end of 2001. It depends on what's happening in the market."
What's happening currently is a rising demand from several industries.
Polyurethane polymers are produced by a reaction of two liquid components: polyfunctional isocyanate and polyol. They are used in a variety of applications, including the construction, marine and furniture industries, and use has been steadily growing. The current world market for polyurethanes is about 17.2 billion lbs. (7.7 billion kg) annually. Bayer opened its 19th polyurethane facility in 1999 to meet rising demand, and a BASF plant will get under way this year. But it's not enough.
Because it takes some three years for a plant to go from conception to start up, even if construction started on another facility right away, the polyurethane market still would be facing a shortage during the early part of this decade. Mr. Kirk is worried that if there isn't an adequate supply of polyurethane, customers may opt for a competitive product. "I'm afraid really all of our businesses would suffer," says Mr. Kirk, noting automotive polyurethanes, perhaps, aren't as easily replaced as furnishings and construction polyurethanes.