The increasing use of polyurethane across a wide range of industries, including automotive, may cause a shortage of the chemical as early as next year, says an executive at Bayer Corp., a key supplier of polyurethane raw materials, systems and equipment.

“There is going to be a tightening of the market somewhere between '02-'03,” says Robert R. Kirk, executive vice president-Bayer Polyurethanes Div. “I'm hedging a little bit because it may even be the end of 2001 — it may be very, very tight. It depends on what's happening in the market.”

What's happening currently is a rising demand for polyurethane, which consists of thermoplastic or thermoset polymers produced by a reaction of two liquid components called polyfunctional isocyanate and polyol. There are many polyurethane derivatives used in a variety of consumer goods, agricultural equipment and marine accessories. The auto industry use polyurethane in fascias, body panels, steering wheels, door and instrument panels, tailgates and numerous other vehicle components.

Annual overall usage growth has averaged 5% by weight during the last 20 years thanks to new applications. The present world market for polyurethanes is about 17.2 billion lbs. annually; North America and Europe are the dominant markets. Bayer opened its 19th polyurethane facility in 1999 to meet rising demand, and a BASF plant will get underway this year. But it's not enough. Capacity expansion is needed at the rate of about one plant a year, says Mr. Kirk.

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 Bayer can't provide an adequate supply of polyurethane, its 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. “We're really concerned about product substitution.”