The European flexible PU foam market report for 2018 According to data collated by Labyrinth Research & Markets Ltd, an behalf of Europur, «and presented at this year’s General Assembly of Europur and EuroMoulders in Lisbon (11-13 June 2019), the total production of flexible polyurethane foam in the 28 EU mem- ber states, Norway, Switzerland, Albania, Belarus, Bosnia, Kazakhstan, Kosovo, Serbia, Macedonia, Ukraine, Russia and Turkey reached 1.7 milion t in 2018, of which 388,000 t Was mouidea, cown from 410,000 t inthe previous year and 1,318,400 t was slabstock, 2 decrease of 4 % trom 2018, OF the total flexible polyurethane slebstock foam produced, 1.24 milion t was polyether slabstock foam and 75,217 t was polyester slabstock foam, Overall, slabstock production in 2018 decreased by 4.0 % across the entire region. Over 65 organisations were interviewed to supplement production data provided by Europur ‘member companies, who naw represent 70 % of total EU slabsiock production. 1 Introduction The decrease in production appeared to be due to a number of factors, but the most Consistent reason reported by foamers was the switch from high quality HR and VSE. grades to lower density foams by endusers in the mattress and upholstered furniture in- dustry. The high level of price volatility of isocyanates appears to have resulted in a shift towards the commoditisation of polyu rethane foam as a comfort material. For ex- ample, a small decrease in density of only 1 ke/n?, would account for a considerable part of the 51,700 t decrease in palyether slabstock production. Several foam plants closed in 2018, removing an estimated Angele Asin stn esemaon@tntermetcam Direetor Labyrinth esearch & Makes i, Cond, UK aoe Presentation at the Exopu& Eure Nudes conte ‘ence, [2-13 June 2019, bo, Portugal Pubs by courtesy of Euepur Aigurs an ables, ules there state have bee Knee by he ator, gy 30,000 tof capacity, and there was some replacement of foam with springs, polyester fibres and other materials Production of upholstered furniture industry, mattresses and vehicles was more or less stable across the EU as a whole, but there were some strong variations by region, de spite a lack of seasonality in the market caused by 2 varity of factors including the long, warm summer, growth in ecommerce and lack of consumer confidence. Further volatility in the price of isocyanates was ev dent, with high prices persisting throughout the fisthalf of 2018, followed by a sharp fall in the second half of the year due to weaker demand and lengthering supplies. Although A. Austin foamers feared a loss in business due to the widespread replacerent of high priced polyu- rethane foams with lower cost alternatives, this could not be determined from end-use rmerket data. Meny foamers have successfuly adapted to changes in the market structure by exporting product, developing higher value products, engaging with e-commerce suppi- ers and creating new products such as acous- tic insulation forthe construction industry. 2 Raw materials supply and demand One of the major challenges facing the Euro pean flexible foam industry during 2018 was the volatility of raw material prices, mainly isocyanates due to a global imbalance of supply and demand. Throughout 2018 customers waited for Sa. (fara, BASF and Wanhua to supply product ‘rom their nevr facilities, but these hopes were not fully realised, with BASF inctaling the new reactor in June, then starting testing ‘and production in July, only to pause produc tion in August and again in November due to low water levels in tne Rhine, Sadara was teported to be shipping good volumes from ‘he second hal of ast year, mainly into Asia, but volumes were nat fully ramped up. Finally in December, Wanhua announced the start up of ts 300 kt plant in China. Borsod- Chem Wanhwa was reported to have started the new TDI crystalisaion plant for TDI 65, Tob. 12 Estimated demand for ev mater used 2018 or he prodcton of fel PU oars in 28 EU meiber ‘mand of consumers inthe region, as well as exporting across Europe. Greek and Cypriot production remained stable, with Greece stil experiencing lower priced imports from neighbouring countries. Romania & Bulgaria - here production fel by just over 5 %, but most of the decrease was felt in Bulgaria as smaller foamers felt the effect of high raw material prices and reverted to buying foams. Romania is the fourth largest exporter of upholstered furn- ture and the fifth largest producer in Europe. France, Germany and taty account for near- |v 50 % of ts furniture and mattress export. Growth has been driven almost exclusively by exports and foreign investment from ma- jor manufacturers including Polipol, Natuzzi, Parisot and Ada. However, a shortage of lo- cal skied labours is staling growth and ine ‘creasing production costs. Russia, Kazakhstan, Ukraine & Belarus ~ this region, as a whole, experienced a de- crease in production of nearly 3 %. Russian foamers have also experienced the substitur tian of foam with pocket springs in both the mattress and upholstered furniture indus tries. Foam customers have also opted for lower densities. After many years of low levels of investment, Russian foamers are starting the pracess of optimising produc tion, increasing capacity, improving quality ‘and standarcising products, but foam pro- duction decreased by 6.5 % here due to dif ficuties in raw material supplies. The weak domestic growth in furiture sales has led to ‘manufacturers looking to export markets. Kazakhstan js a leading importer of Rus- sian goods, however, foam production grew by 15%, as nawly installed capacity ramped ‘up. The furniture market in Kazakhstan re- ‘mains undersupplied in terms of number of domestic and foreign enterprises, however, there is a growing consumer base and in crease wilingness to purchase furniture, ‘typically of Itafan or German design End users in the Ukraine continued to sub- stitute foam with cheaper alternatives. The market is very price sensitive, forcing end tsers to switch to springs and polyester f bre. A memory foam pillow has become a lsury item, The furniture industry is showing signs of recovery due to relative politcal star bility, but hopes of replacing low cast prod ucts with those of higher value have not been achieved. Foam production in Belarus increased by 15 % in 2018, but remains small. However, the country has an abun- dance of forest, relatively low labour costs PUWGAZINE - VO. 16, NO. 4 AUGUST/SEPTEMRER 2010 and proximity to central European markets, ‘making tripe for development. Turkish foamers reported that foam produc- tion was down, but the market was dificult to assess because the impact of high TDI prices and poor domestic demand affected each ‘company diferent Most companies report €ed similar production volumes in 2018 to those of 2017. In 2018, the Lira curency lost 40% ofits value, inflation exceeded 20% end consumer spending nosedived, vehicle pro- duction fell sharply, with some OEMs closhg production. TD) import statistics showed a fall of 11 %, Whilst tonnage may be down, vol. lume may be lass affected due tothe constant reduction in foam density, 4 Production by foam type Data trom Europur members illustrates the production of foam by type (fig. 2). The breakdown into foam families is made sc- cording to the foam families used by the CertiPUR certfication label. Any foam that does not fit into these categories is included inthe “other” types. Other types may include super soft foams, white foams, antistatic foams and other technical foams. The chang fs show slight shift rom H® and viscoelas- tic (VE) foams to conventional polyether foams. 5 North Africa Following ¢ decision by Europur members to admit associate members from countries in the CIS, Middle East and Africa, data was collected for foam production in five North African countries. In total, 52 foamers using continuous lines were found to be producing around 140 kt of foam last year ‘These fve North African countries account for some 36 % a the total USD 9.8 bin Aiican ‘urnture market. Even though the average household income < EUR 2,000/year (except Algeria), some investors are expecting grow ing demand fo urure and bedding from the rowing mile classes. Saudi Arabian and Kal ivestors are active inthe Moroccan =]MM ‘and Egyptian markets as well as Sudan, Sen- egal, Ghana and Céte d'voire. Hawever, the conditions are challenging for foamers. In most countries the government controls raw ‘material imports, foreign exchange required tor payments heavily controled, and there is a lack of industrial and transport infrastruc- ture, reduced tourism as wel as polticl in- stability. However, some foamers produce for Internal consumption and produce high quaty furniture and bedding for export markets in the Middle East as well as Europe and the USA for which some are importing CeriPUR foam grades from Europe, 6 Summary and conclusions Due to the volatility of some raw material price and availabilty, mary endusers report that price has been the main business drive, with customers having only imited interest in innovation. Each foamer has devised a strategy to deal with this situation, resuting in signicant shifts of market shares. Wides cale substitution of PU foam is not yet fully apparent, but HR and VSE foams are being replaced with lower density foams as foam becomes commoditise. The tectnology that allows compression of spring mattresses has increased compet: tion in an already overcrowded market. Hy- brid mattresses camprising of foams and pocket springs were much in evidence and ‘umiture fairs, butt remains too soon to tell if this is just a passing trend and e means of product differentiation. The growing e-commerce business has re- sulting in a lowering of price points and tak fen some market share from high end, high quality mattresses. Website from e-com merce retailers have convinced consumers that they do nat need to spend a lat of mon ey on a mattress to guarantee a good night's sleep. Supply chains are also being short ened by e-commerce retailers who require corders to be processed and shipped within hours. This supply route has led to innove tion in the foam industry in terms of faster turnerounds, end the development of foams that are suitable for compression while re covering quickly. According to CSI, 9% of rmattvess sales are made through e-com- merce, with the major markets found in the UK, Germany and France. Looking ahead, the slabstock foam industry needs to reverse the trend to lower densities to preserve market share against atenative materials. Foamers need to adant to their customers’ needs by shortening the supply chain and wiilst moving towards more inte gration. There are some strong moves to wards finding endotlfe solutions for foam but more needs to be done before future ‘generations decide to buy less or no foam in consumer products . organized by Dio plastics BIOPLASTICS BUSINESS BREAKFAST v4 plasticker bist ew lid «-prori “aisitis Milch- ‘ine rauty Ga PLAST ES Durable Applicat Sara. tuniti Al the World's biggest trade show ‘on plastics and rubber: K'2019 in Disseldort, Germany, bioplastics will certainly play an important ole again. On four days during the show bioplastics MAGAZINE will host 2 Bioplastics Business Breakfast From 8am to 12pm the delegstes will enjoy highclass presentations and unique networking opportunity The trade fair opens at 1