Strength in numbers

Mike Richardson reports from Composites UK’s annual conference presentations programme in Manchester, held on the 11th May to discover how the UK’s composites industry can better compete within the global market. Lucintel’s European business development manager, Nigel O’Dea climbed the Composites UK annual conference lectern to deliver a keynote presentation that looked at how the UK can strengthen its composites supply chain against a backdrop of increasing global market competition. “The global composites industry overall represents a very good growth story with a compound annual growth rate (CAGR) of over 5% in the next six years,” he began. “The market was estimated to be worth just under $28 billion of value in 2015 and will grow by over 5% CAGR to $37bn by 2021. The UK is ranked sixth largest market by volume in the world, but what does this mean in terms of numbers? Value-wise, it was worth £0.6bn at 0.26 metric tonnes of raw material volume in 2015. However, this figure includes unconverted materials, such as thermosets and glass/carbon fibres - and not classic intermediates, such as compounded products, prepregs and woven textiles etc. “The UK remains at the heart of a strong supply chain containing approximately 1,500 UK SMEs – the top 30 companies of which actually account for 75% of the market in terms of value. Whilst this is seen as a strength it can also be a weakness too. In terms of market sectors, aerospace, wind energy and automotive are the key drivers, with the marine industry sitting behind them.” Areas for improvement According to Lucintel, the UK faces huge global competition, not only from Asia, but from Europe and low cost manufacturing countries that pose a threat. China is looking to make more UK investments, so there’s a need for more cross-sector engagement focus, plus our SMEs need more investment to meet any future demand. The industry also needs more skilled people, leading to more investment in education. “UK industry should benefit from an increased focus on creating more robust local supply chains, being more dependent on itself and not relying solely on imports. It also needs investment in the collaborative R&D side. Those SMEs that work remotely and ‘bunker down’ risk finding themselves being overtaken unless they look to leverage on collaboration by using the UK’s intellectual property strengths. This will need further Government funding, but will help drive stronger global competitiveness in the mid- to long-term.” Moving onto an overview of the global market leading up to 2021, O’Dea pointed to aerospace as one industry where its supply chain cannot make products fast enough. Already faced with a huge order backlog, its biggest issue is the need to for faster processing technologies that make aircraft quicker. “The aerospace and automotive industries are critical in driving the entire ‘lightweight materials’ focus forward. This knocks on into other sectors within automotive and land transport in general, plus building and construction too. There will be continued demand for composite materials as urbanisation continues, i.e. in buildings, infrastructure, rail and transport links: they all help to grow the composites sector.” Lucintel data predicts that the UK composite materials market is expected to grow at a CAGR of up to 4.5% during the next five years, with orders reaching 0.34 million metric tonnes in terms of UK market value by 2021. “Although the UK is sixth largest market globally for composites materials by volume, it’s behind the US, China, Japan, Germany and India. These top six countries account for 65% of the global composites market. India has a strong and growing composites market looking at future exporting opportunities in the next 10 years, particularly within the aerospace and defence sector and then rolling this out into automotive too. “An increased usage of composites is at the heart of lightweighting requirements, but what needs stressing to the UK composites sector is that it’s not just about thermoset composites: many of the new and exciting technologies coming through concern thermoplastics, as well as metal hybrids and various other lightweight materials. So, it’s not just about carbon fibre, although it is obviously a dominant part of it.” O’Dea went onto add that there are some major manufacturers headquartered in the UK, such as GKN Aerospace, Aim Composites, Airbus UK, and Cobham. “Although these companies are aerospace-focused, UK wind energy installations, and particularly offshore, seem to be experiencing a resurgence and expect to recover. There have been some great investments by both Siemens and MHI Vestas recently, which have created new jobs. The automotive industry is definitely one of the biggest growth areas in the next 5-10 years, with a particular focus of fibre-reinforced thermoplastic parts. “UK passenger car manufacturing faces some huge challenges in adopting the use of hybrids and metals, as well as thermoplastics. There are some productivity and processing challenges for the composites industry to address, compete with and actually work symbiotically with the metals sector; there are some real gains to be won rather than simply going head to head. It comes back to the point about working cross-functionally in collaboration to find a way to get the best out of things.”
Key trends going forward Regarding cost reduction, Lucintel sees that as usual, automotive manufacturers are pushing hard for lower cost carbon fibre raw material, and predicts that in terms of automotive materials versus conventional materials, lightweight materials are likely to account for 30% of the total global automotive materials demand in 2025. “This will be a combination of thermosets, thermoplastics, hybrids, graphene-based nanotechnology and 3D printing. The biggest challenge is the high cost of carbon fibre which when solved, is likely to revolutionise the composites industry. Companies and R&D establishments must focus on how industry can reduce precursor costs, which is currently 51% of the total component cost. This means looking at alternative manufacturing technologies to reach a desired price of $5-$7/lbs as opposed to the current price of $10-$15/lbs. “In terms of the key protagonists across the UK composites industry value chain, in a landscape comprising raw materials (fibres and resins), intermediates (textiles and prepreg) and part fabricators/OEMs, our supply chain is very thermoset-dominated. Where this has been a strength for conventional composites in the past, I now see this as a potential weakness in the next 10 years if it isn’t addressed within our local supply chain.” Moving onto the challenges for the UK’s composites industry, O’Dea warns that it’s under pressure from increasing international competition. The balance of payments shows a deficit and the UK still imports more than it exports, so there is a challenge for the UK supply chain in terms of what it can do more of on a local basis. “We have a very fragmented supply chain which tends to add cost and consequently needs a lot more funding and financial incentives. This point will be discussed within the Composites Leadership Forum (CLF). There is also a lack of trained personnel to cope with increasing demand and a need for more focus on providing apprenticeships and ‘institute level’ accredited training in composites manufacturing. We need increased cross-sector cooperation and engagement to build a more effective national supply chain and identify how to accelerate the commercialisation of R&D to generate faster ROI at sustainable levels of profitability for growth.” Insights that matter Worryingly, UK-based domestic suppliers lag behind the US in all nodes of the value chain, from raw materials to part fabricators/OEMs. Lucintel research findings show the UK to be well-positioned on intermediates with its own carbon fibre, glass fibre, textiles and prepreg. Government incentives are encouraging and need building further to take the UK to the next generation. Part fabricators will need an increased focus on robotics, automation and thermoplastics adoption. “Key objectives for sustainable growth to strengthen the UK composites industry’s supply chain comprises capacity expansion, skills, low cost manufacturing, collaborative research and indigenous manufacturing. These objectives are achievable by focusing on the right critical success factors. We need investment in more raw materials and component manufacture, encourage more indigenous manufacturing, again through Government incentives. “In terms of low cost manufacturing, there is already good work going on through the National Composites Centre, the Composites Innovation Cluster (CiC) and CIMCOMP support. For skills development, there are good apprenticeships schemes under way and with collaborative research, the UK is looking towards next generation nano, hybrids, additive manufacturing, robotics and automation – all key areas for the future. There’s also a need for more private equity and further UK Government investment in R&D programmes.” Closing his presentation, O’Dea called on companies to conduct a detailed growth opportunity analysis to help them focus on the ‘right’ applications, technologies, regions and markets. “If you’re looking to grow and strengthen the supply chain for composites in a competitive global market, Lucintel can assist you regarding any potential projects and how it can support you in terms of formalising your thinking and decision making,” he concluded. “Companies will need to look at their core strengths, addressable opportunities, attractive applications and partnership opportunities – the four stages a company must undergo in order to help them make the right application, technology, region, market and partner decisions. “On behalf of Lucintel, one thing I’ve learnt from all the companies I’ve worked with is that everyone has limited resources and budgets. If you don’t put them in the right place at the right time, you can lose two to three years, or even worse be pushed completely out of the game altogether.” www.lucintel.com Captions/images: Lucintel offers an insight into how the UK can strengthen its composites supply chain against a backdrop of increasing global market competition Lucintel’s European business development manager, Nigel O’Dea