Tony Walsh Predicts What's in Store for 2012

Date: 28 February 2012
Source: Freefoam Building Products
Forecasts are again all the rage as the world throws up news of financial weakness, collapse, threatened collapse, currency swings, Ponzi schemes, and of course that great magic illusion, the money-pots of Quantitive Easing.

Each year Tony Walsh, Freefoam Plastics Chairman, uses his considerable experience and knowledge to predict what might happen within the plastics industry for the coming year. Tony’s personal predictions for 2012 are as follows: • Growth of 5%+, driven by RMI (Repair, Maintenance & Improvements) as people dig in and enhance the dwellings that they are tied to by the unavailability of loan-finance. New-build will drag on at a low level.

  • Raw material prices will rise over the year, exceeding 10% at the peak but dropping back a bit at the years end. Soaring Ethylene prices and a greater control of the supply chain will allow PVC producers to recoup their costs plus some.
  • Product price increases will stick as people and companies absorb the lessons from the past year and decade with its crazy lose-lose cut-throat competition between matched suppliers. Competition will be fought instead on service issues.
  • Colours will continue to gain market share.
  • As opportunity for further consolidation at the manufacturing level is now very limited, I expect a quiet year on that front.

Looking back to 2011 Tony’s predictions were spot on achieving a 5 out of 5 hit rate.

  1. Raw material price increases continuing. “I nailed that one alright.”
  2. I predict probably 8% +/- will be passed on . “I understand that 5-7% stuck.”
  3. Again colour demand will grow, both self-coloured, foiled and painted. “Yes, a nice steady growth in the proportion of colour to white.”
  4. The Newbuild market will maintain its low trajectory with little change. However, growth in RMI will be apparent as people look to maintain or improve their existing dwellings rather than move. “This turned out to be true and was particularly noticeable as we went through the second half of the year.”
  5. The expected consolidation at the producer seems inevitable in 2011. I’d give it at 70% chance of happening in the year. “Well, the Epwin-Latium deal was announced in Mid-January, 2012 so I guess I claim a success for that one.”
600450 Tony Walsh Predicts What's in Store for 2012

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