Summary

The Europe wood-plastic composite (WPC) market was estimated at 455.22 kilo metric ton in 2020, and it is projected to register a CAGR of over 8% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Considering the pandemic scenario, construction activities were stopped temporarily during the lockdown. According to Eurostat, construction had decreased by 28.4% in the Euro areas (EU-19 member countries) and by 24% in the European Union (EU-27 member countries) in April 2020 compared to April 2019, leading to a decrease in demand for wood-plastic composites (WPC) in construction applications such as decking. Automotive manufacturing units were also on a temporary halt. Thus, the consumption of WPC in the manufacturing of auto-interior parts and others witnessed a declining growth rate. Owing to these factors, the demand in the studied market had been decreasing in the region.

Over the short term, the rising demand for wood-plastic composites in domestic construction, owing to their characteristics and increasing construction activities in the region, is expected to drive the market growth. However, challenges in recycling WPCs are hindering the growth of the market studied.

The increasing recycling rate of plastic wastes in Europe is expected to offer a huge opportunity for the wood-plastic composite market.

By application, the decking segment accounted for the largest share in the market studied throughout the study period, followed by auto-interior parts.

Germany accounts for the major share of the market currently, and it is expected to dominate the market during the forecast period.

Key Market Trends

Decking Application is Expected to Dominate the Market

Decking is one of the most important applications for wood-plastic composites in Europe, with the sales of solid profiles rising compared to that of the hollow ones.

In construction, a deck is a flat or profiled (anti-slip) surface that is capable of supporting weight. A deck is similar to a floor but is typically constructed outdoors, often elevated from the ground and usually connected to a building.

In 2019, the European construction industry was valued at about EUR 1,937.2 billion, and it is estimated to reach about EUR 2,132.8 billion by 2024, with a CAGR of about 2%. This is expected to increase the demand for decking materials used in the construction industry, which is expected to enhance the overall market demand.

According to Eurostat, in January 2021, construction in the European Union (EU-27) countries increased by 0.9% compared to December 2020, thus enhancing the demand in the market studied.

Wood-plastic composite decking can be used in a number of ways, such as part of garden landscaping, an extension of the living areas of houses, an alternative to stone-based features (such as patios), and in residential decks as spaces for cooking, dining, and seating.

Due to environmental and durability concerns related to softwoods and hardwoods, wood-plastic composite decking (a mixture of two materials, typically wood pulp and recycled materials, such as plastic bottles or bags) was introduced in the market. Proponents of composite decking have touted this as a much-needed development, as it helps to curb the logging of trees for new decks.

The typical production process of WPC decks in Europe involves the extrusion of a decking profile based on a polyvinyl chloride (PVC) or polyethylene (PE) matrix, followed by polypropylene (PP).

In Europe, the WPC decking market is soon going to reach a mature stage, which means that the companies involved in the market may have lower growth rates. This development is driving the players to look for new areas of application.

Owing to the above-mentioned reasons, the decking application is likely to dominate the market during the forecast period.

Germany is Expected to Dominate the Market

The German economy is the largest in Europe and the fifth-largest in the world. In 2019, the German economy grew by about 0.6%, which was its weakest growth rate in the last six years. Stronger private consumption, higher state spending, and booming construction helped support growth in 2019, as struggling manufacturers dragged on activity.

According to IMF, in 2020, the country further recorded a decline in GDP growth of about -6% due to the COVID-19 outbreak and picked up to 4.2% in 2021, subject to the post-pandemic global economic recovery. Currently, Germany dominates the market studied as it is the largest manufacturer and consumer of wood-plastic composites in Europe. Most WPC compounders in Europe are located in Germany. The demand for wood-plastic composites for construction applications may be driven by the country’s strong construction sector. In 2019, the construction industry in Germany was valued at about EUR 333 billion, and it is estimated to reach about EUR 375.6 billion by 2024, leading to an increase in demand for WPC from the construction industry.

German construction companies are benefiting from the soaring demand for real estate, increasing investments in buildings, and high state spending on infrastructure. The upswing in construction has been encouraged by the European Central Bank’s ultra-low interest rates, a growing urban population, and high immigration rates over the past few years. The sector is also helping to propel the overall economic growth.

WPC also finds its application in the automotive industry, where it is mainly used in the production of auto-interior parts, including trim parts in dashboards, door panels, parcel shelves, seat cushions, backrests, and cabin linings. According to OICA, in 2020, around 3.74 million cars and light commercial vehicles (LCV) were produced in Germany compared to 4.95 million cars and light commercial vehicles (LCV) produced in 2019, witnessing a decreasing growth rate of about 24.4%, leading to a decrease in demand for auto-interior parts and impacting the demand for wood-plastic composites in the country.

Germany is the largest market for furniture in the European region and is also a major furniture consumer in Western Europe. The high consumer purchasing power creates an opportunity for manufacturers to innovate. Some of the key players in the German furniture industry include Huls AG & Co. KG, Topstar GmbH, and Rauch GmbH & Co. KG, among others. Most of the companies are located in Bavaria, Baden-Wurttemberg, and North Rhine-Westphalia. Currently, there are over 22,000 furniture manufacturers across the country. This is likely to increase the demand in the market over the forecast period.

Therefore, the aforementioned factors are expected to significantly impact the market in the coming years.

Competitive Landscape

The Europe wood-plastic composite (WPC) industry is dominated by multiple players with small but significant market shares and focused on research and innovation. Most of the products are manufactured depending on their end-use specifications. In terms of region, the market is highly fragmented (for example, Germany) as various small players contribute to the regional demand. Some of the major players include Beologic, Tecnaro GmbH, NOVO-TECH Trading GmbH & Co. KG, JELU-WERK J. Ehrler GmbH & Co. KG, and Kosche Holzwerkstoffe GmbH & Co. KG, among others.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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