Specialty Foams. US Industry Study with Forecasts to 2007 & The First Choice In Industry Research. The Freedonia Group

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1 Specialty Foams US Industry Study with Forecasts to 2007 & 2012 STUDY #1695 August 2003 $3800 The Freedonia Group The First Choice In Industry Research 767 Beta Drive Cleveland, OH USA Tel: (US) or Fax:

2 Specialty Foams US Industry Study with Forecasts to 2007 & 2012 Study #1695 August 2003 $ Pages Polyurethane and engineered plastic will remain the dominant plastic foams, with the best growth expected for the lower volume fluoropolymers and silicones US demand to grow over 6% annually through 2007 US specialty foam demand is projected to expand more than six percent annually to $1.3 billion in 2007, comprising 510 million pounds. Stimulants include improvements in the economy and greater needs for lower cost and higher performance materials in electrical/electronic, industrial, transportation equipment and other sectors. Further increases will be constrained by maturing uses and slow advances in markets such as motor vehicles. Polyurethane and engineered plastic will remain the dominant plastic foams, with the best growth expected for the lower volume fluoropolymers and silicones. However, non-plastic foams will increase faster than plastic types with ceramics and metals achieving double digit growth. Electrical/ electronic and industrial markets will continue to account for more than onehalf of total demand due to widespread structural, filtering, sealing and insulating requirements. Ceramic, metal foams to see fastest growth Ceramic and metal foams will experience the fastest growth due to advancing catalyst substrate, metal filtration and other applications. In the metal category, nascent materials such as aluminum foam also have significant potential in areas such as energy absorption (e.g., crumple zones for automotive safety) and filters (e.g., diesel particulate). Good growth is also Specialty Foam Demand by Market, 2002 ($990 million) Electrical & Electronic 28% Industrial 24% Transportation Equipment 19% Medical & Healthcare 9% Other 20% expected for foam glass in thermal insulation applications. Industrial markets offer best opportunities Industrial markets for specialty foams will present the best opportunities and rise 7.3 percent annually to more than $340 million in Opportunities are anticipated in areas such as gaskets, seals and filters for industrial machinery, and thermal insulation for storage tanks and other vessels. Electrical and electronic markets will grow at a below average pace to over $340 million in 2007, sparked by expanding needs for higher performing structural, filtering, sealing and insulation materials. Further growth will be constrained by intramaterial competition and growing imports of electronic products from lower cost Asian and other countries. Transportation equipment markets will be driven by safety and fuel efficiency concerns in motor vehicle, aircraft, marine and other applications. Advances in medical and health care markets will be stimulated by widespread disposable medical supply applications, particularly wound dressings. Visit for complete text and table of contents

3 Table of Contents Letter From the CEO INTRODUCTION EXECUTIVE SUMMARY... 1 MARKET ENVIRONMENT... 4 General... 4 Macroeconomic Environment... 4 Consumer Income & Spending... 7 Manufacturing Outlook... 8 Electrical & Electronics Product Shipments Health Care Industry Trends Transportation Equipment Trends.. 16 Building Construction Outlook. 20 Foamed Plastics Overview Pricing Trends Market Trends Regulatory & Environmental Considerations International Activity TYPES General Plastic Foam Polyurethane Foam Types Markets Producers Engineered Plastic Foam Polyphenylene Oxide Polycarbonate Polyimide Other Producers Polyolefin Foam Types Producers Fluoropolymer Foam Silicone Foam Other Specialty Plastic Foams Dear Colleague: In challenging economic times, it is more important than ever to have credible industry information on which to base your business decisions. At Freedonia, it is our mission to provide you with an unbiased, reliable outlook for each industry that we study. We carefully examine available sources, separate the wheat from the chaff, and distill an ocean of data into a concise presentation of where an industry stands today... and where it is going. At Freedonia, it is our mission to provide you with an unbiased, reliable outlook for each industry... Each Freedonia industry study provides you with the information and analysis you need to make important decisions. How large is your target market? Which product segments are growing fastest? Which markets are growing fastest? Our analysts review the relevant secondary sources and talk directly to participants in the industry to find the answers. Although Freedonia has published numerous studies covering the plastic foam industry over the years, this is our first study devoted exclusively to specialty foams - including non-plastic foams. Our Specialty Foams study covers glass, metal, and ceramic foams, as well as high value plastic foams used in a range of demanding applications. Of particular interest are the fast growing ceramic foams and nontraditional metal foams such as aluminum foam. I invite you to add the Freedonia Group to your team by acquiring our Specialty Foams study today. Very truly yours, Jeffrey Weiss, CEO

4 Table of Contents (cont.) Non-Plastic Foam Foam Glass Ceramic Foam Metal Foam Nickel Foam Other Metal Foam Aluminum Foam Miscellaneous Metal Foams Specialty Foam Demand by Type, 2002 ($990 million) Engineered Plastic 22% Polyurethane 34% MARKETS General Electrical & Electronic Types Uses Industrial Types Uses Transportation Equipment Medical & Healthcare Construction Other Markets APPLICATIONS General Structural Insulation Cushioning Gaskets & Seals Filters Other INDUSTRY STRUCTURE General Market Share Mergers & Acquisitions Marketing & Distribution Research & Development Cooperative Agreements Competitive Strategies Company Profiles Polyolefin 10% Other Plastic Foam 20% Foamex International Incorporated 1000 Columbia Avenue Linwood, PA Sales: $1.3 billion (2002) US Sales: $982 million (2002) Employment: 5,800 (2002) Non-Plastic Foam 15% COMPANY PROFILES Key Products: polyurethane foams, including filtration, reservoiring and delivering, acoustical, cushioning, safety, thermoformable, energy-absorbing, protective packaging, gasketing insulator, and automotive headliner types The Company, which maintains manufacturing and distribution facilities throughout the US, Canada and Mexico, participates in the US specialty foams industry through the Technical Products, Automotive Products and Foam Products segments. Foamex identifies Carpenter Company, Hickory Springs Manufacturing Company, Ohio Decorative Products Incorporated, Future Foam Incorporated, and Woodbridge Foam Corporation (Canada) as among the Company s main competitors within the PUR foams industry. Through the Technical Products segment, which had sales of $124 million in 2002, Foamex produces a variety of flexible PUR foams, including filtration, reservoiring and

5 Freedonia Study # SPECIALTY FOAMS Medical & Healthcare Markets for Specialty Foam by Type & Use (million dollars) Item Medical Product Expenditures $)* $ foam/000$ expend Medical & Healthcare Markets By Type: Polyurethane Polyolefins Others 8 10 MARKETS The Markets Section analyzes trends and considers By Use: APPLICATIONS Medical Disposables 52 the threats 64 and 78 opportunities Filters in 8 each 12 major market Wound Dressings 3 Other Supplies Medical Products Filter applications for specialty foams are forecast to increase 8.3 percent yearly to nearly $120 million in 2007, % medical & healthcare accounting for nine percent of total specialty foam use Advances will be based on increased concern Specialty over air and Foam Demand water quality. Polyurethane SAMPLE is PAGE the leading foam material used in air and Text liquid sections filtration, support while ceramic each foams are used in metal table s filtration. numbers Demand & projections for specialty polyurethane foam will rise nearly six percent per annum to $52 million in 2007 as a result of its cost effectiveness and good performance in functions such as filtration, de-misting, humidification, and oil and water separation. Benefits include a long life, relatively low air resistance and pressure Specialty drop (due toengineered Plastic Foam Demand its open pore structure), good dust holding capabilities by Type and & Market design possibilities, high tensile strength and tear resistance, ease of fabrication, and washability and reusability. (million dollars) Item Reticulated polyurethane foams are ideally suited to filtering functions, having a three-dimensional skeletal structure Specialty Engineered Foam (mil lbs) with more than 97 percent of void space. Filter applications are widespread, including motor vehicles, air condi- $/lb tioners, humidifiers, blood purifiers, vacuum cleaners, electronic instruments and wastewater treatment. Specialty Reticulated Engineered Plastic Foam polyurethane foams compete with conventional By Type: filter media such as synthetic fiber mats, woven and nonwoven Polyphenylene Oxide TYPES fabrics, fiberglass, forest paper and metals. Other Polycarbonate air and liquid filtration foams include polyolefins and The Types Section provides Polyimide Other 30 35demand 40for historical years and forecasts growth to 2007 and By Market: Electrical & Electronic Transportation Equipment Other % engineered plastic Specialty Plastic Foam Demand

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