The Sub-Saharan African PU market is growing at a stable rate, driven by bedding applications and the substitution of wood and rubber in the mining, interior decoration and insulation sectors, says company Frost & Sullivan (London / UK; www.frost.com). However, growth is curtailed by limited consumer purchasing power and a reliance on imported raw materials.

The market research company estimates that the Sub-Saharan African PU market will expand from USD 545.6m in 2009 to USD 694.7m in 2016. As the region emerges from the global economic recession, demand for PU foams is improving in bedding and furniture applications as well as in refrigerators and construction, it observes.

Sub-Saharan Africa accounts for about 1.5% of the global PU market, and therefore producing the raw materials, TDI and MDI, locally is not feasible, Frost & Sullivan says. As a result, the PU sector relies on imported raw materials, whose price depends on volatile exchange rates and availability.

The global economic recession impacted demand for products containing PU, such as furniture, bedding and footwear, and at the same time raw materials prices increased sharply. This created opportunities for low-cost imports, resulting in loss of business for manufacturers in the region, Frost & Sullivan says. This is especially evident in the footwear sector where Chinese products are entering the market, it adds. "Sub-Saharan Africa imports all of its raw materials for PU, leading to local PU manufacturers purchasing these raw materials at higher prices due to fluctuating exchange rates and various import duties," explains Frost & Sullivan analyst Dilshaad Booley. "Therefore, the final product containing PU will be more expensive than if it were to be imported from China."

Nevertheless, projections for PU manufacturers are upbeat. The number of applications for PU in sub-Saharan Africa is limited, and this offers growth opportunities for PU manufacturers to expand their applications in sectors such as construction, refrigeration, transport and automotive enhancements.

South Africa is the largest market for PU in Sub-Saharan Africa, followed by Nigeria. Nigeria has a huge PU market relative to its size and manufactures a wider variety of PU-containing applications compared with other countries in the region, observes Frost & Sullivan. Kenya has a growing PU market, thanks to its good distribution network and inter-border trade, it notes.

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Key findings of Frost & Sullivan’s study, “Sub-Saharan African Market for Polyurethane”, as a PDF document