If you’re in the PVCu fabrication game, it’s probably been a bit of hairy time in the last few years. The recent Insight Data market reports demonstrates that for a sixth year running, the number of PVCu fabricators has taken another dip. In fact the number of PVCu fabricators has dropped by a staggering 836 fabricators in those six years. That’s a drop of over a third of that whole section of the market. At what point do you call a decline a free fall?
Squeezed from all angles
The PVCu fabrication market has been squeezed from all sorts of angles in the past few years. The recent recession made trading difficult for everyone, and we saw quite a few companies, not just PVCu fabricators, fall by the wayside. There has been quite a few takeovers in the past few years which has diminished numbers. The rise in popularity of aluminium and timber has been eating away at market share. The price of raw polymer has gone up in recent years and months, with the latest suggestion that an artificial manipulation is going to cause PVCu prices to rise further.
So I think it’s fair to say that it’s not been an easy ride for the PVCu fabricators in recent years. But despite what looks like a rather grey cloud, there is one hefty silver lining in that cloud.
Market share and profit
There is some good news in all of this. Those PVCu fabricators that manage to stay in business have the best chance of actually growing over the coming years. The featured image above does show a dramatic decline yes, but it also says that of those left, the average frame count per fabricator has increased. This means of those left, they are picking up the market share from those faltering or going bust.
So more market share should in theory mean more profit, providing the business is run properly. The key going forward for the remaining fabricators is to try and cement their current positions. The PVCu fabricator sector remains competitive. Each fabricator will still be looking to kill off the competition and steal more market share. It’s important now for companies to be innovating to make sure that their existing customers don’t start looking elsewhere, and for those floating customers to have an excuse to start looking at them.
Right size
The chart shows that more than a third of PVCu fabricators have actually disappeared for one reason or another. On the surface that is naturally a bad thing, both for the company and the jobs they provided. But when you take a step back and take a look at the size of the industry overall and the amount of business out there, it’s probably now approaching the right size.
Pre-recession it is widely accepted that the industry was bloated, way too large for the amount of business available. A touch of greed had set in and everyone wanted to squeeze their small fortune out of the sector. The crash put paid to that, and probably at the right time too.
Could the PVCu fabricator market continue to shrink? At least in the next few years I think so. I fear for the small fabricators producing less than 100 frames per week. The bigger companies will continue to eat into that sort of market share. Add the pressures of impending cost increases and the ability of the bigger fabricators to innovate and bring out new products, these smaller fabricators might find trading becoming a lot harder. For those already established, I can see some plain, profitable sailing over the next few years – which is good news!
Thinking of starting a new fabrication business? I’d look at aluminium.
