Wood Plastic Composite Market

Market Overview

The global wood plastic composite market size was valued at USD 9.41 billion in 2022. It is estimated to reach USD 20.10 billion by 2031, growing at a CAGR of 8.8% during the forecast period (2023–2031). The global wood plastic composite market is anticipated to be driven by growing construction industries, specifically in emerging economies such as Asia-Pacific. Moreover, the surging demand in the automotive industry for lightweight and customized automotive parts in the car interior is expected to boost the market expansion.

Wood-plastic composites (WPC) are hybrid materials that combine natural wood products, like bamboo, pulp, bark, etc., with thermoplastics or polymers. Due to their biodegradability and environmental friendliness, they have surpassed numerous conventional products, such as particleboard and fiberboard. WPC is widely used as a substitute material for producing furniture, railings, cladding, decking lumber, and molding, among other products.

These composites are incredibly adaptable, strong, and rot-resistant because they combine the best qualities of plastic and wood, enabling manufacturers to construct complicated shapes. WPC also improves stability and stiffness due to the composite material's reinforcing properties. These materials are utilized extensively in the construction, industrial, consumer goods, and automotive industries.

Market Dynamics

Global Wood Plastic Composite Market Drivers

Growing Building and Construction Industry in Developing Economies

Wood plastic composites are increasingly being used in construction applications. In developing countries, wood plastic composites are replacing standard wood in roofing applications because of its high strength. This is because it tends to break into larger pieces compared to standard wood, which prevents sharp shards upon breakage, which can lead to serious human injuries in case of an accident. Asia-Pacific is expected to witness an increase in construction expenditure over the forecast period on account of rapid urbanization along with increasing population.

Additionally, the Asia-Pacific capital project and infrastructure market is projected to develop by 7% to 8% per year over the next decade, approaching USD 5,300 billion by 2025 and representing nearly 60% of the world market. Demand for wood plastic composites in Asia-Pacific is expected to grow quickly due to government funding for large-scale infrastructure projects in India, China, Myanmar, the Philippines, Malaysia, and Indonesia. The steady initiation of new construction and building projects in Asia will likely boost market growth.

Rising Demand for Lightweight and Customized Automotive Components

Increasing wood plastic composites demand in the automotive industry propels market growth over the forecast period. The escalating costs of fuel have prompted a need for fuel-efficient automobiles. WPC products are most widely used as a plastic replacement because of their sustainable properties. Many consumers prefer WPC products as interior automotive components, including showpieces, glove compartments, and sandwich boards.

Furthermore, the presence of various aesthetically appealing products and components coupled with wide availability of car interior materials by various aftermarket industries is expected to grow prospects to the wood plastic composite market. Rising consumer interest in customizing the car interior is further expected to fuel the market growth on a positive note. Similarly, increasing production of cranes, including electric overhead traveling (EOT) cranes, ladle cranes, mobile cranes, floating cranes, hydraulic decks, crab cranes, and controller cranes, is expected to drive market growth.

Global Wood Plastic Composite Market Restraint

Shortcomings of Wood Plastic Composites

Wood plastic composites have lower strength, stiffness, and thermal resistance than conventional wood. They exhibit temperature and time-dependent behavior; for instance, the stiffness and strength of wood plastic composite decreases on account of moisture absorption. The wood plastic composites have deficiencies of both wood and plastic elements. This makes the wood plastic composites susceptible to fungal attack and vulnerable to UV degradation.

Additionally, the polymer component in wood plastic composites makes it difficult to recycle and reuse. Wood's natural texture and feel are missing in the wood plastic composites, especially when used to manufacture furniture and doors. These shortcomings of wood plastic composites, coupled with the difficulty in their recyclability, are expected to restrain market growth over the forecast period.

Global Wood Plastic Composite Market Opportunities

New Product Launches and Technological Developments

Key companies' efforts to develop new products and the surge in R&D that has led to technological breakthroughs have helped drive the market's revenue growth. For instance, in February of 2021, Teknor Apex Co., a plastic compounding company, introduced a new highly weatherable complex for external wood plastic composite decking coatings. Wood-plastic complex flooring is a mixture of wood dust and polyolefin plastics that is gaining popularity in place of traditional treated wood. An innovative compound gives wood plastic composite a significant advantage over wood by providing a longer lifespan, fewer maintenance requirements, and a superior appearance.

In May 2021, KTH Royal IOT researchers created a 100% renewable translucent wood composite by modifying the lignin in wood with limonene acrylate. This limonene acrylate is produced from the recycled citrus fruit covering waste from the orange extract industry. Due to its remarkable physiochemical properties, the technologically advanced wood-plastic composite is planned for structural applications. Such developments are creating opportunities for market growth.

Regional Analysis

Based on region, the global wood plastic composite market is bifurcated into North America, Europe, Asia Pacific, Central and South America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global wood plastic composite market shareholder and is estimated to exhibit a CAGR of 7.91% during the forecast period. North America's automotive and construction sectors are exhibiting encouraging growth. Wood plastic composites are mainly used in consumer goods and automotive applications for packaging and manufacturing owing to their lightweight and environment-friendly properties. Reductions in unemployment rates, the passage of major infrastructure-related legislation, and the flooding of the market with shale gas have all contributed to the expansion of the construction industry in the region.

In addition, government reports have identified that major towns have regained their economic activity concerning the housing industry. The electronics industry also has a major presence in North America and is fueled by the huge domestic market. The rising demand for lightweight and insulated printed circuits, semiconductor products, and other electronic devices in the region is expected to boost the market over the forecast period.

Asia-Pacific is predicted to exhibit a CAGR of 10.1% over the forecast period. The building and construction application dominates the region's demand for wood plastic composite. The increasing population in countries including India, China, Bangladesh, and Pakistan, coupled with changing consumer lifestyles, has resulted in the growth of construction and consumer goods industries in the region, which in turn is expected to influence market growth over the forecast period positively. In addition, Tesla, Inc. CEO Elon Musk revealed in February that the business would establish an electric vehicle production operation in southern India after forming Tesla Motors India and Energy Private Limited in January 2021. Therefore, valiant efforts by the local government, combined with the increasing interest of foreign companies to invest and open up automotive, consumer goods, and cell phone manufacturing plants in the region, are expected to increase the demand for wood plastic composites in automotive over the forecast period.

In Europe, the wood plastic composite is expected to grow steadily due to the stagnant demand from the end-user segment. However, the growth of the automotive industry in the region, which uses wood-plastic composites to manufacture interior and exterior trims, is anticipated to drive demand over the forecast period. The region has reached the stage of maturity in the wood plastic composite market, thereby expected to grow sluggishly over the forecast period. The European market has profited from the creation of the European Industrial Map and the European Union's attempts to keep its position as a major producer of electronics and electrical devices, and this trend is likely to continue in the coming years. The expansion of industries such as mobile devices and wireless applications is anticipated to fuel industry expansion further.

In Central and South America, rapid end-user industry growth, including automotive, consumer goods, and construction in emerging economies, including Brazil, Argentina, and Chile, is expected to propel the demand for wood plastics composites. The government of Brazil established a plan for the development of the region, especially the city of Sao Paulo, in 2020. The city is anticipated to witness people-oriented development such as bike lanes, bus lanes, and new housing. The country has experienced a shortage of housing units by over 500,000. The development plan proposed by the government is anticipated to change the country's demographics over the next two decades. The plan is expected to assist in the construction of 717,000 new residential and commercial units by 2045. Therefore, initiatives of this nature are anticipated to drive the market demand for wood plastic composites over the projected period.

Segmental Analysis

The global wood plastic composite market is bifurcated into products and end-users.

Based on product, the global wood plastic composite market is segmented into polyethylene (PE), polypropylene (PP), polyvinylchloride (PVC), and others. 

The polyethylene (PE) segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 8.61% over the forecast period. Polyethylene-based wood plastic composites are widely used in the automotive, construction, and interior decoration industries. Polyethylene-based wood plastic composites have high impact strength, flexibility, and low friction. These products also have a high-temperature resistance as compared to conventional wood products. The properties above of polyethylene make it preferable for applications in building and construction and manufacturing consumer goods. In addition, the polyethylene-based wood plastic composite products' low cost, high rigidity, abundant raw material availability, and biodegradability will likely generate new opportunities for market expansion. The polyethylene segment is among the fastest growing wood plastic composites due to its burgeoning use in manufacturing end-use products that include furniture for homes, offices, restaurants, resorts, and hospitals, and wood-based material.

The polypropylene wood plastic composite segment is anticipated to progress steadily over the forecast period. This is due to its heavy use in niche applications, including water-resistant coatings on furniture and high-temperature controllable wooden units. The product has an extensive application scope in manufacturing consumer products, including musical instruments and household electronics. The wood granules are mixed with polypropylene plastic resins to produce wood plastic panels that are moisture and high-temperature resistant. In addition, polypropylene is utilized for manufacturing wood plastic composites because of its various benefits, including full recyclability, non-toxicity, and environmental friendliness. These special qualities make polypropylene wood plastic composites widely used in high-end furniture manufacturing niche applications, including automotive modules and cladding.

Based on end-users, the global wood plastic composite market is bifurcated into automotive composites, building and construction, industrial and consumer goods, and others. 

The building and construction segment dominates the global market and is expected to exhibit a CAGR of 9.02% over the forecast period. The building and construction segment dominated the wood plastic composite market in 2022, owing to rising infrastructural activities across the globe. Wood plastic composites are used in the building and construction sector for siding, molding, and decking, among other applications. As a result, demand for wood plastic composites is expected to increase throughout the forecast period. The rising demand for various wood-plastic-based wood products in construction applications, particularly decking, is anticipated to drive market expansion.

In addition, increasing demand for biodegradable and biocompatible products in building and construction applications is expected to create new expansion opportunities for the market over the forecast period. The rise in population in developing countries, including China, India, Bangladesh, Pakistan, and Hong Kong, coupled with the increasing number of migrants in developed countries in search of better lifestyles and employment, is resulting in the addition of individuals in the community, which in turn is resulting demand for homes and commercial offices and workplace construction in turn adding growth prospects to the building and construction application segment.

Wood plastic composites are likely to grow significantly in automotive applications due to their favorable properties like lightweight, machinability, durability, and environmental friendliness. The increasing focus of automotive manufacturers toward making either biodegradable or recyclable parts is expected to open new avenues for wood-plastic composites over the forecast period. Growing utilization of wood plastic composite as a green material and rising government initiatives toward promoting sustainable and biodegradable products will benefit the market growth over the forecast period. The product is used as trim parts in door panels, cabin linings, seat cushions, backrests, and dashboards. Adopting new technologies, increasing use of bio-based products, and high investments in automotive R&D are expected to open new avenues for the wood plastic composites market.

Recent Developments

• May 2023- The Chicago Athenaeum Museum of Architecture and Design awarded Fiberon's Wildwood composite cladding with recycled content a Green Good Design award.

• February 2023- Trex®, the world's leading manufacturer of high-performance, low-maintenance composite railing and decking, is revolutionizing outdoor living with the launch of Trex Signature® decking, its latest innovation. Trex Signature elevates the category of premium composite decking by achieving the most realistic wood aesthetics to date.