Industry Overview
The global abrasives manufacturing industry is forecast to grow by 4.5% per year through 2020-2025 to reach a value of about $56 billion, according to MarketsandMarkets. The Asia Pacific region accounts for the largest share in the global abrasives market. The combined annual revenue of the US abrasives manufacturing industry is about $5 billion.
Business Trends
Company Specialization
Few companies can produce the full range of abrasive products. Most specialize in one or several sectors, producing only industrial or consumer products, or producing mainly for the auto or machine shop industries. While the general manufacturing technology of the industry is well-known, the technical expertise to advise customers on the best ways to apply abrasive products for a particular purpose is very specific.
Customer Consolidation
Consolidation among customers in the auto parts and aircraft parts industries is opening opportunities for large abrasive manufacturers to develop nationwide sales relationships with big customers. Although there are few economies of scale in manufacturing operations, there are large distribution efficiencies for companies that can provide a wide range of abrasive products to large customers.
New Designs Lead to Productivity
Auto, aerospace, and electronics manufacturers are demanding more high-performance applications. Improvements in the design of diamond wheels used to finish ceramics can be key to cost-effective manufacturing. Metal-bond design wheels created for longer wear can lead to shorter cycle times and longer life, thereby impacting customer machining costs.
More Use of Superabrasives
Synthetic diamond and cubic boron nitride products, called superabrasives, are being used more extensively in industrial applications even though their cost is higher than traditional products. The longer product life and reduced machine downtime (switching and “dressing” a grinding wheel) associated with superabrasives in many cases more than make up for the higher initial cost.
Increases in Precision Tooling
The evolution of the US economy toward more specialized manufacturing requires smaller, more accurately shaped parts. Precision grinding is the only way to produce the tight tolerances that make smaller, more intricate parts fit properly. Abrasive manufacturers can capitalize on this shift in manufacturing technology by looking for customers in the electronics and precision instrument industries.
Application to New Manufacturing Materials
Stronger steel, concrete, and new ceramics require better abrasives to cut and shape them. The superabrasive segment of the industry has been growing, partly because conventional abrasives don’t work very well with harder materials. Ceramics are increasingly viewed as low-weight alternatives to steel and are used for such applications as automotive and aerospace parts.
More Uses in Plastics Manufacture
Metals and wood have been the focus of abrasive manufacturers, but demand for these materials continue to drop. In conjunction, the use of abrasive materials in plastics is increasing. Developing abrasive products for plastics applications provides a growth opportunity for some abrasive product manufacturers.
Source: D&B Hoovers