Carbon Fiber and Graphene Manufacturing
Business for Sale Industry Economics
$1,683,000,000
Revenue
4.88%
Projected CAGR
2005 - 2021
Historical
2021 - 2027
Projection
2.53%
CAGR
$133,000,000
Profit
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Summary
The Carbon Fiber and Graphene Manufacturing industry produce Carbon fiber materials which are robust and strong, extremely lightweight composite material that can be molded to take on a permanent shape. Carbon fiber has many useful properties which make it a go-to in a wide range of applications.
These include corrosion resistance, low upkeep, excellent durability, high stability, and a high level of design freedom. Demand for carbon fiber on an organic basis has grown significantly over the five years to 2021 and is likely to continue growing robustly over the five years to 2026.
However, Carbon Fiber and Graphene Manufacturing industry operators experienced declines in 2020 amid the COVID-19 (coronavirus) pandemic. As consumer spending on air travel declined amid the pandemic, industry revenue followed.
During 2020, domestic trips taken by US residents are anticipated to have declined 59.5%. Industry revenue is anticipated to follow, declining 16.0% in 2020.
Due to coronavirus-related volatility, overall revenue for the Carbon Fiber and Graphene Manufacturing industry is forecast to decline at an annualized rate of 0.5% to $1.7 billion over the five years to 2021, including expected growth of 6.4% in 2021.
Performance
The Carbon Fiber and Graphene Manufacturing industry is on the rise over the five years to 2021, with several downstream industries increasingly turning to carbon fiber as an input in the production of aircraft, automobiles, wind turbines, and a variety of other products.
Carbon fiber contains a minimum of 90.0% of carbon obtained by the controlled pyrolysis of relevant fibers, according to research from the University of Tennessee at Knoxville. Carbon fiber is an ideal solution in numerous applications. These include low maintenance, lightweight design, dimensional stability, and a high level of design freedom.
In 2019, COVID-19 (coronavirus) crossed borders from its origins in Wuhan, China, into the United States and has since spread globally. In March 2020, the World Health Organization declared the coronavirus a pandemic. Consequently, governments across the world were prompted to take unprecedented measures in an effort to contain the spread of the virus.
Such measures include travel restrictions, business closures, quarantines, and shelter-in-place orders. This has significantly curtailed global economic activity leading to supply chain disruptions. Additionally, global travel patterns have also been negatively affected by this.
The research anticipates that in 2020 alone, domestic trips taken by US residents declined 59.5%, leading to declining downstream demand for industry operators.
During 2020 alone, industry revenue is anticipated to have declined 16.0%, although research anticipates a rebound of 6.4% during 2021 as coronavirus woes subdue. Over the five years to 2021, research anticipates industry revenue will decline at an annualized rate of 0.5% to $1.7 billion.
Outlook
The Carbon Fiber and Graphene Manufacturing industry is expected to rebound from COVID-19 (coronavirus)-induced lows over the five years to 2026, increasing at an annualized rate of 2.3% to $1.9 billion.
Continued product development and rising demand from key downstream markets, including commercial aerospace, defense, and other manufacturers will foster this expansion. Consequently, more companies will seek to enter this growing industry as products become more available.
Over the five years to 2026, the number of industry operators is projected to increase at an annualized rate of 2.0% to 64 companies. Likewise, as these companies expand their operations to meet demand, industry employment is anticipated to rise at an annualized rate of 2.3% to 6,976 workers.
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Industry
This industry manufactures graphene, carbon fiber, and other advanced carbon-based materials. The main product made by this industry is PAN-based carbon fiber, which is then used to make carbon fiber composites that have excellent strength-to-weight ratios and durability.
Key applications for these products include aerospace, automotive, alternative energy, and high-tech electronics. Graphene remains an experimental material with limited if any, commercial applications.
Investment
The capital intensity of the Carbon Fiber and Graphene Manufacturing business is low. The industry spends around $0.05 on capital for every dollar spent on labor, indicating that many procedures are automated.
Industry operators must have access to a wide range of highly specialized gear and lab equipment in order to make carbon fiber from polyacrylonitrile (and other precursors) and make composites from these materials.
This equipment has a limited life cycle due to the industry’s fast rate of technical change since continuous technical advances in carbon fiber and graphene manufacturing procedures soon render prior production methods outdated.
Operators, therefore, need to spend periodically on the most recent gear and related equipment in this business in order for it to stay competitive. Over the last five years, depreciation expenses have climbed as a percentage of revenue, as operators have invested in new equipment to enhance production capacity in response to fast-expanding demand.
In the meantime, average salaries and employment have expanded at a slower rate than industry income, reducing wages’ proportion of the industry. Capital intensity is expected to grow over the next five years, according to the study, as larger corporations with vertically integrated operations get a greater share of the market.
Volatility
The revenue volatility in the Carbon Fiber and Graphene Manufacturing business ranges from moderate to high, reflecting changes in demand from diverse industrial clients, the majority of whom are subject to cyclical pressures.
The worldwide aircraft manufacturing industry, for example, is predominantly driven by demand for carbon fiber composites, which is dominated by only two main clients: Boeing and Airbus. Other important markets, such as automobile and wind turbine manufacture, are likewise cyclical.
While there is less variable demand from other sectors like athletic goods and civil engineering, these sectors now provide a tiny portion of sector income and consequently have very little impact on the overall performance of the sector.
Raw material cost changes, in addition to extremely cyclical markets, contribute to the industry’s revenue instability. The key precursor for carbon fiber synthesis is polyacrylonitrile, which is produced in a highly sophisticated manner by just a few businesses throughout the world.
As a result, most operators’ purchasing costs change dramatically from year to year, depending on the availability of precursors and worldwide demand for carbon fiber. Operators typically pass these expenses on to customers in the form of higher pricing, which has an impact on net sales.
Revenue declined by as much as 16.0 percent in 2020 due to COVID-19 (coronavirus) instability throughout the five years through 2021. As the general macroeconomic situation improves and favors industry operators, revenue has increased by as much as 6.4 percent in 2021.