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Non-Tech : ZOLT
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To: Todd King who wrote (49)11/18/1996 12:17:00 PM
From: flyguy   of 970
 
Todd, you're right.

Most companies in this industry have taken a bath since 1991. Carbon fiber was a boom industry until the bottom dropped out with the end of the cold war. Talk about potential markets. The DOD was going to buy over 10 million pounds of super high performance fiber @ over $50/lb per year!

The main reason other markets were opened was that massive overcapacity existed and marginal pricing took over. Now that aerospace has come back, the large carbon fiber guys are dropping non-aero customers to chase the high margin aero work. This has opened the door for Zoltek and Akzo to service the low end.

I just don't see massive amounts of money to be made in the low end. In creating new markets, Zolt and Akzo will have to price to compete with steel, aluminum and concrete not the small tow carbon fiber companies. IMHO these new markets are 7+ years away from being of any significance.

My money is on the guys best placed to take advantage of the aerospace boom on the high end (Hexcel and Toray are very strong AND have large prepreg businesses to pull carbon fiber). And on the low end, I expect the guys who are basic in acrylic fiber to be best positioned. Zoltek's problem here will be large shipping costs from Hungary (whether its shipping precursor or carbon fiber) as well as a duty on both. Look for Monsanto or Cytec to enter this market at some point and for a wildcard, rumor is that Owens Corning may make a play.

I guess my opinion is that there are many cards left to play and I don't think we are close to seeing who the winner will be.

Let's watch and see.

Flyguy.
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