US sizing & thickening agents demand to reach $5.7 billion in the year 2006.

Demand for sizing and thickening agents is forecast to advance five percent annually to $5.7 billion in the year 2006. This represents an improvement over the previous period, when demand was negatively impacted by the recessionary economic climate which dominated 2001. Volume will increase

at a lower 1.6 percent annual rate, as demand for clay thickeners used in drilling fluids declines from a very high 2001 base. These and other trends are presented in Sizing & Thickening Agents, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Thickening agents will continue to account for more than three-quarters of total demand, based both on higher volume demand and higher prices. Thickeners are used in a wide range of industries, including foods, pharmaceuticals, cosmetics and toiletries, paints and coatings, and drilling fluids. Demand for sizing agents (used in paper and textile production) will recover from a weak 2001 to post gains of 5.4 percent annually through 2006.

Foods and beverages and paper and paperboard production--the two largest markets for sizing and thickening agents in dollar terms--will both experience above average growth. Demand in the paper industry consists mainly of sizing agents, and gains will be driven by the increasing use of more expensive sizes (such as polymerics), particularly in high quality printing papers. The largest single contributor to total demand is the use of modified and unmodified (native) starches as sizing agents in the manufacture of paper and textiles. Following weak results in 2001, demand will rebound through 2006, as both the paper and textiles industries post recoveries. The food and beverage market consumes a wider variety of products, including higher value thickeners such as gums, carrageenan and alginates. Cosmetics and toiletries, and pharmaceuticals will also post above average gains in dollar terms through 2006. Growth is being aided by the introduction of new products, overall gains in cosmetics and pharmaceuticals output, and a continuing focus on natural products.

Among the products in use, hydrocolloids, synthetic polymers and other multifunctional thickeners will record more rapid growth than commodity products such as clays and starches. The latter are significantly less expensive than the former, but do not offer the same range of benefits. In markets where price competition is the keenest (primarily paper and textiles), starches will continue to hold dominant positions, but in other markets (e.g., foods and beverages) multifunctional products such as vegetable gums, marine polymers and certain synthetic polymers will increase their market penetration.

Sizing & Thickening Agents (published 05/2002, 263 pages)is available for $3,600 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484 or e-mail pr@freedoniagroup.com. Information may also be obtained through www.freedoniagroup.com.

A limited license to use or reprint information from this news release is granted to you provided attribution for same--including, if possible, the price of the report--is given to The Freedonia Group, Inc. (Cleveland, OH). We would also appreciate the courtesy of receiving a copy of the article or publication in which we appear.

SIZING & THICKENING AGENTS DEMAND
(million dollars)

                                                  % Annual Growth

Item                         1996   2001   2006    01/96   06/01

Sizes & Thickeners Demand    3574   4426   5660      4.4     5.0
  Foods & Beverages           768    993   1310      5.3     5.7
  Paper & Board               792    913   1195      2.9     5.5
  Cosmetics & Toiletries      478    605    795      4.8     5.6
  Paints & Coatings           441    505    625      2.7     4.4
  Other Markets              1095   1410   1735      5.2     4.2

[C] 2002 by The Freedonia Group, Inc.