Industry Featured Articles
Wednesday, January 10 2018
By James R. Kinnett II, CEcD, The Kinnett Consulting Group
In the words of Mr. McGuire from the movie the Graduate (some of you may remember it, 1967) “There’s a great future in Plastics. Think about it.” Plastics continue to thrive and grow in spite of the press it periodically receives. With the coming changes that the Plastics industry is beginning to experience, growth and expansion are the future of the business. Due to the emergence of new stock sources, the industry is finding new opportunities in creating new and broadening products that it will produce.
Emerging trends are crossing a number of activities and are quickly changing the playing field when it comes to an ever-expanding industry. Some of the more salient trends that are and will be affecting not only the Plastics industry but industry as a whole are:
But first let’s take a look at the industry as a whole. According to a recent survey of corporate plastics executives by the Manufacturers Association of Plastics Processors (MAPP), 90 percent of executives anticipate a steady or increased business activity in 2017-18; 34 percent of these executives reported an increase in fourth- quarter profits up nearly 10 percent from the previous year.
Wednesday, January 11 2017
By Woody Hydrick, Managing Principal and partner in Global Location Strategies
The growth in plastics resins production in the U.S. is continuing full steam. The American Chemical Council (ACC) reported in 2015 that $137 billion in capital investments in new plastic resins production operations had been announced in 225 projects with the investments predicted to come on line through 2023. The ACC also reported that these projects are expected to directly generate 127,500 jobs.
In the United States, plastic resins are primarily produced using natural gas liquids (ethane, propane, etc.) as their feedstock. In Asia and other parts of the world, plastic resins are normally produced using the crude oil derivative naptha as their raw material. Pricing for plastics resins is global, meaning the price paid for them is roughly the same wherever the buyer is in the world. Therefore, costs savings on raw materials, as well as the cost of the energy required to run the production operations, can be of great benefit to the manufacturers. The low cost of natural gas liquids (compared to crude oil) due to the large shale gas reserves in the U.S. give domestic producers a competitive advantage versus their foreign competition. Add in the low domestic cost of natural gas and electricity to power these production operations, and the result is clear: the United States is an advantaged position to produce plastic resins.
Thursday, January 14 2016
By James R. Kinnett II, CEcD, EDFP, The Kinnett Consulting Group and Partner in CKK-Group, LLC
These factors, along with monetary issues from around the world, are making the playing field for plastics a somewhat difficult industry to maneuver. An example is the trouble being experienced in Mexico. Since the beginning of 2015 the Mexican peso has dropped 25 percent against the U.S. Dollar and this has created a serious concern in the Mexican plastics industry. The industry currently imports approximately 60 percent of the polymers being processed there, and the currency fluctuation is having a large impact on the costs of these raw materials. Another international factor that is looming in the future is the African marketplace. While relatively small at this time, the fact that world exports of plastics and rubber machinery to Africa have gone up from about $719.4 million in 2009 to $971.2 million in 2014. This has been a continuous trend, actually since 2004, and there have been very few, if any, fluctuations in this trend in the last ten-year period. Africa could become the next largest producer of plastic products in the world.
Wednesday, January 14 2015
By K. John Gutshaw & David S. Laszlo, Wadley Donovan Gutshaw Consulting
Plastics production is essentially a two-phased process that begins with the raw material preparation and manufacturing of polymer resins. This product, typically in the form of pellets or beads, is then shipped to fabrication sites where the material is formed into final plastic products. Several processing methods are utilized depending on the type of product, i.e. extrusion (film), injection molding (containers), blow molding (bottles) or rotational molding (hollow plastic items).
The industry’s significant global economic influence is undeniable – with annual plastics production reaching 288 million metric tons. The same holds true in the U.S., where we see an extraordinary impact on the economy. Consider: Plastics is the third largest industry within the manufacturing sector, employing 892,000 people (or 6.7 of every 1,000 non-farm jobs); reported annual shipments of $373 billion and capital investment expenditures of $9.6 billion; and, 15,949 manufacturing facilities spread across all 50 states.