One respondent to Plastics News' recent processors fax poll offered a blunt assessment of his company's prospects for 1997: ``There's too much foreign competition in the plastics industry — especially China.''
The executive, whose small firm lost a $1 million customer to a Chinese company last year, understandably is vexed. He is trying to operate an efficient business using modern technology, only to be displaced by a Third World firm using cheaper manual labor.
That is one reason why, perennially, resin pricing ranks high on the list of concerns of those who respond to our unscientific poll, conducted Dec. 10-16 by fax to 1,042 North American processors. This year, pricing was the No. 1 worry of a majority of the 369 respondents. Last year it was No. 2.
When competition squeezes profit margins, the issue of raw materials pricing looms dominant, as the poll reflects. That said, processors generally feel good about the forecast for business in 1997.
Utility deregulation should help hold down some resin costs. Unfortunately, the major stress factor associated with material price hikes this year is Wall Street pressure for corporate enrichment of shareholder value.
Greed may be easy to predict, but it is difficult to manage.