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CHICAGO — Plastics companies have been slow to tap the benefits of the Internet, and many plastics firms now using the technology appear to be driven to do so by their customers. That is one finding of a major new study that assesses both the Internet's current use and its eventual impact on business across several plastics industry sectors.

Full results of the study will be revealed at NPE today in a one-hour Internet industry briefing scheduled for 10 a.m. in Room S105D of McCormick Place's South Hall.

Compared with the 80 percent of Fortune 500 firms that reported having Internet sites by the end of 1996, just 42 percent of North American plastics companies now have such sites, the study revealed.

The existence of corporate World Wide Web sites ranges from 37 percent of the plastics processors to 58 percent of the resin suppliers. The availability of a corporate e-mail address ranges from 49 percent for processors to 76 percent for end users.

Despite the slow penetration of Internet usage in the plastics industry, there does not appear to be a great deal of lingering resistance. Indeed, plans among non-Internet users to use the Internet to communicate with other companies during the next 12 months are greatest within the segments that currently have the lowest penetration of usage.

Overall, 28 percent of companies without an online presence now expect to have their own Internet sites within six months, the research showed.

The study, spearheaded by USA Chicago, a marketing and communications agency, was sponsored jointly by Morristown, N.J., nylon resin producer AlliedSignal Plastics; Washington-based trade association the Society of the Plastics Industry Inc.; and Plastics News of Akron, Ohio. DePaul University in Chicago conducted the study.

``We know the Internet's impact is far-reaching'' said USA Chicago President Patrick Yanahan. ``We conducted this study to pinpoint exactly where the plastics industry and its segments stand in terms of capturing the advantages the Internet offers.''

DePaul mailed four slightly different versions of the 10- to 12-page survey in mid-March to nearly 10,000 plastics processors, resin makers and distributors, machinery manufacturers and plastics product end users in the United States and Canada, using Plastics News' subscriber list The survey was completed and returned by 1,283 people, or 12.9 percent, by the end of April.

Other key findings include:

Nearly 30 percent of end users report using the Internet to communicate with at least one of the other three types of firms, compared with 19.1 percent of processors, 16.8 percent of resin suppliers and 15.6 percent of machinery manufacturers.

A high proportion of survey respondents are in managerial positions. For end users, a significantly higher number of technical managers responded to the survey compared with other types of firms, suggesting that the relatively high Internet use by end-user firms is driven by those in technical positions.

Most users are technical and middle-management people at large companies or senior managers at smaller companies.

Of the processor, resin supplier and machinery manufacturer respondents, 54 percent said they believe the Internet will have a significant impact on the roles of distributors and sales agents in the marketplace.

Most users employ the Internet for disseminating and gathering information, not for closing a sale.

Internet use appears to be more attractive to firms with greater resources. End users and resin suppliers with larger sales tend to use the Internet. Processors and machinery makers, however, do not differ in Internet use according to dollar sales.

Despite the fact that most users believe Internet usage enhances business efficiency — and that virtually no user believes the Internet detracts from business efficiency — neither the Internet nor e-mail is widely used within the plastics industry. The reason given most often (44 percent) for that is that the company does not provide access. The telephone, face-to-face meetings, and traditional and express mail remain the dominant forms of communication. Overall, about 12 percent of respondents said they ``do not see a use'' for the Internet.

Resin suppliers

Of the 161 respondents within the resin supplier segment, only 16.8 percent use the Internet to communicate with plastics end users, processors or machinery manufacturers.

Internet users tend to be larger firms relative to nonusers, and nearly half claim major sales to the automotive industry.

Most suppliers who communicate with end users (69 percent) and processors (53 percent) say it enhances efficiency. Even so, use of the Internet seems to be in its infancy, and primarily provides information to customer groups.

Resin supplier users communicate with end users more than processors via the Internet, but communication to both groups remains occasional.

A majority of resin suppliers who use the Internet (52 percent) believe it will alter the types of services provided by resin distributors and sales agents. Specifically, nearly 30 percent believe that it will enhance the role of such firms in the marketplace, 18.5 percent believe it will diminish their roles, and less than 4 percent expect the technology to eliminate the need for such firms.

There does not seem to be a negative bias against the Internet, but management, perhaps fearing loss of productivity, is not supporting it as much it could, according to USA Chicago.

Mirroring the other industry segments, nonusers are becoming more receptive, and 30 percent of the respondents say they are extremely likely to use the Internet to communicate with other plastic industry firms in the next 12 months. More than 55 percent say they are extremely or somewhat likely to do so.

Plastics processors

Although processors communicate via Internet with their end-user customers much more frequently than the other industry segments, the Internet remains infrequently used. Among processors, it approached only the popularity of seminars as a communications medium, well behind the telephone, face-to-face meetings, and regular mail.

Of the 610 processor respondents who do not use the Internet, nearly half (47.5 percent) said their companies do not offer Internet access, while 22.8 percent either see little use for it or believe security to be a problem.

More than 43 percent of nonusers say they either are extremely or somewhat likely to use the Internet to communicate with other industry firms in the next 12 months.

Most plastics processors using the Internet believe the new medium will increase interaction between the various plastics industry segments, and more than 52 percent believe it will change the types of services provided by their distributors and sales agents.

Machinery makers

Of the 122 respondents in the machinery manufacturing segment, only 19 (15.6 percent) report being users. Even so, it would be wrong to characterize this segment as a stronghold of Internet resistance.

Two-thirds of the users feel the Internet improved business efficiency, and more than 51 percent of nonusers say they are extremely or somewhat likely to communicate with other firms in the next 12 months.

More than two-thirds believe the Internet will change the types of services provided by machinery distributors and sales agents — with 47.4 percent seeing it enhancing the role of such firms and 26.3 percent expecting it to diminish their role.

Every one of the users believes Internet use will improve communications between machinery manufacturers and their processor customers, and three-fourths of nonusers agree.

Without question, this is the slowest segment to adopt the Internet within an industry that is lagging. But it's also clear that attitudes are changing, and that even this segment is recognizing the Internet's potential benefits.

End users

While end users are most active among the segments studied in using the Internet to communicate with the plastics industry, less than 30 percent report using the Internet to do so.

Most Internet users in this category use it to communicate with resin suppliers (66.7 percent) and plastics processors (63.9 percent), while just 22.2 percent use it to communicate with mold and die makers.

Among nonusers, nearly 34 percent say it is extremely or somewhat likely they will use the Internet to communicate within the industry in the next 12 months.


The Internet still is not close to being institutionalized as a favored communications medium within the industry. Among users in all segments, the majority use the Internet ``occasionally'' for communicating with other industry players.

One factor that possibly may have a cooling effect is the mounting concern about the Internet's speed and reliability. Many companies are finding it necessary to change Internet providers repeatedly as they prove unreliable. And when Internet providers suffer outages, users often remain uninformed — unless they call the company.

Nevertheless, Internet usage among plastics companies is expected to increase substantially in all segments during the next 12 months.

According to USA Chicago, this suggests that usage is in the growth stage, interest is increasing dramatically, and resistance is dropping as others in the industry experience the advantages of the Internet.

This story also will be available online, at Plastics News On the Web (