Ohio awaits Tikes' decision; Ranking reflects rotomolders' 2008

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What is the future of Little Tikes Co. in Hudson, Ohio? The city and state have done their part, offering an attractive financial package to keep the company in its hometown — including tax credits and a low-interest loan.

So what has been the response from Tikes and its California-based parent, MGA Entertainment Inc.? They issued a statement that said, in essence: “That’s good — but we won’t really consider the offer until mid-September, when the Ohio Controlling Board formally releases the funds.”

The state already announced the package to retain 395 existing jobs and to help Little Tikes add 66 new ones. The controlling board routinely signs off on these deals, according to local economic development officials.

These talks — with MGA hinting that it could move Little Tikes out of Hudson — have been going on for more than three years. Company leaders need to quit playing games: Spell out your plans.

Ranking reflects rotomolders' 2008

 This week, we’re issuing our latest ranking of North American rotational molders. The past two years have certainly been a tough time for them.

In 2008, rotomolding was punished by sky-high resin price hikes — as was the entire U.S. plastics processing industry. But high natural gas prices also jacked up the cost to run the large ovens used in rotomolding.

Resin and natural gas prices returned to earth late last year, but then a crushing decline of business hit nearly all industrial sectors and carried over into the first half of 2009.

Several companies have closed plants and consolidated production, and the parent of one major rotomolder has filed for Chapter 11 bankruptcy protection. The ranking also reflects the ability of rotomolders to pass along some costs: Quite a few molders show higher sales. Others managed to keep sales flat in a very uncertain 2008.

Now, in late summer 2009, it looks like the “great recession” may be bottoming out. As consumers continue keeping a close watch on discretionary spending, several key rotomolding sectors could remain weak — like kayaks, toys, marine products and recreational vehicles. However, other markets, such as medical housings, agricultural and some industrial products, should hold up well as the economy rebounds.

Economist Peter Mooney, who studies the industry for Plastics Custom Research Services in Advance, N.C., said that when you remove packaging from the equation and focus on durable goods, rotomolding has fared better than many other processes such as injection molding, industrial blow molding and structural foam molding.

Mooney points out that rotomolding is not very exposed to automotive and construction, the two businesses hit hardest by the recession. On the other hand, demand for tanks has held up, he said.

Bregar is an Akron, Ohio-based Plastics News senior reporter.