SCOTTSDALE, ARIZ. - The rotational molding industry is luring new companies attracted by the relatively low cost of equipment, high demand for products and lack of competition. ``It's still an industry that attracts entrepreneurs,'' said Dan Schulist, president of Lakeland Mold Co. of Brainerd, Minn.
Schulist commented on the ``many new people in this industry'' at the Association of Rotational Molders' spring conference, held April 2-5 in Scottsdale.
Many industry veterans such as Sherman McKinniss, president and chief executive of Rotonics Manufacturing Inc. in Gardena, Calif., said they are amazed by the number of companies that have been in business five years or less.
Industry insiders place the cost of entering the rotational molding business at less than $50,000.
``It's still a business a person can start up with little investment,'' said Bruce Muller, president of Accurate Color in Lodi, Ohio.
Muller said the low technology and perceived ease of rotational molding also attracts some to the industry.
``They see someone take a bucket of powder, dump it into a mold and a few minutes later take out a $200 part,'' he said.
Gary Reep, president of Ashland Plastics Inc. in Ashland, Ohio, agreed that getting into the rotational molding business is easy and cheap, ``but one machine won't allow anyone to be that successful.''
Muller said the problem comes when a person has to make the ``transition from a garage shop'' to a facility that incorporates new technology in response to customer demand. That's when the fallout begins.
``Financing a shop's growth to meet new demands will eventually change the complexion of the industry,'' Schulist said.
Recent consolidations such as Rotonics' purchase of Custom Rotational Molding Inc. of Arleta, Calif., reflect such changes in the industry. Conference attendees believe mergers and buyouts will become more common in the next few years.
``The industry is growing in an evolutionary way,'' said Harry Covington, president of Ferry Industries Inc. in Stow, Ohio. ``Existing molders are going to multiple plants and investing in new machines with new technology.''
Rotonics' McKinniss said it boils down to the cost of doing business today, which many small, one-machine shops cannot afford. ``That's where the little guy gets hurt,'' he said.