Like pioneers on the Oregon Trail, plastics processors are drawn to the Northwest. Some see the area as a virtually untapped source of new business. Others choose Oregon or Washington to serve a major customer.
Business is good for the Northwest molding community, though few are operating at capacity. Buyouts by large molding corporations of smaller, family-owned businesses in recent years created a shift in molding work as the new players began sorting out customers, keeping only the best. Many wait for the new business they have heard about in the Northwest to catch up with them.
``There's just not enough business up here to go around for everyone,'' said Brent Stumbaugh, president and chief executive for TriQuest Precision Plastics in Vancouver, Wash. ``Hewlett-Packard can only provide so much work.''
True. Some molders said plastics processing industry growth in the Northwest can be tracked by looking at Hewlett-Packard Co.'s growth. The lure of Hewlett-Packard, with plants in Vancouver and Camas, Wash., and Corvallis, Ore., still exists. But it is one of several large original equipment manufacturers that provide molding opportunities for custom processors.
Epson Portland Inc., a maker of computer printers, is another strong and growing OEM that provides work to custom molders, despite the expansion of its in-house molding capabilities. Strong market conditions and increased sales mean a crunch for machine time in the Northwest, said Steve Klein, executive vice president for the Hillsboro, Ore., company.
``The infrastructure for job-shop-type molding in this area isn't keeping pace with the capacity needed,'' Klein said. ``There have been a lot of newcomers to the area, but having the right machine sizes available for the products is a problem.''
With Epson and Hewlett-Packard producing millions of printers requiring high volumes of parts annually, Klein said competition for custom molders' machine time has led to price wars.
Competitiveness within the Northwest molding community has heated up, particularly with big players coming onto the scene such as the Tech Group, Nypro Inc. and SPM, a Dynacast Co. Some molders have mixed emotions about this new influx, but most agree that competition has been good.
Mike Treadaway, vice president and general manager of Puget Plastics Inc., with plants in Portland and Tualatin, Ore., said, ``We've pretty much had thisarea to ourselves for a lot of years, but what I like about getting the caliber of molders that are coming in is that it's raised the quality level and the expectations of the molding community. The impact has been positive.''
Increased competition from major molders in the area also has leveled the playing field for companies like Puget.
``Many times we bid for jobs against small shops and the price comparisons were not apples to apples,'' Treadaway said.
John Normandin, sales manager for Vision Plastics Inc. in Wilsonville, Ore., said he believes competition is tough everywhere.
``Where isn't it competitive?'' Normandin said. ``Everybody's working hard and earning every piece of business we get.''
Normandin also said newcomers to the Northwest might not find the jackpot they expected.
``Some come here thinking that because they're the big guns in one area they can be here too, but there's loyalty to the long-time molders here,'' he said.
Larry Noggle, executive vice president for SPM agreed.
``It's tough up there,'' he said from his SPM office in Anaheim, Calif. ``It's a real competitive market that brings the level of intensity up for all of us there to achieve world-class molding.''
Despite competition, OEMs - particularly in the computer industry - keep expanding production to handle market demand.
Conversion of computer housings from metal to plastic also consumes more machine time. That means more work for custom molders in the Northwest.
``Our industry is keeping pace in parallel with the growing [computer] industry,'' said Ep-son's Klein. ``So we have to beconcerned with outside molding capacity.''
Capacity problems on the outside prompted Epson to expand its in-house molding department. The company began injection molding in-house after it developed proprietary molding techniques and complicated molds to manufacture its dot-head print components, Klein said.
It purchased 15 injection presses with less than 60 tons of clamping force. But that represented about 15 percent of the company's total molded parts requirements. Outside molders received the balance.
With Epson's business growing rapidly and press capacity shortages on the outside, Klein said Epson recently implemented a three-year plan to expand its in-house molding capabilities by adding up to four large-tonnage presses to mold larger computer housings.
Epson also plans to double production capability, increasing the percentage of components molded in-house to 30 percent, leaving 70 percent for outside molders.
``But that 70 percent represents far more dollar volume since they'll be getting more work from us as well,'' Klein said.
With about 200 custom injection molders in Oregon, many of them ``mom and pop'' shops, not all of them can expect to get work from major OEMs.
SPM's Noggle said that big OEMs only work with companies that have all the procedures in place for world-class molding.
``The driving decision on whether or not you can be a vendor for [large OEMs] is how your whole operation is put together,'' said Noggle. ``They want to see the infrastructure in place that can support them.''
Klein will not rule out business with smaller molders in the area, but agrees with Noggle that certain systems must be in place to ensure the quality and service Epson demands of its vendors.
``The mom and pop shops are still an OK place for us to do business, but do they have an adequate quality-control system in place?'' asked Klein. ``Do they have a maintenance and service program for molds and machinery to ensure optimum uptime for producing our requirements? And three, we look at the flexibility of the operation. Some of our molds run 24 hours a day, seven days a week.''
The concern that Puget's Treadaway has about the growth of the plastics industry in Oregon is its affect on the job market.
``[Growth] is going to tighten the labor market here considerably,'' he said. ``We're already at 4.8 percent unemployment which means entry-level jobs will be pretty tough to fill. We're concerned about that.''
Ellen Nyberg-Hall works with the plastics industry at the Oregon Department of Economic Development. Plastics has been designated as a key industry for Oregon.
``There's a tremendous de-mand in the Portland area for workers in the plastics industry,'' she said. ``The plastics industry is expanding more rapidly than any other industry in the state.''
In Oregon, 6,700-7,000 work directly in the plastics industry at about 200 companies. Most in the industry hope the growth trend continues.
``All this growth has been beneficial to the industry,'' said Puget's Treadaway. ``It keeps you on your toes and makes us a better company overall.''
Epson's Klein said growth in the custom molding industry, as well as the new competition that growth has fostered, has been healthy for the Northwest.
``Certainly we needed the [machine] capacity,'' he said. ``And to tell you the truth, we could use more.''
