High demand, coupled with capacity limitations, corraled a rather strong 1995 for makers of unsaturated polyester. Expansion projects in 1996 should boost supplies, industry officials said. However, those projects are not expected to spur sales until midyear.
In 1995, the U.S. unsaturated polyester industry reported record sales of $1.6 billion, a 10 percent increase over 1994. This is on the heels of a 17 percent increase in 1994 vs. 1993, according to year-end statistics from the Society of the Plastics Industry Inc. in Washington.
It also was a record year at Ashland Chemical Co. of Columbus, Ohio, a top-ranked maker of unsaturated polyester, said T. Richard Evans, business director at the firm's Composites-Polymers Division.
Although Evans did not dis-close figures, he said Ashland expects to hold the same sales levels in the first half of the year.
``But because it was a record year, no one's crying,'' Evans said, adding the second half of the year should see 5 percent growth.
Neil McCarthy, vice president of Premix Inc.'s molding division in North Kingsville, Ohio, said he is optimistic for 1996, ``unless the economy takes a dip.''
Officials at Premix, a processor of unsaturated polyester, expect a sales growth of 1-2 percent above the inflation rate, which would be about 4-5 percent, McCarthy said.
``The automotive industry, which had a big year in 1995, is key for us - along with the appliance industry,'' he said.
High demand is being experienced because more fiberglass-reinforced products, using thermoset or thermoplastic resins, are being used to replace other materials in the auto-motive industry. Plastics News reported Dec. 18 that SMC Automotive Alliance of Troy, Mich., expects total production of sheet molding compound parts to increase 20 percent in 1996. The alliance, consisting of seven composites processors, said 80 new SMC applications will appear this year.
However, Keith Maguire of Eagle-Picher Industries Inc.'s Plastics Division, said the automotive industry should be particularly flat, with a sales increase of about 2 percent. But overall the industry should see a 4-6 percent growth, said Maguire, manager of material development processing in Grabill, Ind.
Sales should improve by midyear, but a squeeze will be on suppliers, particularly in the auto industry, he said, adding that the glass situation will be eased by supplier expansions.
Budd Co., a supplier of SMC parts to all of Detroit's Big Three, foresees demand for the material to be flat in 1996 because of the economy. Mike Dorney, sales manager of the Troy, Mich., company, said sales are expected to pick up again in the 1998 and '99 model years.
Alpha/Owens-Corning of Collierville, Tenn., a large producer of unsaturated polyester, added 50 million pounds of capacity in 1995, said Jack Roesle, vice president of sales and marketing. The company, which expects 4 percent growth for the material this year, also will add capacity at its Lakeland, Fla., plant by the end of the first quarter, he said.
Fiberglass expansions at Owens-Corning Fiberglas Corp., PPG Industries Inc. and Vetrotex CertainTeed Corp. are expected to be onstream by the middle of the year, and this should ease demand, said Ashland's Evans.
``For the first six months, our customers will be limited on what they can purchase because they won't be able to get the fiberglass needed to make it,'' he said.
As previously reported, OCF of Toledo, Ohio, is boosting production capacity for glass-reinforcing fibers at facilities in Brazil and South Korea. It also plans expansion projects in the next two years at Jackson, Tenn.
PPG of Pittsburgh purchased a glass-fiber plant in Chester, S.C., and plans to begin production this spring.
Until then, the industry is saddled up for a tough ride.
``Let me tell you, it takes a long time to open up a glass plant,'' Premix's McCarthy said. ``They may have made announcements [about opening plants], but until they do, it's not a relief to us if it's not in operation.''
As a result of material short-ages and the cost of raw materials, some companies already have plans to test the market for price increases in January, he said.
Jack Roesle, vice president of sales and marketing at Alpha/Owens-Corning of Collierville, Tenn., said prices should hold steady for the first quarter, then increase.