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May 31, 1999 02:00 AM

5 RESIN FIRMS QUIT SPI, ARISTECH EXITS APC

Steve Toloken
Assistant Managing Editor
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    WASHINGTON — Five more resin companies are leaving the Society of the Plastics Industry Inc. and one is leaving the American Plastics Council, the biggest realignment yet resulting from the clash between the two trade groups.

    Leaving SPI are Eastman Chemical Co., Fina Oil and Chemical Co., Huntsman Chemical Corp., Mobil Chemical Co. and Union Carbide Corp. All are expected to remain in APC, except for Fina, which left that group last year.

    Aristech Chemical Corp. took the opposite tack and chose SPI over APC.

    Mobil's departure was expected because of its merger with Exxon, according to SPI officials. Exxon was the first major resin firm to leave SPI in August 1997.

    Mobil told SPI it ``is just not getting the value for the dollars,'' according to a Mobil official who asked not to be identified.

    Ten major resin makers in all have left SPI in the past two years — fallout from belt-tightening in the resin industry and from failed merger talks between the two Washington trade groups. That effort became bogged down in arguments over power sharing among resin suppliers, processors and equipment manufacturers.

    Companies, like Eastman, that chose APC said the trade group's recent decision to broaden its structure and take on functions SPI also provides, such as Food and Drug Administration work, was a key factor.

    Eastman officials said they do not think that leaving SPI will hurt their ties to processor customers. Duplicating Eastman staff time in the groups was a large issue in its decision — larger than duplicative dues, they said.

    ``We really hoped for a merger,'' said Phil Griswold, vice president and general manager of Eastman's flexible plastics business.

    Besides FDA work, Griswold said the company's main plastics interests in Washington are transportation, resin statistics and general lobbying, tasks APC now will provide.

    Aristech spokesman John Maurer said, however, that his company considers SPI the more cost-effective of the two groups.

    ``At a time when we are trying to maintain our cost competitiveness, it doesn't make sense for us to be paying two sets of dues to two trade associations that represent one plastics industry,'' Maurer said.

    ``We've decided to go with SPI, just based on the breadth of products we manufacture and that SPI has been working with us in the past.''

    Aristech President Patrick Jack is a former SPI chairman, and was an officer of Fina when Fina withdrew from APC.

    That SPI is cheaper for resin producers such as Aristech generally is true. APC's 24 companies split a budget of roughly $40 million, while SPI's total cost for resin makers is much less.

    APC members are all large resin suppliers, while SPI's 2,000 members are processors, resin makers, equipment suppliers and others.

    The loss of more resin companies will put another hole in SPI's budget less than a month after the group laid off 10 percent of its staff in a cost-cutting move.

    But SPI spokeswoman Jennifer Dills said the group can handle these losses without more layoffs or cuts in services, because its financial reserves are good and space is selling well for next summer's NPE trade show, a significant source of SPI revenue.

    ``We're in really strong financial shape, despite some of these resin companies leaving,'' Dills said. ``When we developed our budget, we did allow for some dues reduction and there is a contingency in our budget to deal with any further resignations, if they occur.''

    SPI's board took steps to enact the group's new structure at a meeting held May 19-21 in Arlington, Va. SPI will be mailing out ballots to its member companies for a vote on who will sit on SPI's councils representing processor, resin and equipment companies.

    Those councils will in turn choose new members for SPI's executive board, she said. The new structure should be in place July 1.

    SPI's board also formed a Mid-Atlantic region, organized to support developing state-level activities in the region stretching from New York to Maryland. The region will be run out of SPI's Washington office and staffed by Donna Dempsey.

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