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May 15, 2000 02:00 AM

RTI helps processors cut cost of plastic

Frank Esposito
Senior Staff Reporter
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    Resin Technology Inc. (Booth N6191), of Fort Worth, Texas, is looking to save plastics processors money by negotiating better prices and supply agreements with resin suppliers. The 3-year-old firm has found success through a risky strategy: It shares half of the amount that it saves clients, but doesn't make a dime otherwise.

    "Resin buying is the most important thing that plastics processors do from an efficiency and quality standpoint," said RTI's Garland Strong. "But at most companies, the resin purchasing person is buying paper clips and everything else.

    "What the processor needs is someone to sit on the same side of the desk with them with the knowledge to buy better."

    Since 1997, RTI has accumulated almost 200 million pounds of indirect buying power through its clients.

    Strong declined to say how many clients his company has, but he said they're spread out all over the United States and range in sales from $3 million to more than $100 million per year.

    Strong said he could not disclose RTI's annual sales.

    So far, the firm has seen its highest concentrations of customers in injection molding and blow molding. It also concentrates on building relationships with suppliers rather than holding out for an additional penny in savings.

    "The supplier is almost as important as the customer," Strong said. "We don't beat the supplier over the head with a stick to get the best deal. It has to be the best long-term deal for both sides."

    The background of the RTI staff and their links with both the processing and resin communities give them an edge in negotiating that most processors don't have. For eight years Strong worked for Doskocil Manufacturing Co. Inc., an injection molder based in Arlington, Texas. RTI's Bill Bowie spent 15 years at a large Texas film extruder.

    While at Doskocil, Strong worked on starting up a vertically integrated compounding plant, which saved the firm substantially in material costs.

    In addition to helping negotiate better prices for raw materials, RTI also helps clients with storage, logistics and other issues of resin use.

    "We look at a lot of matters related to carrying inventory," Strong said. "If they're buying in box or bulk, if they need another silo, if they need more warehousing."

    RTI's goal is to get prices for its clients that rank in the lower third of the industry's pricing. In most cases, an RTI staffer will take part in price-negotiation meetings between clients and resin suppliers. On average, RTI meets with each client once every two weeks to stay current on their purchasing needs.

    RTI also keeps close contact with resin makers, to track supply and demand situations throughout the industry.

    "A lot of processors get burned because when prices are going up, they see the resin salesman every week, but when prices are going down, they don't see him as much," Strong said. "We know the industry and where the market is."

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