CHICAGO (June 22, 2:05 p.m. EDT) — Business is good in much of the plastic industry, and everyone is hoping that continues, according to a survey of 278 attendees at NPE 2000.
A sampling of McCormick Place visitors June 19 found that nearly 67 percent were doing more business than last year and more than 60 percent of their companies are generating more profit.
More than a fourth of the respondents are doing the same as last year. Only 5.5 percent said they were doing less business and 8.1 percent have seen profit dip.
The auto industry is driving extensive growth, said Ted Largent, a Rolling Meadows, Ill.-based sales representative for resin supplier Wellman Inc.
"We've had extreme growth this last five to seven years," he said.
Plastics firms are benefiting both from an increase in the number of plastic parts in cars and the record number of car sales in North America.
Business for Lectro Engineering Co. grew nearly 23 percent last year, with sales continuing on a hot pace again in 2000, said Lee Hyde, vice president of operations for the St. Louis-based company.
Though times have been good for many, nearly half (46.9 percent) of those surveyed expect slow growth during the next 12 months. However, some 22 percent expect continued strong growth.
That slightly cautious attitude is reflected in comments from Michael L. Hanks, director of materials for Cooper Standard Automotive's North American Sealing Division business. He said business is "slowing down a little, but is still good.
"We will do as well as last year. The first quarter was outstanding, but it will not keep pace. It is already slowing," he said.
Nevertheless, about 70 percent of those surveyed said that they planned to purchase machinery to expand or upgrade production. Show-goers were interviewed for the DuPont Plastics Industry Survey.
Walter Fields, vice president of sales and marketing at DuPont Engineering Polymers, agreed with the consensus opinion of showgoers. "We still see growth on the horizon, but we also expect the rate of growth to slow a bit."
Fields added: "More important, I think the plastics industry and many of the markets we serve are well-positioned to weather a short-term downturn because industries have strengthened product quality, manufacturing processes and eliminated unnecessary cost due to waste.
"Downturn or no, I think we are prepared to manage our businesses and deliver quality products and services better than we have before. So, I expect any short-term economic correction will only set the stage for continued prosperity over the long haul."
Manufacturers of containers used to ship plastic resin are benefiting from the expanding industry, according to President Nancy A. Strohmer of Insta-Bulk LP, a Houston maker of liner containers for shipping dry bulk materials.
"Plasticwise, we probably predict about 20 percent growth for the coming year," she said. "So much more is being produced and exported."
Strohmer said that the company has been in business for 20 years and this year is the second best in history. 1997 was tops, she said.
The show had a few concerned South American visitors. In CuraÃ§ao, Netherland Antilles, the opening of markets to competition is hurting the locals, according to Jose Van Den Wall-Arnemann, general manager at Vasos Antillanos NV. His company blow molds, extrudes and thermoforms, making plastic cups, bags and PET bottles.
He said that business is down 20 percent and may fall another 10 percent.
"It all depends on the government," he said, noting that tariffs are needed to help the local companies.
In Ecuador, the exchange rate has complicated matters. Raul Vivero, operations manager of Delta Plastic CA, a blow molder and injection molder of bottles and caps in Guayaquil, Ecuador, said resin costs there have risen fivefold.
In 1999, the company scaled back production 80 percent. Since then, the economy has stabilized and materials distributors are starting to give credit and not demand cash upfront.
"It is going to be hard this year too. The power of consumption of the people is weak. We think it is a couple of years before people get better," Vivero said.
Over at custom injection molder Proto-Cast LLC of Douglassville, Pa., molding business is strong, but tooling is not.
"Our molding is doing well. We're running six days a week, and last year was quite good too. But our tooling has been slow for quite a while. We've seen a little slowdown right now with a lot of companies in tooling. A lot of new telecommunications products right now seem to be going offshore," said Ed Snyder, the firm's manufacturing manager.
"After the election's over, plastics are going to go up again. People are sitting on their molds now because the economy is booming. Sooner or later it's got to pick up again," said Mike Wood, tooling manager for Prestige Mold Co., an injection mold builder in Rancho Cucamonga, Calif.
A medical supplier, EPT Boston Scientific Corp. of Natick, Mass., said business is up — for now.
"Over any given year, it goes up and down for us. But now, we're finding that many hospitals and (health maintenance organizations) are requiring that catheters only be used a single time instead of for multiple uses. That should help our business," said Richard Hock, extrusion supervisor.
The best way to build business still is to build the best possible reputation with existing customers, said Gary Porterfield, vice president of C.A.P.S. Inc., a molder of caps and closures for the food and medical industries based in Bridgeton, Mo.
"New business is hard to come by," he said. "You don't call on a customer and get an order the next day. It takes months or years to get that order.
"The best way is to keep the customers you have happy so that you continue to be their molder as they grow."
For injection molder Pent Plastics Inc., based in Avilla, Ind., the appliance and consumer market is particularly strong, according to David Granger, vice president and general manager. He said the markets account for about half of his firm's $20 million in annual sales. The company has been growing 20 percent a year.
"Like everyone else, I think we are expecting a softening, a soft landing," he said. "We'll still see growth. Just not as much."
Al Cotton, spokesman for Nypro Inc. in Clinton, Mass., said, "We certainly anticipate continued growth, emphasizing the overseas operations in particular. We just restructured our North American operations to make them stronger."
The company is expecting growth of more than 15 percent in sales for this year and next. A lot of the growth is in Asia, but he also pointed to the Dominican Republic, as well as Europe and North America. The growth areas are automotive, electronics and health care.
"We're diversified. When one area drops off a little, we'd expect another area to pick up," he said.
"(The plastics industry) is probably just going to keep growing," said Robert Christensen, president of Streamline Manufacturing Co., a custom injection molder in Brigham City, Utah.
"I'm expecting plastic prices to come back down, (and) expecting labor problems to continue," said Richard Bonner, president of Dillen Products, an injection molder of horticultural products in Middlefield, Ohio.