OXFORD, MASS. — Although dwarfed by its competitors, polystyrene maker American Polymers Inc. believes it has remained competitive and profitable by choosing its targets wisely.
Since its inception in 1984, Oxford-based API has focused on injection molding markets, avoiding the cutthroat, mass-volume food-packaging applications that dominate the North American PS market.
As a result, the firm's sales were flat last year when sales industrywide were down almost 4 percent, Executive Vice President Michael Skehan said in an April 19 interview in Oxford. Sales volume, in pounds, is expected to be up 10 percent this year.
"We were surprised by the reports of negative growth in polystyrene," Skehan said. "We saw a slowdown in automotive, but our overall sales weren't down."
Diversification also has played a key role in API's survival. The company gets 60 percent of its revenue from PS sales, with the remainder coming from its resin distribution business. API distributes ABS and styrene acrylonitrile for EniChem America Inc., polypropylene for Epsilon Products Co. and specialty compounds for ECM Plastics Inc., which bought API's compounding business in 1996.
Total API sales for 2000 were estimated at $90 million.
API's resins end up in a variety of injection molded uses, including appliance parts, housewares, toys, cassette cartridges, tote bins and medical devices. A smaller part of its business comes from profile extrusion.
Most recently, API introduced a high-impact/high-flow PS grade for use in large industrial parts such as spools and reels. The new grade was commercialized in February.
With 120 million pounds in capacity — 75 percent in high-impact PS and 25 percent in crystal PS — on five lines, API can't keep pace with PS titans like Nova Chemicals Corp. and Dow Chemical Co., which operate plants at least five times that size.
As a result, API goes after smaller customers and offers services such as pulverizing that larger resin makers overlook, Skehan said.
"We really compete with the companies that distribute polystyrene for the bigger players," he said. "Large resin companies aren't looking for 1 [million-] to 2 million-pound accounts, but for us, that's an ideal size."
And although API isn't back-integrated into feedstocks like styrene, the firm prides itself "on being able to secure monomer at an affordable rate."
About 60 percent of API's sales originate from New England and the Middle Atlantic States. In an attempt to expand, the firm plans to add two or three sales representatives in the Chicago area this year to build business in the Midwest. Other prime growth areas include Toronto and Southern states including the Carolinas, Skehan said.
API recently moved its headquarters to a new building near its Oxford plant. Its offices originally were in Oxford but had been in nearby Worcester, Mass., for the past several years. API employs 30 in its offices and another 30 in its plant.
Capacitywise, Skehan said API is still in good shape following a 50 million-pound-per-year addition in 1996. Future capacity additions may be done through "coproduction" with larger PS makers through which API essentially would be buying manufacturing time.
Skehan said the firm already has set up coproduction deals a few times on a limited basis, but he declined to offer details.
API's Oxford plant was built in the early 1960s by Carl Gordon Industries, a resin maker that also owned Worcester-based compounder Hammond Plastics.
CGI built a second plant in Owensboro, Ky., in the mid-1970s before going bankrupt a few years later. The Oxford plant was sold to Asoma Chemical, a local resin and chemical trader, while the Owensboro site was sold to packaging maker Dart Industries.
Asoma employees Harold Doherty, Daniel Coakley and Stanley Raphael bought the PS business in 1984. Doherty remains active as API's president.