Controversy swirls within the small market of companies that make and recycle plastic blasting media and related products.
U.S. Technology Corp. of Canton, Ohio, sued Poly-Pacific International Inc. of Edmonton, Alberta, in an Ohio court and in U.S. District Court, claiming unfair competitive practices.
In the meantime the Canadian firm last month announced plans to open a plastics lumber manufacturing plant in California later this year.
Poly-Pacific acknowledged the suits in a Nov. 9 news release, which stated that U.S. Technology ``alleges among other things that Poly-Pacific's product does not meet U.S. military specifications and its recycling program does not meet contractual and environmental standards.''
Thomas Lam, Poly-Pacific's chairman, president and chief executive officer, did not respond to several requests for comment. Raymond F. Williams, president of U.S. Technology, said, ``We are quite confident that justice will prevail.''
Media blasting is a method of using plastic regrind to remove paint from aircraft and other sensitive surfaces without using sand or chemical agents. Media blasting also is used to clean molds, deflash electronic components and restore cars. To be cost-effective, the media needs to be reused about 10 times.
When the regrind no longer is useful, Poly-Pacific takes the waste from its customers and turns it into plastic lumber through an Aylmer, Ontario, subsidiary, Everwood Agricultural Products International Inc.
U.S. Technology filed the state case, which alleges infringement of trade secrets, in Canton in May 2001. The litigation, set for an early May trial, was ``continued because the defendant's counsel withdrew,'' Williams said by telephone.
U.S. Technology filed the federal suit in Akron, Ohio, in September. Depositions begin soon.
In 1999, Poly-Pacific sued U.S. Technology in an Alberta court. The pending case also alleges trade-secrets infringement.
Bad blood between the two companies actually dates back nearly a decade. In January 1993, U.S. Technology had sued a former executive, Phillip Tilson, and his new employer, Poly-Pacific, in an Alexandria, Va., federal court. The parties settled four months later and a judge closed the case in October 1993.
Williams estimated the global market for plastic blasting media at $30 million, with about $28 million of those sales in the United States and Canada.
``The market seems to grow at about 12 percent a year,'' Williams said.
``It is definitely not a very large industry,'' agreed Raj Trikha, managing director of McDonald Investments Inc. in Cleveland.
Creation of lighter media powered by small blower motors, instead of air compressors, will open new applications such as the inner parts of ships, Trikha said.
Large corporations have entered the market with plans to be low-cost producers, Williams said, but technology and customer support - more than price - drive the niche market. Another supplier, Maxi-Blast Inc. of South Bend, Ind., opened in 1981 and constructed a 46,000-square-foot facility in 2000.
U.S. Technology originated in 1977 as an internal program within a Koppers Chemical Co. unit in Connecticut. The media business relocated to Canton in 1992.
Williams said there is a fundamental difference between what the company does and traditional plastics recyclers.
``We deal with hazardous waste,'' he said. ``We recycle specialized thermosets with specific applications,'' primarily blasting media. ``We originated the process [and] we are the largest company in the industry for plastic abrasive materials.''
The availability of plastic media has led military and federal agencies to turn away from chemical stripping agents.
``Between that and the [post-industrial thermoset] recycling program, we are the largest reducers of hazardous waste within the Department of Defense,'' Williams said. ``We have a huge environmental impact, and we are very protective of the correctness of environmental programs.''
The firm also markets a nanocomposite material called Magic. The firm said a Magic user can remove the paint from an aircraft in two days, vs. four days for competing materials, and three to four times faster than its top plastic blasting media.
Privately held U.S. Technology occupies about 200,000 square feet in Canton. The firm does not disclose sales, but it said they are split evenly between military and commercial applications.
Everwood, Poly-Pacific's plastic lumber operation, uses spent media and thermoplastics to make agricultural fence posts and other products.
An April 29 news release said Poly-Pacific had ``secured premises in California to open its first U.S. manufacturing and recycling facility'' and expected it to open in mid-2002. The company did not reveal the location.
``We have been waiting for over two years to open a U.S. facility, and we grew tired of the delays and decided to rely on our own initiative to find premises to move into,'' Lam said in the release. The California plant ``will enable Poly-Pacific to service the agrichemical industry'' there by recycling used pesticide containers.
Meanwhile, the Environmental Protection Agency is conducting a review of some Poly-Pacific lumber products.
Poly-Pacific's agricultural fence posts are legal for use in Canada, but EPA offices in various regions have taken conflicting positions on the legality of these posts being used in the United States.
``We are trying to collect data from Poly-Pacific,'' said David Fagan, a staff person at the office of Solid Waste in the EPA's Arlington, Va., headquarters. ``We are working on this issue.''
Meantime, Poly-Pacific has announced several recent contracts:
* On Oct. 22, the company announced a US$3.2 million, five-year contract with the Naval Surface Warfare Center in Crane, Ind., to supply plastic blasting media, primarily for ground equipment.
* On March 6, Poly-Pacific announced a one-year contract renewal with the Marine Corps Air Station Cherry Point in Havelock, N.C., primarily for media for helicopters such as CH-53 Sea Stallions. The company estimated the annual value of the contract at US$517,000.
* On May 15 the company announced several U.S. military and commercial contracts for supply and recycling of plastic blasting media, totaling more than US$730,000.
Poly-Pacific, traded on the Canadian Venture Exchange, reported profit of C$172,000 (US$108,000) on 2001 sales of C$3.8 million (US$2.4 million). The company's U.S. business generates about 95 percent of its sales.