Anecdotal evidence indicates that plastics processors are starting to experience a rebound. Basically, we finally seem to be getting more calls and notes from companies that are upgrading or adding capacity instead of closing plants or filing for bankruptcy.
In recent weeks we've even had stories about a few brand-new processing companies. That sort of news seemed to disappear completely a few months ago.
A key question for suppliers, then, is have you kept your powder dry for NPE?
Some segments of the plastics industry — traditionally the machinery end, but others to a lesser degree — have come to expect the NPE trade show to give them a once-every-three-year boost in sales. The next show is scheduled for June 23-27 at McCormick Place in Chicago.
But achieving success at the show depends on a crucial factor: Exhibitors need to have products that excite processors enough to win a sale. That might not be easy, given the tough economic times since the last NPE in June 2000. Think about it. If your company sees its sales cut in half and you're forced to trim your budget, including staffing, how are you going to devote resources to develop new products?
Yet products that make processors more efficient and give them new capabilities are the lifeblood of the industry. Take away innovation and pretty soon the result is stagnation. Without continuously improving efficiency, North American processors can't compete with rivals that enjoy the benefits of cheaper labor, raw materials or utilities.
In a few months we'll see which suppliers have been able to keep a commitment to research and development during this period of shrinking budgets.
With any luck, NPE will roll around just in time to lift the plastics industry out of the doldrums, and more processors will be ready to invest in new and rebuilt equipment.
The signs are pointing that way.
As long as we're prognosticating ...
Which end markets are processors betting on to grow in 2003? The buzz seems to be that the best recession-proof customers for North American processors are in the medical, automotive and packaging industries.
Production of toys, housewares, appliances and anything electronic is moving to the Far East, according to the conventional wisdom. Construction is fairly dependable, but the margins are too slim for new players to survive on a small share of the market.
The conventional wisdom could be right, but, as usual, it looks like the key to success will be finding the right customers and making them very happy. Keeping a rabbit's foot in your desk drawer might not hurt.