Resin distributor and compounder Osterman & Co. is flourishing amid an uncertain economy, thanks to resin makers' increased reliance on independent distributors.
Cheshire, Conn.-based Osterman saw its sales volume in pounds grow by 50 percent last year as it hit the $175 million mark. In 2003, volume in pounds is expected to exceed 500 million, with sales checking in above $200 million.
``As resin suppliers have cut back, the space that distributors are allowed to play in is getting bigger and bigger,'' President James Dwyer said in a recent telephone interview. ``Distributors already had been doing business in [less-than-truckload] amounts, and the next area is full-truck, then multiple trucks and hopper cars.
``Some of these accounts that resin makers are turning over are 10 million pounds a year,'' added Dwyer, who bought the firm in 2001 from founder Russell Osterman.
Osterman & Co., which last year bought Plastic Compounding & Chemical Corp. of Chicago, expects to make one or two more acquisitions in distribution or compounding by the end of 2003, Dwyer said. In addition to prime and nonprime resin distribution, Osterman operates engineering resins compounder Engineered Polymers Industries in Chicopee, Mass.
Other projects on the table for Osterman in 2003 include :
* Adding a licensed nylon supplier by the end of April. The move will give Osterman its first licensed engineering resins partner. The firm already distributes prime material for BP Amoco Chemical Co., Nova Chemicals Corp., Formosa Plastics Corp. USA and American Polymers Inc.
* Adding four new sales staffers, bringing its total to 29. Osterman added five sales reps in 2002.
* Adding an underwater pelletizer to its third compounding line. Its second line added an underwater pelletizer late last year.
Osterman also plans to add a fourth single-screw compounding line in Chicopee in 2004. In the last six months, the compounding unit has added glass-filled nylon and flame-retardant grades of polycarbonate, PC/ABS and polystyrene to its product mix.
About 60 percent of Osterman's sales are in distribution of nonprime resin, with 30 percent in prime resin distribution and 10 percent in compounding. The firm employs 75.
Most of Osterman's nonprime growth has been in film and injection molding markets, while its prime growth has come from those markets as well as the sheet market. Compounding growth has come from electrical/electronics, floor-care, hand-tool, automotive and lawn-care markets, Dwyer said.