Advance Polybag Inc. has tapped Elkridge, Md., for its fifth bag-making plant.
The plant, which will cover more than 100,000 square feet and employ about 100, will be producing bags by the end of the second quarter, API national sales manager Dwayne Schaefer said at Thermoplastic Concentrates, held Feb. 11-13 in New Orleans.
The $15 million facility joins API sites in Metarie, La., where the firm is based, Oklahoma City, Las Vegas and Laemchabang, Thailand. API employs 850 and is a major supplier of retail T-shirt bags.
At the conference, Schaefer said Internet reverse auctions have had a sizable effect on the bag industry of late by saving buyers an average of 10-20 percent.
``Internet auctions are really driving the market down right now,'' Schaefer said. ``There's very little profit margin available, but it's helped us make our business better.''
Schaefer added that reverse auctions played a role in recent closings and sell-offs by bagmakers Orange Plastics, Plassein Inc. and VPI LLC.
The World Wide Retail Exchange, a buying conglomerate of 64 global retailers with combined annual sales of more than $900 billion, also is playing a big role in the bag market, according to Schaefer. WWRE is consolidating purchasing power in different forms, making it more difficult for bagmakers to pass on resin price increases to their customers.
API, which posted sales of more than $100 million in 2003, also faces a challenge from antidumping measures that could affect its plant in Thailand. The proposed fines could make it more expensive for API to bring bags from that plant into the U.S. market.
But Schaefer said there's opportunity for API amid those hurdles. ``Our number of customers has been cut in half in the last 10 years, `` he said ``But we're doing four times as much business.''