It's been a long, ugly downturn for the North American plastics housewares sector, and the headlines indicate the problems aren't over yet.
Some of the biggest names in housewares have made huge cutbacks already — Newell Rubbermaid Inc. closed its big Wooster, Ohio, plant; Tupperware Corp. cut nearly half the jobs at its only North American plant, in Hemingway, S.C.; Aero Plastic Inc. of Leominster, Mass., filed for Chapter 11 on Jan. 6.
Now some second-tier companies are suffering. In recent weeks, we've had stories on Cornerstone Products Inc., dba Custom Molded Plastics Inc., filing for Chapter 11 protection, along with Brook Park, Ohio-based Laich Industries Corp. (Both Laich and Cornerstone plan to stay in business.) This week a small Canadian company joins the party, with Integrated Plastics Ltd. of Scarborough, Ontario, announcing plans to liquidate.
They're not all singing the same blues, but the choruses sound alike: They blame Asian competition, fluctuating raw material prices and the difficulty of getting retailers to accept price hikes.
Take a walk down the housewares aisle of your local retail megastore and you'll see what's happening. Along with products from familiar names like Rubbermaid and Sterilite Corp., you'll see more imported products. You'll also see items from companies that didn't manufacture in the North American market a few years ago. Housewares molders are having a tough time differentiating their products and getting any sort of price premium.
Housewares molders live and die with their proprietary products and their ability to deal with retailers. They battle the competition with fresh designs, new products and by cutting costs to the bone. Some try bypassing retailers and selling through less-conventional channels, like television shopping channels or catalogs.
Executives at custom molders may tire of dealing with original equipment manufacturers. But, at least in the current economic climate, it seems that proprietary molders in the housewares market aren't any better off.