North American PET resin manufacturers have decided to form their own trade association - without bottle makers and other customer groups - several months after losing a fight with them over attempts to limits imports of foreign plastic.
The PET Resin Association said it will look at a range of issues, including foreign trade, promoting PET and statistics, and said creating the new group is not intended as a slap at the industry's long-standing trade association, the National Association for PET Container Resources.
But other industry observers said the move seems to signal increasingly divergent interests between resin makers and processors over issues like foreign trade and how to handle recycling, a key priority for NAPCOR but sometimes a sore spot for resin firms worried about losing market share to recycled material.
It's difficult to tell what PETRA's Oct. 3 announcement means for the industry, since the group still is sorting out its agenda and who its officers will be.
Both PETRA and NAPCOR said they hope to work closely together, including on supporting recycling initiatives. Officials from both said they believe there is room for two trade groups, if both can get enough resources to stay healthy.
PETRA's formation comes after a tough period for NAPCOR: The group had to slash programs and lay off most of its staff last year after several prominent resin companies and container makers dropped out to save money.
NAPCOR only recently has started to emerge from that, slowly adding staff, but some industry observers said they expect one or two of the three remaining resin makers in NAPCOR to leave the group. PETRA includes membership from all six major PET resin makers.
Resin maker Wellman Inc. in Shrewsbury, N.J., said the new group will look at a range of issues.
``There are trade questions, [and] getting out the right message ... to promote the growth of PET and the North American producers,'' said Robert Taylor, business operations manager for Wellman's PET division and an active participant in forming PETRA. ``This organization isn't made to replace any organizations out there. We actually hope to work with them.''
NAPCOR has been very focused on recycling issues, but the resin industry needs a broader trade association for issues like setting testing standards for PET and countering negative publicity, Taylor said. In a press release, PETRA said it also is looking at industry/consumer education and technical programs, but officials did not mention recycling.
Wellman had been a member of NAPCOR, but dropped out because it did not think it was getting enough value, Taylor said.
NAPCOR Chairman Gerald Claes, an executive at container maker Graham Packaging Co. LP, said it is too soon to know what impact PETRA's formation will have on his group.
``It could have a major impact; it could have very little impact,'' he said. ``Until we get some feedback from all the resin companies, it would be premature to say that.
``I'm optimistic NAPCOR will have a healthy relationship with this new group,'' he said.
PETRA consists of six companies: DAK Americas Inc. in Charlotte, N.C.; Eastman Chemical Co.'s Voridian division in Kingsport, Tenn.; Invista in Wichita, Kan.; M&G Polymers USA LLC in Houston; Nan Ya Plastics Corp. in Livingston, N.J.; and Wellman.
DAK, M&G and Voridian belong to NAPCOR as well. NAPCOR Executive Director Dennis Sabourin said those three companies have said specifically they are not unhappy with NAPCOR but want to pursue resin-specific issues.
Earlier this year, several PETRA members lost a case at the U.S. International Trade Commission, where they sought antidumping duties on PET resin from India, Indonesia and Thailand.
Beyond disagreements about trade, other industry officials said privately there are increasing differences in how the two camps look at recycling. Speaking privately because of the close-knit relationships in the industry, one source said resin suppliers faced with overcapacity problems see recycling as more of a threat to their sales than they once did.
PETRA, however, plans to work on recycling, and sees it as an important issue, said Ralph Vasami, executive director of the group and a vice president at Kellen Co. in New York, an association management firm hired to operate PETRA. ``They are looking at the best way to work with NAPCOR on that,'' he said.
Luke Schmidt, who was president of NAPCOR until his job was eliminated in a budget-cutting move last year, said he felt the resin industry always ``took the high road'' and supported recycling, even as companies were having some economic challenges.
But Schmidt also said he thinks the packaging industry as a whole is giving less support to recycling than it used to. NAPCOR, for example, last year laid off its regional directors who worked on boosting bottle recycling.
``The level of support of all of the various packaging groups that have historically been out there supporting recycling, whether it's glass or aluminum or PET, has really decreased over the last couple of years,'' said Schmidt, who is president of consulting firm LB Schmidt & Associates in Charlotte.