Dear Resin Supply Industry:
Your world as a supplier and mine as a processor are quite “topsy-turvy” these days! However, even at my advanced age, I can remember similar events in history. Does the oil embargo of the mid-70's ring a bell? Things were so bad and the suppliers so opportunistic back then that we plastics processors formed an association to “fight back.” (Seems to me like the name was American Plastic Processors or something like that?)
Here is a true parable for you: When I was a baby sales engineer, 30 years ago, we turned down an unnamed crystal styrene program which later became one of the best-known rigid packages in the snack-food industry. The lesson that I then learned was that, although raw material was on allocation, impossible to buy and was in a situation that “would take years to normalize” — in the four to six months it would have taken to build several high-cavitation molds, the shortage was over and supply was abundant. In fact, the price dropped pretty steeply too!
My reason for writing this open letter to all of you is to remind you that things that go around tend to come around. What I learned back then was that the difference between a shortage and a surplus is one truckload. Please keep that in mind as you strategize on how to deal with and protect us processors while at the same time restoring your bottom line.
I have to brag a little and say that we enjoy excellent relationships with all of our own resin suppliers. We have a long history of paying our bills within terms and, specifying carefully the proper resin and not shopping around. As a result, our suppliers always take good care of us, including the current situation. Unfortunately, we have a whole industry here to protect, and I worry. The cost of health care, global (Chinese) competition and predatory price-downs (“marginectomies”) already make life more than challenging enough. Good and fair business practices absolutely must be the order of the day and not opportunism and “catching up fast” for the challenging past few years. All of us need all of you really badly today — but just remember, some day the shoe will surely be on the other foot again!
Best regards,
Hoop Roche
Chairman
Erie Plastics Corp.
