(Nov. 21, 2005) — Does the rise of so many niche trade groups bother anyone?
We understand the need for groups that represent specific, like-minded companies. For example, composite deck makers want a trade association to represent their interests, a fact reported by Matt Griswold on Page 12 of this issue. Since these firms serve a dynamic, growing market, the niche is attractive for a variety of groups.
Right now, three groups are vying to be top dog: the Composite Fence, Deck and Railing Manufacturers Association, a division of the Glen Ellyn, Ill.-based American Fence Association; the Washington-based Composite Lumber Manufacturers Association; and the North American Deck and Railing Association in Meridian, Idaho.
And that doesn't include the Worthington, Minn.-based Plastic Lumber Trade Association, a group whose members include manufacturers of similar products — the difference being that PLTA just represents processors that make all-plastic products.
Likewise PET resin producers recently have formed their own trade group, the PET Resin Association. PETRA will handle issues of particular interest to its members, including foreign trade, promoting PET and statistics. But PETRA's goals will overlap significantly with the existing National Association for PET Container Resources. The difference is that NAPCOR also represents PET processors and machinery companies. PETRA and NAPCOR members say that there's room for both groups, and that they will work together closely.
But the Balkanization of trade groups in the plastics industry creates some unsettling issues. For example, when associations represent just a handful of companies, will they have any real leverage on important issues? Or even minor issues?
Drilling down membership to a small number of like-minded companies can help a group focus on very specific topics, which can make these groups very effective. But who will represent plastics companies on big-picture issues that cut across wider markets?
This points to a need for processors to be involved in umbrella trade groups, like the Society of the Plastics Industry Inc., National Association of Manufacturers or U. S. Chamber of Commerce.
The bottom line brings to mind some terminology from our dusty old math books: When firms allocate their limited resources toward trade associations, they shouldn't ignore the greatest common factor at the expense of the least common denominator.
