Polypropylene boom maker Meltblown Technologies benefited from efforts to clean up the BP oil spill in the Gulf of Mexico but now the firm has let go many of the extra workers it hired.
Some makers of PVC booms are in even worse shape, claiming that BP has canceled orders, according to an Aug. 12 story in the Wall Street Journal.
Meltblown based in Alpharetta, Ga., with a manufacturing plant in Sandersville, Ga. hired 90 additional workers to handle orders that mushroomed after the BP oil rig exploded in the gulf in late April. The added business allowed Meltblown to purchase new equipment that it needed, sales Vice President Jeff Sherman said in an Aug. 20 phone interview.
With the spill now under control, Sherman said his firm has cut 70 of the jobs it had added. But the extra revenue will boost Meltblown's sales to about $20 million this year. The firm's primary product is melt-blown PP fiber. The PP booms made by Meltblown look like a towel, he said.
We expanded production and sold a lot of boom, Sherman added. We'll be able to use the machinery we bought for other business as well.
The WSJ story cited problems at PVC boom maker Victory Awning in Fort Worth, Texas, and PVC boom distributor Value Vinyls Inc. in Grand Prairie, Texas. Victory officials said that BP first ordered, then rejected large amounts of PVC boom. They said in the WSJ story that BP still owes the firm about $400,000.
Value officials estimate their firm, which imports products from Asia, has about $500,000 worth of PVC boom inventory on hand that its customers no longer want, since BP has canceled orders.
Meltblown's Sherman said PVC boom makers probably were taking bigger financial risks than his firm did, because PVC booms cost 10 times as much as PP booms. PVC booms also are reusable, as compared to disposable PP booms, he said.
In an Aug. 20 phone interview, plastics industry analyst Robert Eller echoed the concerns of PVC boom suppliers.
They jumped in response to an opportunity, and that's appropriate, said Eller, president of Robert Eller Associates LLC in Akron, Ohio. But now BP and other customers have to honor their contracts.
Any time you disrupt a supply chain like this, it can cause problems.
Eller added that quality control also becomes a bigger issue in such short-term opportunities, especially as booms are not a high-end sector of the PVC coated-fabric market.