North American resin distributors are having another good year in 2014 — and industry executives are confident they can keep that run going into 2015 as well.
The distribution unit of Avon Lake, Ohio-based PolyOne Corp. saw its sales grow 4 percent in the first nine months of 2014 to $852 million. A similar business at Fairlawn, Ohio-based A. Schulman Inc. saw its sales in the Americas grow more than 4 percent to more than $47 million in the fiscal year ended Aug. 31.
Commodity resin sales in the region via distribution grew 14 percent in the first nine months of 2014, to more than 3.2 billion pounds, according to the American Chemistry Council. Distribution sales of linear low density polyethylene led the way, surging 35 percent to almost 700 million pounds. Sales of LDPE and polypropylene through distribution each grew 12 to 17 percent in that period, with the smaller PVC sector — consisting of resellers — growing 52 percent.
High density PE sales via distribution also ticked up 2 percent in that period. The only regional commodity resins selling less through distribution in those nine months was just polystyrene, where sales were down 8 percent.
Sources of growth
“We're up in all polyethylenes, including HD,” distribution veteran Ed Holland said. “Business is growing and the economy is getting better. Distribution is growing faster than GDP.”
Holland, owner of M. Holland Co., a leading distributor based in Northbrook, Ill., has a point there, since U.S. GDP growth remains in the low single digits. Distribution sales apparently are benefiting from both resin makers and processors wanting to diversify their supply options.
“Our film business is up big and a lot of that is in linear low [density PE],” said David Skoczen, senior vice president and general manager at H. Muehlstein & Co. Inc. in Wilton, Conn. “It's a combination of [resin] producers wanting to grow their business not only in volume, but in number of users.
“The polyethylene guys are coming come out with newer materials, and [distributors] can get them to second-tier or third tier users,” he added.