Everywhere they've looked, North American compounders and concentrate makers have seen numbers on the rise in 2014.
Compounders in the United States and Canada increased their purchases of commodity resins by 16 percent in the first nine months of the year, according to the American Chemistry Council. That total included compounders buying 41 percent more PVC, 11 percent more high density polyethylene and 9 percent more polypropylene.
Numbers also were on the rise for leading compounder A. Schulman Inc. The Fairlawn, Ohio-based firm reported 15 percent growth for its fiscal year ended Aug. 31. That included a 12 percent gain in the Americas. Schulman's fiscal 2014 profit also more than doubled to $57 million.
“Reshoring is the biggest opportunity we see in the U.S.,” Schulman Chief Operating Officer Bernard Rzepka said in a recent interview in Fairlawn.
“Our U.S. sales are projected to double in the next five years,” added Rzepka, who will become the firm's president and CEO on Jan. 1 when Joseph Gingo retires.
Fellow compounding kingpin PolyOne Corp. of Avon Lake, Ohio, reported more modest sales growth of 4 percent for the first nine months of 2014. Included in that total is an 8 percent sales gain in its performance products and solutions unit, which includes PVC compounds.
“We've had a good, solid year globally,” said John Van Hulle, president of PolyOne's global color, additives and inks unit. “Transportation and health care have been especially strong.”
The unit's sales were up more than 1 percent through September, with operating profit climbing almost 17 percent.
Executives at other non-public compounders and concentrate makers had similar growth stories to tell. RheTech Inc. of Whitmore Lake, Mich., reported the most high-flying growth number, with business development vice president Jim Preston saying that sales are up 15 percent so far in 2014.
“A lot of [the growth] has been in automotive,” Preston said. “But the recession forced us to more work outside of automotive, and that business has been coming back too.”
RheTech's product mix includes compounds based on PP and engineering resins. Non-auto work for the firm has included toys and consumer goods such as totes and cutting boards.
Sales for 2014 also are up by double-digits at Calumet City, Ill.-based Plastics Color Corp.,
according to business development vice president Tim Workman.
“We've focused on higher-end, value-added materials, like those that go into medical devices,” he said. “Packaging in general remains our largest single market. In consumer packaging we've been able to take market share from other suppliers.”
More modest growth rates are expected at compounders/concentrate makers Penn Color Corp. in Doylestown, Pa., Ampacet Corp. in Tarrytown, N.Y., and Techmer PM in Clinton, Tenn. Penn Color's 2014 sales are on track to be up 5 to 6 percent, according to market development director Robert Kaminski. That rate isn't quite what the firm had forecasted, Kaminski said, but the firm's sales still are up in packaging, and sales into building and construction “are starting to see a little growth.”
Ampacet's North American sales growth in pounds should finish 2014 at 2 to 3 percent, said Robert Fielding, the company's senior vice president and general manager for North America. He described that rate as “a little bit above expectations, given the economy and uncertainty.”
“Flexible and rigid packaging did reasonably well,” Fielding added. “Those areas are a little insulated from economy. People still eat and buy things like shampoo.”
Techmer is on pace to be 3 to 5 percent ahead in sales by the end of the year, President Ryan Howley said. Sales at the firm's engineered materials unit could be up as much as 30 to 40 percent.
“There were some hiccups in the first half because of the long winter,” Howley said. “We got a late start in agriculture and in household, toys and outdoor, but it's picked up.”
Executives at compounders Asahi Kasei Plastics North America in Fowlerville, Mich., and Teknor Apex Co. in Pawtucket, R.I., declined to cite growth numbers, but each said their sales are ahead of last year's pace.
“Auto is leading it,” Asahi Kasei President John Moyer said of his firm's growth. “All of our customer base seems to be growing. Lightweighting is creating opportunities in auto. It's giving compounders an advantage to grow ahead of the curve.”
“Our sales are strong and up to our expectations,” Teknor President William Murray said. “Automotive continues to be very good around the world. Our business in nylon and [thermoplastic vulcanizates] is growing by double-digits into auto.
“We feel that our polymer-neutral approach is working,” he said. “PVC, TPV, styrenics, nylon — we can go with whatever the correct solution is.”
The big economic picture
In a broader sense, North American compounders are benefiting from some macro-trends. U.S. GDP growth is on track to be around 3 percent, North American auto builds are expected to reach 17 million and U.S. housing starts are expected to approach 1 million for full-year 2014.
These rising tides are lifting many boats.
“We had a good first half,” said Craig Nikrant, president of specialty engineered materials at PolyOne. “Health care is a market we've chosen to focus on, and it's up double digits thanks to applications like transparent catheters.”