Chicago — Polyethylene is kind of a big deal for Novolex and Kroger Co.
Hartsville, S.C.-based Novolex is one of North America's largest plastic bag makers. Cincinnati-based Kroger is one of the largest grocery chains in the United States. Executives with both companies spoke at the Global Plastics Summit 2016 about the PE market.
“I'm always asked what resin is going to do, and I always say it's going to change,” Novolex Chairman and CEO Stan Bikulege said. “It's important to communicate that to our customers. We can have two massive entities on either side, and we can't be the one to hold things up.”
Large amounts of new PE capacity are set to come online in North America, and that should be a good thing for Novolex and other processors, according to Bikulege.
“Raw materials are giving us an opportunity to grow in North America and compete globally,” he said. “Hopefully, we can benefit from that.”
High density PE is one of Kroger's largest purchases, according to global category sourcing leader Brian Soder. The firm — which operates almost 2,800 supermarkets and almost 800 convenience stores in 35 states — leverages its HDPE purchases for dairy bottles and other products and also uses suppliers in different areas, he said. This practice allows Kroger to minimize risk if a resin shortage occurs.
Novolex was known as Hilex Poly in 2012 when it was acquired by Chicago private equity firm Wind Point Partners. Since then the firm has made five acquisitions, most recently buying Heritage Bag Co. in April. Novolex employs 6,100 at 43 North American plants and sells to 2,500 customers.
Novolex had sales of $2.3 billion in 2015, including plastics, paper and other products. Its plastic products include retail bags, can liners and bags for produce and health care.