Indianapolis — Business has been reasonably good for North American plastics processors, with stable material costs and interest rates as well as steady sales growth. But companies need to prepare themselves for changing environment in the next economic cycle.
That's a conclusion from the 2016 North American Plastics Industry Study, which also found that about one in five processors qualify as “highly successful,” up from a historical rate of about one in 10.
Jeff Mengel, a Plante & Moran partner and long-time director of the annual survey, shared the findings at the Manufacturers Association for Plastics Processors (MAPP) Benchmarking and Best Practices Conference in Indianapolis.
With an estimated 16,000 plastics processors in North America, P&M defines “highly successful” as those with a 10 percent return on operating income, 15 percent return on assets and 5 percent sales growth.
This year's study is based on 90 completed surveys representing 154 facilities with over $5.5 billion in sales in a broad array of processes from United States, Canada and Mexico. The polling period ran from Jan. 1, 2014 through Mar. 31, 2016.
Mengel was encouraged by the high percentage of highly successful processors. Their financial successes are built on the foundation of operational excellence — compared to the average participant, the highly successful companies have 13 percent higher productivity, 18 percent higher press utilization and 29 percent lower internal defective parts per million.
The positive trends also hold true for the overall industry, with higher productivity and higher profit margins.