North American compounders and concentrate makers are reporting solid results for 2018, even as supply chain issues have caused some bumps in the road.
Executives with most firms contacted recently by Plastics News said they're seeing sales growth in the mid-single digits for the year, with these increases coming from a wide variety of markets.
“It's been a good year with good top-line growth,” said Ryan Howley, president of Techmer PM in Clinton, Tenn. “Our biggest challenge has been increasing raw material costs for additives and pigments.”
2018 “has met our expectations,” added Pete Prusak, North American marketing head for Clariant Masterbatches in Holden, Mass. “We've seen growth in auto and medical and consumer electronics. We're putting more resources into those areas.”
At Americhem Inc. in Cuyahoga Falls, Ohio, 2018 has been a strong year, with good growth in health care, transportation and film and sheet. The firm's custom manufacturing approach is focused on helping customers solve problems, according to CEO Matthew Hellstern. “We add value beyond supplying materials,” he said.
“The compounding space has had a competitive growth rate for the past several years, and we've seen good growth in 2018 as well,” said Jim Guilfoyle, executive vice president of Advanced Polymer Solutions for LyondellBasell Industries in Houston. LyondellBasell roughly doubled the size of its compounding and concentrates business when it acquired A. Schulman Inc. earlier this year.
Guilfoyle cited automotive as a 2018 growth area, with increased sales into the automotive market through exterior parts such as front grilles, as well as soft-touch internal applications.
LyondellBasell also is working to assimilate Schulman's 54 production sites with its own 18 compounding locations. Many market watchers have speculated on the chances of all of those sites staying open.
Guilfoyle declined to comment on specific locations, but he said that his unit “has a lot of integration ahead of us, but we also have platforms for growth.”
He pointed out that LyondellBasell still plans to achieve $150 million in cost synergies from the Schulman acquisition through several steps, including better logistics and procurement.
“We're still working through the plants,” Guilfoyle said. “We need to optimize the footprint. We're looking at LyondellBasell sites as well as Schulman.”
For the Specialty Engineered Materials unit of PolyOne Corp. of Avon Lake, Ohio, transportation has been the top growth segment, Chief Commercial Officer Michael Garratt said. The firm has leveraged its EMI/RFI shielding solutions for advanced driver assist technology, he added.
PolyOne's SEM unit also has seen strong demand outside of automotive for our thermoplastic composite technology, primarily in marine, trucking and off-road vehicles, according to Garratt.
Elsewhere at PolyOne, its Performance Products & Solutions unit — including PVC compounds — has seen “significant growth” in wire and cable, electrical and consumer, unit president Don Wiseman said. This growth has been driven by geographic expansion of manufacturers in these markets and deeper collaboration with key customers, he added.
Mark Crist, PolyOne Color, Additives & Inks unit president, said that, by industry, packaging remains extremely strong for his unit. He explained that's because PolyOne “has a number of sustainability-enabling products that ensure our customers are at the forefront of the recycling and re-use initiatives.”
Crist added that in health care, his unit “has seen excellent growth,” particularly in North America and China, as customers gravitate toward combined colorants and additive packages.
In the first nine months of 2018, PolyOne's Color, Additives & Inks unit racked up impressive sales growth of just over 20 percent. The firm's SEM unit saw sales grow more than 4 percent in the period, while Performance Products & Solutions' sales improved by almost 3 percent.
At Modern Dispersions Inc. in Leominster, Mass., “almost every market is seeing growth,” according to Jan Kozma, sales vice president. The firm is especially strong in custom colored black concentrates for auto interior parts such as door panels and dashboards. But sales also are up in high density polyethylene pipe used in construction and oil and gas exploration, Kozma said.
2018 has been the second consecutive year of very strong growth for Polymer Resources Ltd. of Farmington, Conn., Chief Operating Officer Scott Anderson said. “Our focus is on electronic, noninvasive medical and industrial,” he added. “There's space for a U.S.-based high-service company.”
“We've had a decent year across the board,” said Jean Sirois, strategic planning and acquisitions director at RTP Co. of Winona, Minn. “We've done a lot of expansion ourselves into masterbatch and elastomers for consumer and construction. Automotive is still strong for a lot of polypropylene and nylon.”
For Teknor Apex Co. of Pawtucket, R.I., 2018 “has been very good from a volume standpoint,” according to William Murray, the company's president. “We had some weakness for a little bit there, but things rebounded in October and November. The big difference vs. 2017 has been the big difference in the price of oil, which has increased prices for a lot of our raw materials.”
Overall volume for 2018 also has been strong at Asahi Kasei Plastics of Fowlerville, Mich.
“The year has lived up to expectations because of volume, but the market has been a little dynamic in raw material availability and pricing,” Ramesh Iyer, the company's president and COO, said. “That impacts our margins as prices go up.”
The Plastics Group of America has added new customers in what Executive Vice President Mike Rosenthal has described as “a very busy, very good year for the Woonsocket, R.I.-based firm. TPG in 2018 has seen growth in filled PP materials for recreational vehicles, gun stocks, housewares and other products, he said.
Flexible and rigid packaging has provided growth for Tarrytown, N.Y.-based Ampacet Corp. this year, according to marketing and global business vice president Michael Gaudio. The firm also has seen solid results from blown film and is looking to branch out into pipe and wire and cable, appliances, electronics, he said.
Top growth markets in 2018 for Penn Color of Doylestown, Pa., have been in building and construction and packaging/consumer goods, market development director Bob Kaminski said. Both of those markets have shown growth of more than 10 percent, he added.
Star Plastics of Ravenswood, W. Va, has seen strong results from the electrical, communications and housing markets in 2018, according to President and CEO Doug Ritchie.
Pipe, reprocessed materials and sales to compounders have been top growth areas this year for ATC Plastics of Indianapolis, managing partner Tom Stevning said. The firm has seen double-digit growth in those markets, he added.
“Almost everyone in compounding is busy and optimistic,” said Keith Rodden, a longtime market veteran who opened up his own consulting firm — Compound Solutions LLC of Lebanon, Tenn. — earlier this year. “There's broad economic growth and business in general are good. It's been a solid year.”