Ohio is one of the top plastics producers in the U.S., with over 600 plastics-based manufacturers contained within its borders. A study released in late 2022 further centered the Buckeye State as a plastics production hub, as importing materials from overseas is no longer a bottom-line benefit for most companies.
According to the report from nonprofit Shale Crescent USA — shared in December by JobsOhio — Ohio's energy and transportation advantages have put previous overseas partners like China on the back burner.
Pandemic-driven supply chain snarls, combined with the larger region's abundant natural resources in resin production, illustrate that these goods are cheaper to manufacture locally, the report said.
For decades, manufacturers shifted production abroad — primarily to China — with an eye on cheaper labor costs and improved margins. Increased shipping prices with longer lead times have reversed that course while spotlighting the benefits of shorter supply chains.
Steve Millard, president and CEO of the Greater Akron Chamber, recognized the need for rapid product delivery during the height of COVID.
"People couldn't get gloves, face masks, bottles for sanitizer or the sanitizer itself," said Millard. "The chemical and polymer composition of those products woke people up on how to get it cheaply in big quantities. We knew this would come domestically."
Echoing key findings from the study, Millard pointed to Ohio manufacturers' proximity to the end-to-end industry supply chain, starting with the low-cost natural gas liquids utilized to produce plastic resin. Ohio, West Virginia and Pennsylvania produce over one-third of the country's natural gas supply; compare this to energy-deficient China, where resin is mostly generated from a costly oil-based chemical called naphtha.
The Utica and Marcellus shale formations will keep the region rich in natural gas well into the future, Millard said. Shell's ethane cracker plant along the Ohio River, meanwhile, is expected to ramp up to full production in the second half of the year. Shell officials say the complex will generate 3.5 billion pounds of tiny polyethylene pellets annually.
With shipping costs a significant factor in the overall supply network, Ohio's ability to meet raw material production and finished goods within a day's drive gives the state yet another leg up, said Millard.
"It's stunning when looking at the depths of the supply chain here," Millard said. "From processors to materials to transportation to warehousing, all the pieces have come together, when otherwise you would be moving products across the country."