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February 08, 2023 04:38 PM

A ‘steadily improving' economic forecast from M. Holland

Frank Esposito
Senior Staff Reporter
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    lindy-holland-resnick-main_i.jpg

    Lindy Holland Resnick

    Officials at resin distributor M. Holland Co. have no fear of the future.

    With this in mind, several of these executives at Northbrook, Ill.-based M. Holland recently presented market outlooks for 2023 on the firm's website.

    Regarding the overall economy, odds in 2023 "favor an economic soft landing as opposed to a recession," according to Dwight Morgan, executive vice president of corporate development. "We can expect steadily improving demand for the plastics industry as businesses work through excess inventories accumulated as a hedge against supply chain disruptions."

    Morgan also said that resin supplies "should be plentiful" compared with the past two years, since new polyethylene and polypropylene capacity in the U.S. and China should increase both domestic and export supply.

    In the packaging market, sustainability "continues to dominate the conversation," according to Market Manager Lindy Holland Resnick. Worldwide brands "are committed to sustainable materials in their packaging and are designing for recyclability or a better answer in waste management," she added.

    For the automotive market, electrification "is the most transformative technology we have seen in recent years," Global Director Matt Zessin said. "The push and presence of electric vehicles [EVs] is not just a trend but an enduring part of the automotive fold going forward.

    "New EV manufacturers are entering the market as recent government incentives have increased consumer demand," he added. "As EV production continues, so will sustainable material development and innovation."

    3D Printing Market Manager Carlos Aponte said that process and material innovation "have made 3D printing a viable alternative for full production applications, allowing fast prototyping to extend beyond just form and fit evaluations."

    Aponte

    "The expanded capabilities of new additive manufacturing applications will benefit the plastics market in multiple ways," he added. "It makes 3D printing a cost-competitive option that manufacturers are incorporating more broadly into their operations across the entire manufacturing process."

    In 2022, resin, additive and pigment shortages hindered the color and compounding space, according to Market Manager Scott Arnold. He added that low-margin molders "are struggling to find new compounding sources" as compounders make a long-term play for bigger business opportunities and cut back on sales and support functions.

    Heading into 2023, material shortages are less problematic than they have been in recent months, Arnold said.

    "In 2023, I expect customers to tighten their belts further to conserve cash due to recessionary fears and work to unload accumulated inventory," he added. "Dual-sourcing resin will remain an important backup plan for producers."

    In electrical/electronics, Aponte said that recent legislation promoting electric vehicles "is increasing production and driving a host of new startups." He added that efforts to reshore and deglobalize supply chains "have loosened the Asian stronghold on electrical manufacturing."

    For health care markets, near-shoring of molds and manufacturing plants, qualifying secondary resins and taking inventory positions are a few ways that the medical industry is attempting to remove supply chain risk going forward, according to Global Manager Josh Blackmore.

    "Managing price and volume volatility will be a full-time job in 2023, but it will be the year we can get back to thinking about the future and creating new, next-level medical devices," he added.

    Rotational Molding Product Manager Bill Christian said that economic conditions in 2022 led rotational molders to reevaluate their business, and many eliminated less profitable and more complex orders.

    "OEMs that were displaced by those changes have opened new manufacturing facilities causing increased pressure on machine and equipment suppliers," he added.

    For sustainability, collaboration between nontraditional partners will be necessary to reduce greenhouse gases, landfill contributions, incineration and plastic pollution, Market Manager Debbie Prenatt said. "It's critical for businesses and processors to know the sustainability goals of their customers or OEMs and align with them accordingly."

    According to Wire and Cable Director Todd Waddle, that sector is in year three of a 10-year infrastructure investment cycle that focuses on two major industry trends: electrification and digitalization.

    "Costs for clean energy like solar and wind power are coming down as they reach scale," he said. "This increased affordability, combined with tax incentives, a desire for more reliable energy and global sustainability initiatives, are accelerating adoption and positively influencing demand for power cables."

    M. Holland is one of North America's largest resin distributors, selling more than $1.5 billion in materials to more than 4,000 customers annually. The firm serves more than 70 countries across North America, Latin America, Europe, the Middle East and Asia.

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