Mel Ettenson’s Global Plastics News
IAPD is pleased to welcome Mel Ettenson as a guest columnist each month in the IAPD News offering unique content for IAPD members.
THE GLOBAL ECONOMY:
The partial European deal on fiscal curbs won’t ease debt market volatility as several European governments are due to see their credit ratings lowered. Italy is the latest facing this unprecedented move. At present, the United States is benefiting from the focus on Europe’s debt woes as single digit growth of GDP continues into 2012 and is expected to continue. Demand for manufactured products globally resumes, auguring good conditions for our industry. Productivity growth, however, tends to mitigate additional job growth anywhere in the developed world. Expansion should be able to be financed as markets and applications expand with credit loosening and record low interest rates.
ENERGY AND PRICING:
Unrest in the Middle East always introduces uncertainty regarding continuity of supply. Iran’s oil disruption threats cast some doubt about spikes in prices of plastic polymer building blocks. An interesting scenario will be Saudi Arabia’s response to any Iranian oil boycott, considering the existence of SABIC IP in our industry. Our take is continuing inflation in the products we all buy and sell to customers. Strategy should be to resist any aberration and not involve users in this scenario, which would lead to examining metals, whose inflation has abated, as competing for applications. Natural gas and biofuels grow in importance in the U.S. — said to fill 80 percent of U.S. fuel needs by 2016.
Rehau AG invested in a new Czech plant to focus on extrusions for vehicle and housing window applications. Harrington Industrial (2011 sales of $180 million), a unit of Brussel-based Aliaxis Group, bought Pro Tec (Texas-based) in a pipe distribution consolidation move. SABIC and Amerilux International co-create PC sheet for glazing, named Lexapanel — a trend? Bayer plans further expansion in Asia, with expansion of facilities in India, China and Indonesia.
Manufacturers are poised to consolidate further, but new products, applications and markets will dominate growth in 2012, after three years of limited innovation, dictated by financial conditions and limitations.
Distributor trends are numerous and opportunistic. Growing competition with online vendors such as Amazon; recruiting future leaders; managing inventory; pricing in hidden inflationary times; partnering, again, with the right suppliers and non-competing distributors and managing consolidation among both sectors.
About Mel Ettenson
During his 40-plus years in the plastics business, Ettenson always wondered why there wasn't a single, concise, reliable source of information about our industry. THE GLOBAL PLASTICS LETTER is a quick, highly informative plastics newsletter — to the point and timely enough to act on. In just four pages it packs relevant news, information and insights, with a primary focus on sheet, rod, tube and film, plastic semi finished shapes, plastic basic shapes, semi-finished plastics, plastic sheet rod tube and film. The newsletter covers pricing trends, market moves, new and upcoming products and services in the plastics industry.