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Category: Miscellaneous
Volume: 22
Issue: 2
Article No.: 3190

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PLASTIC PERSPECTIVES

The focus in our industry at this writing is the state of the economy - herewith some comments.

Needless to say the last 9 years have caused memories of business cycles to blur, however the cycles are still with us - an economy that continues to "beat yesterday" invariably must slow down and even reverse - we are seeing this in 1Q 2001. The signs have been there since 4Q 2000 - higher oil and natural gas prices cause inflationary pressures on plastics prices, which leads to a slowdown by buyers who no longer face "price as before" but must price compare when faced with an increase presented by the seller. In spite of higher productivity, including some e-commerce shopping and on-line price comparisons through alliances and auctions, the fact remains that we are still engaged in relationship selling and buying with people very much in the equation.

It is well to consider that some economic downturns are worse than others - this looks like one of the good ones. Consider stock markets - even in the low 2000's the Nasdaq is more than twice as high as it was five years ago. If you had been asked at that time whether you' be happy with a doubling in five years, the resounding answer would have been yes. While the Nasdaq is still showing a net gain, despite the bubble burst, government deficits have turned to surpluses, unemployment remains near record lows and inflation is nowhere near its past peaks. Thus we wish to assert some rational exuberance and feel optimistic that the cycle will once again turn up - be ready!

Some of our conversations with leaders in the plastic distribution and fabrication industry have indicated little or no slowdown, although many manufacturers are "a little slow". Optimism should prevail, as well as continually improving productivity and being aware of your place in the supply chain, offering cost savings and value to both supplier and customer.

As proof of cautious optimism, Bayer is betting $860 million to become the world’s largest polycarbonate producer within the next five years. The Germany-based multinational says it will double its Makrolon PC capacities from the present 650,000 tons per year to something approaching 1.3 million tons per year by 2005 when they will have a total of five production centers for Makrolon strategically positioned around the globe. Within the region covered by NAFTA, production at Bayer's Baytown, TX plant will reach 350,000 tons annually by 2005 with additional focus in Asia where they expect double-digit growth for PC. Developed by Bayer in 1953, applications are primarily in: electronics and electrical, lighting, medical, glazing (multiwall, solid, and corrugated sheet), and optical storage(CD's).

An excellent publication for a forward look at the future materials, industries and applications is High Performance Plastics at www.intnews.com. It should be renamed "Plastics Optimism".

Speaking of websites, we have done some research and here is an updated list of those pertinent to our industry. These are still remaining despite the slowdown in the success of e-commerce; it will come although slower than many "experts" (including this one) predicted. It would be well to keep a watch on these and any subsequent ones:

www.plasticlink.comwww.worldwideplastics.com
www.plasticspds.comwww.plasticscommerce.com
www.getplastic.com www.onlyplastic.com
www.dsmepp.comwww.cadillacplastic.com
www.plasticsgrid.comwww.handsonplastic.com (for employee training)
www.polysort.comwww.orderzone.com
www.plastemart.comwww.qplastics.com
www.ineosacrylics.comwww.buyplastics.com
www.shopforplastics.comwww.modernplastics.com

This should be a year for more shakeouts although some of these websites should be viable in 2002, and beyond, as our industry begins to benefit by this highly leveraged communication tool, akin to the development of the telegraph over 100 years ago.

For more information, click on the Author Biography link on this page.

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