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Plastics: Relying on Innovation to Ride Out the Recession

The collapse of the auto industry has hit the plastics industry hard. But new medical products and greener plastics are keeping the industry moving forward.

June/July 09
Plastic piping is expected to be a growth market as infrastructure projects expand
Plastic piping is expected to be a growth market as infrastructure projects expand
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Packaging Products
Packaging continues to be strong for the plastics industry and has overall been less prone to "offshore" manufacturing threats than other markets due to the fact that most OEMs want their packaging suppliers close; because of the light weight of the products, shipping long distances by air isn't cost effective and not something that OEMs are inclined to do.

Packaging for food products is strong as well. Point-of-purchasing for food take-out remains a good bet in plastic packaging. Sabert Corporation, headquartered in Sayerville, New Jersey, celebrated the grand opening of its new, 250,000-square-foot manufacturing facility in Hillview, Kentucky, near Louisville. The company thermoforms disposable plastic food packaging such as deli take-out packaging, food service trays, utensils, and other food packaging solutions. Sabert made an initial investment of $35 million in the plant which is on a 72-acre site, and was granted $2 million in tax benefits by the Kentucky Economic Development Finance Authority. The new plant is expected to employ 100 people.

Green packaging continues to hover on the fringes, and while it remains primarily a niche product, U.S. demand for green packaging is projected to increase 3.4 percent annually to $43.9 billion in 2013, using 59 billion pounds of material, according to The Freedonia Group. The fastest gains are anticipated for biodegradable plastic packaging and plastic recycled content packaging. Biodegradable plastic packaging is forecast to climb nearly 13 percent per year through 2013, driven by increased price competitiveness with conventional resins, rapidly expanding capacity, and lower pricing volatility than petroleum-based plastic packaging materials.

Packaging is a key component of medical products as well, with demand for sterile medical packaging projected to climb 6.1 percent per year to $6.5 billion in 2012, representing nearly 37 billion units, per The Freedonia Group. Again, growth will be fueled by the shift to an older demographic, and upward trends in patient activity will broaden the overall use of sterile medical products, impacting favorably on demand for related packaging.

A decline in surgical procedures and advances in minimally invasive surgical techniques will reduce demand somewhat in those areas, but the growing role of specialized outpatient facilities in providing healthcare services will boost opportunities for sterile medical products and related packaging such as thermoformed trays, pouches, bottles, sterilization wrap, blister and clamshell packs, and IV and blood containers.

The Freedonia Group says the fastest gains are expected in pharmaceutical and biological applications delivered via injection or inhalation, supporting above-average gains for prefillable syringes, vials and ampules, prefillable inhalers and closures. Demand will also be aided by widening preferences for safe, unit-dose delivery systems.

Building and Construction
Green issues are also on the forefront of the building and construction industry. While the housing market has been in a slump, makers of building and construction products haven't slowed their pace in developing "green" alternative materials, making use of recycled plastics as well as developing new products using a variety polymers.

Interior applications for plastics are many and varied, some of which might surprise home buyers. For example, for the third year in a row, Fypon, a leading manufacturer of urethane and PVC millwork products, has achieved three separate number-one brand rankings in the 2009 Brand Use Study sponsored by Builder magazine. The next time you go into a home with soaring columns, beautiful crown molding and other decorative millwork, you might be surprised to learn it's PVC or urethane.

Products have moved well beyond vinyl siding, which is available in new and improved products, into decking, fencing, railing, and roofing materials in a variety of styles and colors. Decking has long been a primary end use for recycled plastics and wood-plastic composites. Trex, headquartered in Winchester, Virginia, was an early entrant into the plastic decking market, coming out with its product 16 years ago. Today, Trex is recognized for products in decking, railing, fencing, and trim for low-maintenance outdoor applications.

According to The Freedonia Group, U.S. demand for alternative decking materials, specifically wood-plastic composite decking, is forecast to rise 9.5 percent annually to 700 million lineal feet, while demand for plastic and other decking is projected to advance 9.7 percent annually to 135 million lineal feet in 2013. That far outpaces demand for wood decking, which is projected to advance less that 1 percent per year through 2013. Consumers like alternative decking materials because of their long lifespans, minimal maintenance requirements, and imperviousness to degradation caused by general wear and tear and long-term exposure to moisture. In addition to performance characteristics, the new products on the market closely resemble natural wood, can be cut like wood decking, and are environmentally friendly in their use of recycled plastics in production.

In siding, TechWood North America of Greenwood, South Carolina, extrudes a wood-plastic composite siding using a mix of 75 percent long-wood fibers and 25 percent virgin polypropylene. CertainTeed of Valley Forge, Pennsylvania, recently introduced its Cedar Impressions Naturals plastic shake siding that features the look of cedar-treated wood with a semi-transparent stain but is in fact injection molded from polypropylene.
Roofing has become a huge market for polymer materials, and a number of companies have jumped into this market with various styles and colors of polymer roofing products. Bayer MaterialScience's Ce-DUR is molded from Baydur 630 rigid polyurethane foam. EcoStar, a division of Carlisle Construction Materials in Carlisle, Pennsylvania, offers injection molded roofing shingles with an 80 percent recycled compound that includes both thermoplastics and rubber. DaVinci Roofscapes of Kansas City, Kansas, recently announced it supplied the company's new line of DaVinci EcoBlend roofing tiles for the 4,300-square-foot Green Life Smart Life home project in Narragansett, Rhode Island.

Buying American, Rebuilding America
If the state of the U.S. economy has done anything, it's made the "Made in the USA" label much more popular. More and more manufacturers and retailers are using U.S-manufactured products as a hook for attracting buyers. Additionally, the cost gap between products made in overseas low-cost countries such as China and made in the U.S. has closed significantly over the past few years, making it more cost-viable to produce plastic goods in this country.

JM Eagle, the world's largest manufacturer of large-diameter plastic pipe, plans to be at the forefront of the Obama administration's efforts to rebuild the country's crumbling water infrastructure. The Los Angeles-headquartered company recently announced the introduction of its Eagle Corr PE (Dual Wall) pipe with a corrugated exterior wall and smooth interior wall, to be used in a variety of gravity flow applications, and is ideal for storm sewer systems.

As infrastructure replacement projects grow, pipe promises to be an exceptionally good growth market. The Freedonia Group confirms that large diameter plastic pipe provides optimum growth opportunities, with demand reaching some 50 million feet, nearly one-quarter of demand of all types of pipe, by 2012. Plastic pipe advances will be driven by resin advances such as bimodal polyethylene and molecularly oriented PVC, which will extend the pressure resistance and other properties of large diameter plastic pipe. The best opportunities will exist for large diameter PVC pipe. 

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