by Hallie Forcinio, contributing writer, Plastics Business
It’s a new year, but many of the uncertainties of 2020 have followed us into 2021. As we move into February, the COVID-19 pandemic still affects every facet of life.
The new administration in Washington has pledged a multi-front effort to contain the pandemic, grow the economy, reduce racial inequalities and address climate change. These goals are likely to involve shifts in health, trade, immigration, education, taxation and environmental policies. Despite these unknowns, there are positives for business, including the ramp-up of the latest Paycheck Protection Program, the likelihood that interest rates will remain at historic lows and a third stimulus package will be passed.
The outlook for plastics processors and suppliers is encouraging. A study by Grandview Research (San Francisco, California) forecasts a 2.8% growth rate for blow molded products. Extrusion blow molding accounts for the largest share of the market at about 35%, with injection blow molding, stretch blow molding and compound blow molding making up the remainder. Although growth is expected in the automotive and construction markets, the study predicts the strongest performances are likely to be achieved by medical products and packaging, driven in part by the demand for the pharmaceuticals, sanitizers and disinfectants needed to fight the pandemic1.
The injection molded plastics market is poised for even stronger growth. A market study from Grandview Research projects a 5% compound annual growth rate between 2020 and 2027. Demand from automotive, packaging, home appliances, electrical and electronics and medical devices will contribute to the expansion2.
Growth in injection molding includes especially strong, pandemic-generated demand for medical devices, particularly Class III medical devices such as ventilators, respirators and oxygen therapy equipment. As a result, the market for injection molded medical products is forecast to grow at an 8.2% compound annual growth rate between 2020 and 2027, according to another report from Grandview Research3.
MAPP members concur about the positive prospects for 2021. Colors for Plastics (Elk Grove Village, Illinois), a color concentrate supplier serving dozens of markets, saw sales increase in 2020. “We have seen good growth in industrial containers, housewares, home improvement/construction, medical and packaging,” reported Ron Hulbert, vice president of sales at Colors for Plastics. Consolidation in the color concentrates business has left the company, which employs 100 people at three plants in Illinois and South Carolina, one of the few privately-owned firms capable of supplying the three main types of colorant – concentrate, liquid and pre-color.
At PTG Silicones (New Albany, Indiana), sales rose 30% in 2020, with contributions from all of the markets it serves including packaging, healthcare, large appliance, automotive and personal care, according to Brendan Cahill, president.
RapidPurge (Essex, Connecticut), which supplies the automotive, packaging and medical markets, also registered record growth in 2020. Joseph Serell, president and CEO at RapidPurge, attributes the strong performance to changes the company made in its product lineup, marketing and sales in 2019. To continue this robust growth, RapidPurge plans to expand its sales force with three hires in 2021.
Although the COVID-19 pandemic was not a major factor in RapidPurge’s growth in 2020, it did prompt changes in its operations, even though several of the firm’s 10 employees already were working remotely pre-pandemic. Serell reported, “For the production floor, changes were made to minimize contact between employees. Also, we designated most equipment to a single user, and disinfected all surfaces frequently during shifts and cleaned thoroughly between shifts. Visitation was prohibited, and logistics strictly practiced contactless exchanges for freight.”
Foster Corp. (Putnam, Connecticut), which has 150 employees and serves the medical device and specialty markets with custom compounds, implemented similar measures. “During 2020, we adjusted our work policies, allowing people to work remotely when possible,” recalled Larry Acquarulo, founder and CEO. “We followed all of the CDC guidelines, implemented changes to our facilities, increased cleaning and sanitation. All travel was postponed. Our teams worked together to provide creative solutions, and we adapted to distanced interaction to provide the best possible outcome.”
Foster Corp. also worked to overcome supply chain disruption and mitigate increased lead times for incoming materials, shipping and transportation delays, and services affected by a lack of personnel.
Like other MAPP members, Hulbert noted, “Our team has put a tremendous amount of work into addressing the challenges posed by COVID-19. We reacted quickly and proactively . . . to protect our employees, keep our supply chains strong, keep communication lines flowing with customers and keep customers supplied with the products they needed for essential businesses.” As time has passed, he reports, “We have continued to be flexible and adapt.”
Looking at 2021, rising resin prices and tightening resin supply are a concern. “….if the energy policy of the new administration is very aggressive, that will have an impact on resin prices, which affects us all one way or another,” explained Serell.
But the biggest challenge, he said, “is the same as always – uncertainty. Although the economy seems to be rebounding well, there is no certainty that this will continue, especially if unemployment remains high for an extended period.”
Acquarulo agrees uncertainty is the biggest challenge – particularly the inability to accurately forecast when the pandemic will subside. He explained, “The [pandemic] situation directly impacts our people and our medical device business. We intend to proceed with our growth plans cautiously and rely on close communications with our customers to enable us to respond to a surging demand if necessary.”
At PTG Silicones, the challenge will be to maintain its 2020 growth rate. “I don’t know if that is possible,” said Cahill. “We are seeing a slowdown in COVID-19-related orders so we need to figure out how to backfill there.”
Opportunities come in many forms: new products, process improvement; investments in technology, automation, equipment and personnel; movement into new markets; and enhanced communication with customers and suppliers.
RapidPurge and Colors for Plastics are focused on new products. Serell of RapidPurge reported, “We are in the final stages of developing a purge compound that approaches resin color removal in a way that no product currently does. …we will be marketing [this new product] heavily once the beta testing has been completed.”
At Colors for Plastics, the addition of an R&D director who is a seasoned expert in developing liquid colorants has brought industry-leading liquid carrier and liquid formula technology to the company. “… we see good opportunities for liquid color in several areas, polyolefins and polyethylene terephthalate in packaging are one, engineering grade resins in a myriad of markets are [another],” said Hulbert.
Colors for Plastics also is building on communication lessons learned in 2020 as face-to-face visits and tradeshows were canceled. In addition to more frequent communication, Hulbert said, “We are using alternatives like video conferences/webinars to help prospects and customers discover ways to improve their businesses.” In addition, he said, “We have utilized our whole team to communicate on multiple levels to help our customers with what we call ‘Full Spectrum Service,’ which involves helping them be successful in all aspects of their business, not just supplying … color.”
Opportunities at Foster Corp. center primarily on continued process improvement. Acquarulo reported, “In 2020, we had to lean our operations; COVID-19 forced us to do business differently, and with that, we found new ways to function. In 2021, we have the opportunity to be more effective. We have identified areas to be more efficient. We will be investing in new equipment and technologies to improve our services and responses to our customers. We plan to automate practices, implement changes and allocate resources to see a bigger impact. We feel very positive about our future business.”
PTG Silicones also is making investments in equipment as well as personnel and new markets. Cahill said, “Work came in at such a high speed in 2020, it pinpointed areas of weakness and showed us where we need to move. We’re also preparing to enter some new markets that need higher production volumes since we run a highly automated facility.” On the personnel side, the company will continue building on efforts begun in 2019 to put the right people in the right positions. When people and work mesh, the resulting synergy is “magical,” said Cahill, who uses the analogy of a rowing crew that moves the boat much faster when every rower is synchronized. Plans also call for increasing staffing by a person or two.
On the equipment side, MAPP members continue to embrace automation, particularly collaborative robots, which can support social distancing needs and lower headcount to create safer work environments. In addition, robots typically boost efficiency and achieve higher and more consistent output versus traditional manufacturing – particularly on lines that run many different shorter run jobs.
“We will see increased use of collaborative robots especially in injection molding,” predicted Ryan Richey, senior director of accounting and finance, Yaskawa America, Inc., Motoman Robotics Division. The mobile units are easy to program, capable of performing a variety of tasks and easy to move from line to line or machine to machine. This flexibility means one collaborative robot can replace two or three industrial robots in some applications. Richey concluded, “There are fears automation will take away jobs, but that’s really not true. Robots support the people that already are there.” n
- Grandview Research, “Blow Molded Plastics Market Size, Share & Trends Analysis Report By Technology (Extrusion, Injection, Stretch), by Product (Polypropylene, ABS, PE, Polystyrene, PVC, PET), by Application, and Segment Forecasts, 2020 – 2027,” Market Analysis Report, June 2020.
- Grandview Research, “Injection Molded Plastics Market Size, Share & Trends Analysis Report by Raw Material (Polypropylene, ABS, HDPE, Polystyrene), by Application (Packaging, Automotive & Transportation, Electronics, Medical), by Region, and Segment Forecasts, 2020 – 2027,” Market Analysis Report, July 2020.
- Grandview Research, “Medical Injection Molding Market Size, Share & Trends Analysis Report by System (Cold Runner, Hot Runner), by Class (Class 1, 2, 3), by Material (Metal, Plastic), and Segment Forecasts, 2020 – 2027,” Market Analysis Report, Sept. 2020.