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Brentwood Plastics blog

Joel Longstreth

Recent Posts

PE Film Lead Time Factors

Posted by Joel Longstreth on Wed, Apr 24, 2019 @ 06:05 PM

The ship date for custom PE film involves much more than a first-come-first-serve queue.  An extruder who runs their backlog in this fashion or has a salesman running the backlog is not long for this world.  

ancient pyramid art

This is nothing new.  Egyptologists have determined that customers and suppliers have been at loggerheads for thousands of years. 

The primary consideration in setting up a backlog is minimizing scrap.  The scheduler's agenda is to consolidate a sequence of films made out of the same PE resin as long as possible to avoid transition scrap.  With resin cost at about 75 cents per pound, every pound of scrap is really about $ 1.00 lost factoring in labor, electricity and overhead. 

This is crucial to survival in coextrusion.  Complex 7 and 9 layer films can literally take all day to set up. 

A medium scale extrusion line puts out about 500 pounds an hour.  What would you do ?

It's best practices to have some leeway in ship dates.  We promise our orders for "week of _____ ".  A smart play is to promise a Thursday ship date.  4 out of 5 chance it will ship early or on the date.  1 in 5 chance it will be a day late and so what ?  only a day late. 

It's also best practices to have a few dummy orders in the backlog to both act as a cushion for breakdowns and allow for opportunities.  If an order comes in with a ship date 3 to 4 weeks out for a resin running today, it makes common sense to move it up in the queue to avoid setup scrap instead of running it as a stand-alone 3 weeks later.

Distant secondary considerations are width and thickness changes ( there's the central theme of avoiding scrap again ) followed by pigmentation.  Cleaning out after colors is time consuming and messy.  The line must be shut down, purged, what is called the screen pack / breaker plate must be changed.  The ordeal is followed by an expensive, frustrating waiting game while the remnants of the color clear out.  

Back in the day, we had a shrewd customer who went out of his way to pay his bills every Saturday.  A check for all invoices in the week would show up like clockwork on Monday morning.  Why ?  To tempt the film extruder to deviate from fundamental priorities.

Of course, there are a few justifiable exceptions.  Re-work of returned or defective product or doing an occasional favor for a good customer who is out of film and shut down.  

So now you know why:

Coextruded films have such extended lead times

shrink films have such a wide variation in MD / TD shrink ratios
( the order goes on the machine that needs work )

pigmented films have longer lead times

Are you wondering where is our proof that first-in-first-out doesn't work ?  That's easy.  The outfit we sold out to in 1984 ran orders in the sequence received.  It took them 3 years to declare bankruptcy.

 

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Topics: LDPE film, poly film, polyethylene film

" Gen 3 " Plastic Packaging

Posted by Joel Longstreth on Mon, Apr 30, 2018 @ 12:58 PM

Giant retailers and consumer product companies are under tremendous pressure to be perceived as green and sustainable.  They are somewhere between frantic and panic.  Rumor has it the CEO of WalMart wants produce bags to contain partial bioplastics by 2020. Meantime, the major plastic resin producers are doubling down on conventional fossil-fuel based resins.  Sounds like a script straight out of  The Innovator's Dilemma.

 

Jimmy Durante said "everybody wants ta get inna de act" apparently does not apply here.  Timing is just as important to biodegradablity as it is to comedy. ( Dow divested their interest in Nature Works years ago. ) At the recent NPE show, there were only two new US based exhibitors and they were not from the major resin producers.

Biologiq
a
nd
Danimer Scientific

the rest were from China

Jinhui
a
nd

Kangrunjie  ( can't link to their site )

 

Gen 1 " is defined as plastics derived from fossil fuels.

"Gen 2" is plastic derived from agricultural sources or "biopolymers ".

Nobody knows what " Gen 3 " will look like.  Maybe a hybrid ?   The first forays into Gen 2 did not catch on initially because a) consumers will not pay a green premium and b) timing.  Bags put on the shelf in May fell apart in stores by July.  Large food companies have seen what ethanol has done to raw material costs.  If plastic packaging made from agricultural sources crowds out arable land, food costs will skyrocket.  

Another aspect to consider is the involvement of the FTC.  They are finally cracking down on ostensibly biodegradable plastics, or what we call " additive cowboys ".  

 

It's all about perception.  Anything derived from fossil fuels is perceived as inherently evil and made from a source which is not sustainable.  Braskem has done a fabulous job marketing their "green" polyethylene and polypropylene made from sugar cane.  They get a premium and won't talk to you unless your volume is 1,000 metric tonnes annual - take or pay.  These resins do not biodegrade any faster than petroleum-based plastic.  Braskem is putting on a billion pounds annual capacity in La Porte, TX.  The feedstock ?  Fossil fuel natural gas.

With painstakingly politically correct word choice, Lego announced their selection of " green " plastic.  

There are two approaches to a quick fix.  Either "greenwash" ( defined as no change, spin only ) or make hasty changes out of fear of social media.  Notice how much emphasis is put on what a product does not contain these days ?

Bisphenol A is an excellent case study.   " BPA free" is an insult.  Only polycarbonate and PVC use it as a catalyst.  There are trace amounts in the final product.    If your product is made with any other resin, just say        " BPA free" and voila !   You take advantage of the consumer's fear and lack of understanding.which may be just enough to stimulate an impulse purchase.

Sometimes the alternative to the vilified material is worse.  Those who reacted to NGO's clamor for a BPA ban by substituting BPS and other materials were the biggest losers.  In retrospect they look impetuous.  The quiet epilogue: BPA's recent clean bill of health despite being put on California's prop 65 list and the EU's possible ban.  Did the NGO's give a public apology ?   A "never mind" a la Emily Latilla ?

 

Of course not.  The disingenuous virtue signaling malcontents just move on to another faux outrage cause.

The latest angle is apparently a hybrid of fossil fuels and potato starch from a company called Biologiq.  They offer both compostable biopolymers and combo fossil fuel resin / biopolymers.  The hybrid is chasing arrow #7, or "other" which makes it is not recyclable with other polymers.  They say the time is right.  The CEO of Walmart wants all their potato and apple bags converted to Biologiq yesterday. 

Let's look at how this could play out.  For starters, well-meaning consumers will recycle the potato resin bags with the other bags at the store entrance resulting in contamination.   If it takes off, Biologiq will need more than the by-products of potato chips.  What do you think would happen next ?  If you said, "potato prices will increase", go to the head of the class.  For now, the claim of "eco friendly" is not on the FTC's radar.  If the FTC wants a more precise definition of "eco friendly" it's going to be a problem. 

H. L. Mencken said " for every complex problem there is an answer that is clear, simple and wrong".  

To make an informed decision about conventional or biopolymers, click on the purple box on this page.

 

 

 

 

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Topics: eco friendly plastic,, sustainable packaging,

Plastic Shortages

Posted by Joel Longstreth on Wed, Sep 06, 2017 @ 03:44 PM

Part of Harvey's aftermath will be a shortage of plastics.  The general public cannot see it yet.  Many plastic processors and especially their customers are in denial.  Many large processors have shut down and sent their employees home.  For us old timers, recent events conjure up shortages of 1973 - 1974, 1998 and 2005.

 

 

 

The irony is that black plastic trash bags are badly needed in Houston now.  

The following is a recap of causes and outcomes of the previous shortages.

First, let's review the definition of a shortage.  A shortage is simply not enough of a commodity available at the price the market wants to pay.  Simultaneous to the oil embargo, there was a shortage of beef.  Vegetarians were not particularly concerned.

 

 

 

                                                  1973 - 1974


The plastic industry was a teenager. 6 years earlier, Dustin Hoffman's character Benjamin Braddock got the famous career advice -  plastics !   Resin was made either by chemical companies who were not basic in feedstocks or by a few petrochemical companies.  The chemical companies bought ethylene and propylene on the "spot" market.  When the oil embargo hit and monomers were in short supply, guess who got first option on ethylene and propylene monomer?

Plastic processors went on allocation based on historical purchases.  List price for polyethylene was in the 15 cent per pound range.  When Nixon instituted wage and price controls, people got creative.  Suddenly there was a plethora of material available in the 50 to 60 cent range.  It was labelled "off-spec".  One legacy of the big one:  no more "list" prices for resin.  There was resin, but not much for 15 cents a pound.  

During the roughly 16 months of the shortage, pricing was hour by hour.  The phrase "prevailing price at time of shipment" was added to the terms and conditions of sale.  Look closely in the fine print of an old plastic processor 's terms and conditions and you will probably see it.  

The shortage pricing collapsed in a matter of days.  Many plastic manufacturers reinvested their windfall profits in more capital equipment thinking the party would go on.  Instead, it lead to a glut of overcapacity.

1988

was short lived.   Processors on allocation quietly exported their excess resin to maintain their allocation. The resin companies figured out they were better off dividing the fishes and loaves among their smaller customers for higher margin than unloading in bulk to large customers at rock bottom prices.  Ever since, credit managers have had more sway.

2005

was the aftermath of Katrina and Rita, often referred to as "Katrita".  Natural gas spiked to an all-time high of $ 15.  Search volume for "price of plastic" also spiked.  Buyers who were not around for 1973 / 74 simply could not believe the price for a cheap commodity could go up that fast.  The lasting effect of Katrita was agreement upon the CDI as a basis for price adjustment.  The other lasting effect has been discipline.  There was major bloodletting at the resin companies in 2006.  Ever since, the resin producers have shown remarkable discipline. Now it's no forecast, no resin.  They no longer just make resin for it's own sake. 

 

Skip ahead to present day.  The initial shock of Harvey has worn off.  Now customers want to know when they will get resin and when.  What is reminiscent about 1988 is smaller processors are getting better access to resin than large volume processors.  Smaller processors defined as less than roughly 25,000,000 pound per year usage have been relegated to buying through prime distributors.  The large volume users are calling distributors with orders for multiple railcars.  They are perplexed when their orders are respectfully declined due to overriding concerns about keeping long-term smaller customers stocked with material.  Several large plants have simply sent their people home.

There are three components to producing resin - monomer, polymerization and transport.  The monomer and polymerization bits are coming back quickly.  The transport part is the crux of the equation.  There is an embargo on rail traffic to most of Houston.  Anyone who has dealt with railroads knows they are not going to put equipment on tracks until there is at least 105% certainty that the tracks are intact. 

Plastic processors simply do not know if they will get resin, when, how much or what the replacement cost will be.
Many are reluctant to snap up resin because they are either in denial or they still remember getting burned back in October of 2008 when resin prices cratered 30% in a few days.  
The "prevailing price" lingo won't fly today.  The good news is there is plenty of capacity ready to fill the void.  If past is prologue, the Harvey shortage will end with a whimper.

Harvey's aftermath is a slow-motion catastrophe.  Volume buyers of finished product are in denial.  Behind the scenes, volume processors have resigned themselves to being out of some grades and shut down by November. The conversations between WalMart buyers and their suppliers are going to be interesting.  

Processors and their customers who eagerly anticipate running reverse auctions when 18 billion pounds of capacity comes on stream are going to be disappointed.  Their is plenty of worldwide demand to take up the slack and resin companies are disciplined about forecasting and scheduling.

Question: If polyethylene needs to be rationed, what items should be priority?

Who should decide?

 

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Topics: harvey plastic, plastic shortage, price for plastic

Polyethylene Price Increases after Harvey

Posted by Joel Longstreth on Fri, Sep 01, 2017 @ 03:42 PM

Replacement costs are uncertain in Harvey's aftermath.

chevronsign-1.jpgmurph449.jpgmurph313.jpg

Scroll down for updates

Predictions range from complacent denial from buyers of finished parts ( "it might go up" ) to "scary" from a decades - old plastics credit reporting agency.  

 

It's a fluid situation which is not moving by the hour like back in 1973 - 74.  In the wake of hurricanes Katrina and Rita in 2005, the CDI became the agreed-upon benchmark for polyethylene prices.  At this writing, the nominated three cent increase for August is generally accepted with a few exceptions.  The supply chain dominoes haven't all fallen yet, so there is no sense of panic or urgency among the smaller

 processors. It's like the force majeure letters never existed. 

Large volume buyers of finished goods are fighting the August 3 cent increase tooth and nail.  What is happening does not fit their Walmartized reality.  The large volume extruders have laid  people off and they are scrounging for resin.  Dow's second letter announces a second price increase, but fails to mention allocation.  Customers are asking us for documentation because it is difficult to pass price increases along these days.

Herewith is a compilation of letters and updates we have received in Harvey's aftermath.  

Harveypriceincreaseletters

 

 
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Topics: PE resin price, price for polyethylene, polyethylene price,

Packaging: Leading Economic Indicator

Posted by Joel Longstreth on Tue, May 30, 2017 @ 04:32 PM

Many manufacturers were slow in Q1 of 2017, especially us.  It was difficult to square the booming stock market with what us groundlings were experiencing.

 

The " Trump Bump" was more like the Trump slump.  I asked a friend who is an investment banker about the disparity.  His answer was simple.  He said that the money supply is finding it's level with traders and not capex.

Anyone who has lived in packaging has sensed upticks and downturns before they become mainstream news. Back in 2007, we were beginning to wonder if people needed basic cotidien staple items.

The chart bears out what was weird about Q4 of 2016.  During the first week of October, things went quiet after a busy September.  Informal polling indicated the reason was the uncertainty of the election.  The resin companies said they felt the slump back in August.  December which is usually the doldrums was strong as Decembers go.

So what does the current data portend ?  Construction, junk food and staples such as rice are in good shape.  
Other sectors seem to be clawing their way back to normal.  Order quantities are smaller and no lead time. 

It's unlikely that hedge fund managers will ever deign to do research by finding out what's going on in fly-over country.

 

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Topics: economic indicators

PE Resin in the Age of Madmen

Posted by Joel Longstreth on Tue, Jan 17, 2017 @ 06:10 PM

While spring cleaning, we found a cache of 1960's era letters from Union Carbide.  

       

 

 

wise-guys.jpg

The letters were from big shot execs in the mid-town Manhattan offices.  All were perfectly individually typed with no errors ( whiteout probably did not yet exist ).   While Don Draper was working on ads for mass marketing, the senior execs were incredibly creative by tying in first day of issue stamps to their new resins for the narrow nascent blown film industry.

Of course there were many things nostalgic and laughable - six cent stamps, new applications such as shrink film, juice packaging, frozen food packaging.  Recycling ?  Re-what ?  Linear Low Density was over a decade in the future.  In the First Man on the Moon issue, they bragged about their two billion pounds of capacity.  They went to great lengths to show literally how far their resin would stretch - to the moon and back many times. There is at least 35 billion pounds of PE capacity coming on stream in the US in the next few years.    

In the late 50's the commercial feasibility of blown film was uncertain.  Today there are over 27,000 known blown film shops.

Reminds me of when our founder used to line up his three martini lunches on successive days when he worked for USI Chemicals.

 

How times have changed.  

Enjoy the gallery.  ( Click the enlarge.jpg below the slide show for full screen )  Who knows ?  Maybe the collection will appraise at $ 5 at the Antiques Road Show in the year 2100.

 

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Topics: LDPE resins

Designing for Recycling and Sustainability

Posted by Joel Longstreth on Thu, Jan 05, 2017 @ 06:07 PM

Cradle-to-Cradle, Recyclability, Sustainability and reclamation have historically been low priorities in design considerations.  The biggest obstacle to these goals is dissimilar materials in the same product.  Just as form follows function, selection of raw materials teamed up to do a job is determined by the properties raw materials can deliver.

 

Recycle Across America correctly attributes the recycling collapse and crisis to contamination.  

"... the collapse of recycling is primarily due to high contamination levels in the recycling stream.  Contamination cripples the economics of recycling.  The process to remove contamination reduces profitability, driving up the cost of recyclables, thereby preventing many manufacturers from reusing recycled materials. As a result, they continue to deplete finite resources at alarming levels." 

Note how economic sustainability dovetails with environmental sustainability.  The recycling business is tough at best because prices drop when there are more recycled materials are on the market.  There is not enough margin to absorb the additional cost of sorting.

It's not complicated.  The more dissimilar materials are contained in a product, the more difficult it is to
recycle for practical purposes.  If a product contains more than one polymer, it should be labeled a resin identification code ( or RIC for short ) symbol 7.

recycle7.png

Sweden has it down to a fine art.  They claim only 4% of their discards end up in the landfill. 

 

So just make the product out of the same resin.  Simple solution, right ?
Problem: one resin can't deliver all the attributes needed

Often the resolution to a problem is meeting halfway.  This mailing envelope solves the debate over paper or plastic.  Instead of an all polyethylene #4 recyclable envelope, it is made from both polyethylene bubble pack and kraft paper.  

pregis.jpg

Proponents of plastic often ask why cut down a new tree when you can use an old dinosaur ?  The rejoinder is usually "you're still usin' fossil fuels, man".  This brilliant example of an unrecyclable #7 satisfies all demographics.  Proof that it satisfies the demands of the consumer for green products is it's ubiquitous presence in UPS stores.  

A cotidien example of several resins in one product is a soft drink cup with a straw and lid.  It has three different polymers with three different job descriptions:  The stiff and pliable straw is polypropylene, the rigid lid is polystyrene and the paper is coated with low density polyethylene.  One resin is not versatile enough to do all three jobs.

 

 

At Sustpack2016, the common threads of marathon presentations by large companies were source reduction and landfill reduction.  They have all made great initial strides mainly through reduction of corrugated packaging. Just my opinion - it will be more difficult to maintain the same rate of progress after another few years.  Corrugated recycles allright.  It also cuts down trees and uses oodles of fossil fuels.  Chemical runoff is minimal compared to decades ago.  

 

Consumers feel best about recycled content to assuage their irrational conditioned consumer guilt.  Using less, or source reduction, is the most incontrovertible way to go green.  But it's too abstract and not fungible.  

It's an issue for not just the flexible packaging industry.  The green building culture is scrutinizing materials with emphasis on cradle-to-cradle. There are several recent success stories such as the Long Center for performing arts in Austin, TX.

 

This is not new.  Humans have been recycling construction materials for millenia with an efficiency motive. Construction waste is one of the major contributors to landfill, but that's another conversation.  Here is a great infographic about recycling across the globe and in recent U S history.

Like everybody, the meeting and convention industry is under pressure to show they are going green.  
bins.jpgconstructiongarbage.jpgLVrecycle.jpg

Recently, it has become common practice to place a recycling dumpster next to the dumpster for non-recyclables.  What the convention industry used to pitch is turning out to be a massive trove of raw materials.
Here's the bargain: the recycler gets the cast-offs for free.  His cost of goods is the cost of hauling and sorting.

A big problem for both conventions and builders alike is carpet.  Carpet can have several components which makes it hard to sort.  Despite this obstacle, carpet recycling is catching on.  Cleaning and re-shipping carpet is a major headache for convention contractors ( the people who put up the booths, signage and install the
carpet ).  For example - Freeman the industry leader, has at any given moment 300,000 square yards of carpet in a cook's pot being cleaned and recycled.  The trend is toward nonwoven single-use polypropylene #5 used one time and sent to the recycler.  There will be a tipping point if the price drops to where the cost is less than transport + cleaning + transport again. 

The bad news is that even if products could be made with only one resin, it would not be a solution.  The major obstacle to recycling is indifference from the general public.  Proof is the low recycling rate of water bottles.  They are made from polyethylene terephthalate ( PET ) #1.  PET is the only commodity resin FDA approved for 
food contact and medical after repolymerization.  The recycling rate has dropped to 30.1 %.  More than 1 in 3 water bottles are discarded despite the efforts from giants like Coca Cola to make recycling easy.

Could it possibly be that consumers just aren't that concerned about the environment and only pay lip service ? 

It's more fun to blame and vilify evil corporations.

For more information on the 7 basic commodity resin identification codes, watch this short video.

 

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Topics: plastics recycling,, sustainability, resin identification codes, RIC

Multilayer Packaging Lexicon

Posted by Joel Longstreth on Mon, Dec 12, 2016 @ 04:43 PM

Humans like to communicate in acronyms, abbreviations and inside lingo.   After I set up an appointment for a medical test, I got a call back.  They said I didn't have an oth.  " What's an oth ?"  " An authorization, sir "   Brings to mind the scene in " The Heat"

The flexible packaging business is no exception.  The written descriptions of multilayer packaging structures can be confusing.  Here are some plain explanations of commonly encountered cryptic abbreviations followed by some examples:

/  designates a dividing line between two layers
adh.  short for "adhesive"
BOPP  biaxially oriented polypropylene
COPP  copolymer polypropylene
CPP  cast polypropylene
EAA  ethylene acrylic acid
EVA  or VA  ethylene vinyl acetate ( should specify % of VA copolymer )
EVOH  ethylene vinyl alcohol  natural habitat is in the core layer of coex for barrier
ga.   gauge  one mil = 100 " gauge"  manufacturers chisel thickness, so ".94 ga." is as close to 1 mil as you'll find for PET; 
       "48 ga." is popular in PP

foil   foil
HDPE  High Density Polyethylene
LDPE  Low Density Polyethylene
LLDPE  Linear Low Density Polyethylene
MDPE  Medium Density Polyethylene
METOPP  Metallized Oriented Polypropylene
METPET  Metallized Polyester
NYL    nylon
PA  nylon
PE  polyethylene
PET  polyester ( not to be confused with polyethylene terephthalate which has the same abbreviation )
PPFP  paper poly foil poly
poly  polyethylene
PP  polypropylene
prt   print
PVDC  polyvinylidene dichloride ( a/k/a Saran )
surlyn    Surlyn
tie    tie layer ( always found in coextrustions, never in laminations )
wht  white

Thus, a callout like this:

PE / adh. / METPET/ adh / CPP

would in English mean:  LDPE sealant layer ( the PE layer is always the sealant layer ) laminated to metallized polyester laminated to cast polypropylene.

There are a zillion possible combinations.  If you run into one you can't translate, call us.

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Topics: coextruded film, multilayer film, coextruded, coextruded plastic, laminated films

Developing Custom Plastic Films

Posted by Joel Longstreth on Mon, Sep 26, 2016 @ 12:11 PM

Product development is a rough, bumpy ride with no certain outcome.

 

It's always a bracketing process which requires many iterations no matter how methodical the approach.
Sir James Dyson thrives on failure.  His vacuum cleaner has been through 5,126 versions.  Well tested products often result in recalls.  

 

What replaces a bad idea ?  A better one, of course.  De Havillands' culture was that if something
didn't look right, it probably wasn't right.  The reason airplane windows are rounded is that the Comet broke up in flight because the square windows cracked in the corners.



Thomas Edison famously went through 940 filament candidates before he hit on tungsten.  In retrospect
he was more alchemistic than methodical.   Failures did not discourage him.  Instead, he viewed 
failures as data about what did not work.

 

Today's short attention span is not conducive to perseverance.  By the third iteration, many prospective customers figure we are guessing and dismiss us as incompetent after we are unsuccessful at solving a problem nobody else has been able to solve.  Group think kicks in when the big boss gets the super compressed zip file executive thumbnail version.  Plastic film is a lot simpler than molding, so we rarely need more than three attempts and there are no molds.  

Unlike automotive, our customer's plant is the proving ground and beta test site.

 

We can't run tests at our facility before presenting a version. With each failed iteration, our credibility erodes.

Suppliers who initially appear discouraging or negative are often the best to work with in the long haul.  These seasoned veterans already know what will work and what won't.  Contrast this approach with a company whose positive-minded sales rep makes promises the company can't deliver.  Like so many things in life, it's not complicated entering relationships; it's extricating oneself which is difficult.  In injection molding, molds are the ties that bind.  Sadly, the empty promises often lead to ugly lawsuits.

It's intuitive that the more complex the problem, more perseverance and revisions are required.   After nearly sixty years, you might think launches would be old hat for rocket scientists.  Everybody except NASA has not given up.  Elon Musk said the last disaster was Space-X's most complex undertaking.

 

" Design creep" is a plot twist which always sends the process into overtime.  Design creep is introduced in two ways.  Most often, it's after the first or second iteration despite our efforts to capture all the performance parameters up front ( see contact us tab ).  

                                             "Oh, we forgot to tell you we need the film to ______________ ".
For example, we just found out that a film needs to unroll easily after being stored in a desert warehouse all summer.  After the third iteration.  Had this requirement been disclosed in the beginning, we could have saved a lot of time, money and plastic.  Design creep is also introduced when marketing gets into the act and imposes new features often without thinking through the ramifications.  The scary bit is this is America; one must always be thinking of how one could get sued despite best intentions.

It's important to know if the project is ready for prime time.  In the words of one of my former bosses, " you need to be realistic about whether you are in the development stage or in the commercial phase."  Disasters often occur with wishful thinking when on the cusp of going from development to commercial.  And in the words of another of my former bosses, " there's only one thing worse than not having a product - it's having a product that's not fully baked." 

Much has been written about inventions, the tenuous path to commercialization and accidental discoveries. What we do is relatively simple.  If you want us to solve a problem for you, just tell us what you want.  The long form on the contact us page is not best practice for capturing leads.  In lieu of finding out the performance parameters over the course of literally months, we are trying to capture all the performance parameters up front.

 

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Topics: custom PE film, custom LDPE film

PE Film Industry Consolidation ?

Posted by Joel Longstreth on Wed, Sep 14, 2016 @ 03:19 PM

Like any industry which matures, there is first a dynamic growth curve followed by the inevitable consolidation wave.  The blown PE film business is both consolidating and contracting.


By the 1920's, there was a proliferation of automobile manufacturers in the thousands.  Aerospace didn't have
thousands of airplane manufacturers, but maybe hundreds.  An early map of the Kimberley mine was complex
with stakes by numerous colorful characters.  Where are they now ?  

Back in the 1950's, the commercial viability of blown PE film was uncertain.  Before our founder Joe Longstreth
established Brentwood Plastics in 1961, he sold PE resin by setting up companies from scratch to make LDPE film and take away market share from old fashioned true cellophane.  

Cut to present day.  The number of PE film outfits worldwide is certainly in the thousands.  "Turn-Key" film lines are ubiquitous.  Back in the early days, we bought the components separately and made some of the parts ourselves.  My grandfather designed a surface winder for narrow width tubing from scratch which is still in service.

In the US, the consolidation phase has been going on for decades at every strata.  The largest instituional trash can liner manufacturer is actually an amalgamation of formerly regional players.  You can't argue with the success of Sigma group's strategy of expansion by acquisition of financially distressed extruders.  By contrast, the largest manufacturer of private-label trash bags is Poly-America who has grown dramatically mostly by organic growth. 

Berry Plastics' mega merger with AEP is the latest chapter in consolidation of companies with roots going back to the 1970's.  Armin Kaufman, founder of Armin Films sold out to Tyco who unloaded their film maker portfolio to Berry in 2005. Berry merged with another large bankrupt player who had gone bankrupt in 2009 - Pliant.  

Where is Armin Kaufman now ?  In Hillside, NJ where he founded Hillside Plastics with the proceeds from the Tyco sale in direct competition.

To take stock, we compiled a list of US operations which include polyethylene blown film extrusion with apologies to anyone we overlooked ( call us if you want to be included ).  There was no clear trend.  A lot of old names were gone either due to buyouts or going out of business ( this is a capital-intensive business; the tripling of resin cost since the mid 90's has weeded out players with inadequate working capital ).  Many have vertically integrated blown film in their operations.  Some niche players were unchanged, some have developed into giants. Next Generation films is an extreme example.

We have been there / done that selling out thing back in 1984, probably not going back there for a while.  We believe there is enough demand for an old school, handcrafted monolayer operation.

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Topics: pe film

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