Thursday, February 11th, 2016

Four Reasons Why New Duty Drawback Rules Will Benefit U.S. Plastics and Other Manufacturers

The Senate approved a compromise version of the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644) today. The bill would make American manufacturers more competitive globally by streamlining trade flows, reducing paperwork burdens for smaller shipments and, notably, making duty drawback more available to companies of all sizes.

ExportingPhotoTrade

Duty drawback is an oft-overlooked portion of U.S. trade law but it’s a powerful tool, defined as the refund, reduction or waiver of customs duties assessed or collected upon importation of an article or materials which are subsequently exported or destroyed. In English, that translates to, “if the U.S. charges a duty on something you import, but you use that imported item to produce an item that’s eventually exported, the U.S. will refund the duty it originally charged you.”

This is an especially powerful tool for plastics companies, but successfully taking advantage of it can often be too burdensome for many smaller organizations. Here are four reasons why that’s about to change, and why the new duty drawback provisions included in H.R. 644 are good for U.S. plastics.

1. The new statute makes drawback more available to companies of all sizes: successfully claiming drawback often means heavy paperwork; officials must be able to draw a clear line from the goods upon which the duty was first imposed to the exported good they eventually were a part of. Rather than tackle that process, many companies will opt to just pay the duty. The new bill, however, simplifies the process, giving more exporters an opportunity to reduce their costs with drawback.

2. It includes improvements to substitution: Part of drawback for manufacturers is the concept of substitution, which stipulates that when merchandise that’s “commercially interchangeable” with imported merchandise upon which a duty, tax or fee is levied is ultimately exported or destroyed, the exporter can claim drawback on those goods they imported. The issue is that qualifying such goods for drawback to U.S. Customs and Border Protection (CBP) is an extremely onerous, subjective process. The new drawback provisions make the concept of “commercial interchangeability” an objective matter by basing this assessment on where each imported or exported merchandise falls on the globally-accepted Harmonized Tariff Schedule of the U.S., eliminating the need for subjective interpretation on the part of CBP.Bottling Process

3. Shorter time frames: Typically drawback requires rulings and approvals prior to filing claims, but the new statute would eliminate the 6-12 month wait time that usually separates the request for approval for drawback and the date the first claim can be filed. This means companies claiming drawback can get their money quicker.

4. More time to file: Under the new statute, time frames will be simplified so instead of allowing drawback on only imported goods that were exported within three years of importation, companies can expand that time limit to five years. This would take off some of the pressure, and alleviate some of the recordkeeping burden on both CBP and on drawback claimants.

H.R. 644 is a solid bill with lots of pro-export, pro-manufacturing provisions, which is why SPI advocated for it. If the administrative hurdles, confusing time frames and arcane details have kept your company from taking advantage of duty drawback, now might be the time to take a second look.

Wednesday, February 3rd, 2016

A Day of Firsts: SPI Does the Iowa Caucus

By Mark Garrison, Senior Vice President, Membership and Business Development, SPI

This is my first blog—ever. There were a lot of firsts for me on the day of the Iowa caucuses. First time in Des Moines, first time to attend a caucus, first time to attend a presidential candidate’s primary after-party, and the first time I rode in a Bentley. More on the Bentley later.

Photo credit: Gage Skidmore

Photo credit: Gage Skidmore

SPI hosts several regional events throughout the country. All are open (at no cost) to both members and non-members. However, this is one was a little different. Our member host, i2tech, also known as Innovative Injection Technologies, certainly made an event for the ages.  It was unique right from the start. Those of us who were able to come in the night before were treated to a production of “Caucus – The Musical.” Two hours of political fun and hilarity. The actor who played Ronald Blunt (aka Trump), should be nominated for a Tony award.  The funny one-liners came so fast, I honestly can’t remember my favorite one.

Our event hosts, Bob and Josh Janeczko, planned out a very busy caucus day.  We started with a plant tour of the i2tech facility.  I2tech is a custom injection molder, with 31 molding machines.  The largest being a 3300 ton Milacron. Some of their customers include John Deere, Arctic Cat, Dee Zee and Kongsberg. After the tour, Jennifer Jacobs, chief politics reporter for the Des Moines Register (and also, Bob’s daughter), spoke to our group and brought us up to “political speed” on the events that were about to unfold during the caucuses later that evening.

JenniferJacobs_IMG

Jennifer Jacobs, politics reporter for the Des Moines Register, talking to SPI.

After dinner and some networking, we were off to see a caucus event. Most people are accustomed to pulling a lever behind a closed curtain. I wanted to witness a Democratic caucus because it is the exact opposite. The democrats in Iowa do things in a very public way when they caucus, persuading the undecided voters and competing candidate voters to literally come over to their side of room before the final head count   is taken and votes are final. We heard many impassioned speeches. And most were well thought out. However, my favorite speech of the night actually had very little substance, which is probably why I liked it so much. It was from a Clinton voter trying to convince an undecided voter that he should caucus with them. His exact words were “you need to vote for Hillary because Hillary looks so much better in person than on TV.” I doubt that was the right approach, as I watched that undecided voter get up and head straight over to Bernie Sanders’ side of the room.

With the caucus behind us and the night still young, our group headed downtown to see what candidate after-party we could crash.  As it turns out, crashing one of these parties really isn’t all that hard.  Simply show up, sign in, provide an email address and before you know it, you’re standing in the middle of the Marriott ballroom with several hundred excited supporters waiting for Marco Rubio to show up and give a speech. I guess I was excited to be there as well because I posted on social media what I was up to. Not long after my post, I received a text during the middle of Rubio’s speech. Apparently the back of my head made it on TV when the camera scanned the crowd. I guess I’m famous now.

The end to my evening was a ride back to my hotel in a Bentley. A Bentley! There is no better way to end a great day than a ride in a Bentley. Thanks again Bob and Josh at i2Tech! Can we do it again in four years?

Wednesday, January 27th, 2016

Snowzilla: No Match for Plastics

MiaHeadshotBy Mia Freis Quinn, SPI Vice President of Communications

I thought we’d be losing our minds by now, Day 6 of Snowzilla, the blizzard that dumped two feet of snow on the Washington, D.C. area.

But we’re not, somehow?  How is that?  My husband, our two young sons and I are (literally) digging the mountains of snow outside.  What went right during this storm for us?  The top 6 highlights:

1. Good Food.  We didn’t just stock up for this storm, we finally got it right and did it well.  Two of everything.  Brie.  But also salad.  Good wine.  Ingredients for our favorite recipes.  And, our Blue Apron box arrived two days before the storm.  We were hardly slapping together PB & J’s to get through; we were indulging in cod & potato brandade.

SnowzillaFood2. Sleds!  Sledding!  These plastic beauties delivered.  One neighborhood kid created a “luge” track for our block in his front yard, which my son must have gone down 30 times (while the adults enjoyed beverages around a fire pit).

SnowzillaSledAt four months in to my tenure at SPI, I find I’m way more aware of how much and how often plastic touches my life. And during this storm plastic was everywhere – all four of our shovels (especially prominent in the kids’ shovels), the sleds, our snowball makers, our boot trays, and other essential items, which brings me to…

3. Extra Insulation.  My biggest worry was that we’d lose power and freeze in our drafty house (we don’t have a fireplace).  So Friday morning I hit the hardware store and bought electric outlet sealers, window insulation and insulating tape.  All brought to you by…plastic.

4. Open-ended Play.  Santa brought my boys a plastic set of sticks and connectors that’s a fort-builder’s dream.  And every snow day needs a good fort.

SnowzillaFort

Other all-star entertainment items include our ever-reliable Magnatiles, Playmobil and Legos.  And keeping it uber-simple – the Costco bag of red solo cups – hours of building.  Again, all brought to you by…plastics.

SnowzillaCups

5. The Denver Broncos.  My hometown team, led by Peyton Manning, came through against the Patriots this weekend, and the victory was sweet! Fellow Broncos fans in our neighborhood shoveled themselves out, converged in our living room, and we all dined on Cincinnati Chili in homage to my husband’s fallen Bengals.

6. No Milk Panic.  Tip:  For all you who have declared during a storm “We’ve already run out of milk!  Now what!?” – buy several containers of organic milk next time.  The expiration dates are ridiculous!  You could stockpile it and be hunkered down for a few months.

Have there been some rough moments?  You bet. At one point this chili my neighbor left in my fridge fell out and crashed to the ground. I wish she’d used a plastic container.

SnowzillaChili

Wednesday, January 20th, 2016

The Growing Role of Plastics in Construction and Building

Go to just about any construction or job site around the world and you will find the building blocks architects have used for centuries: metals, wood, stone and masonry. But take a closer look at the new home being built in your neighborhood or the commercial building taking shape in your city, and a comparatively new building tool emerges: plastics and plastics derivatives.

Zero Energy Home

The building and construction sector is currently the second largest consumer of plastics (behind packaging) and it will increasingly use plastics and plastics derivatives given its wide functionality and distinct advantage of other traditional building materials in terms of flexibility, lower costs, energy and weathering efficiency and durability according to an SPI: The Plastics Industry Trade Association report issued at the 2016 International Builders’ Show in Las Vegas.

The report, “Plastics Market Watch: Building and Construction” is the fourth in a series published by SPI analyzing key factors impacting the plastic industry’s key end markets.

2015-03256-SPI-PMW-Construction-4.indd

The leading uses of plastics for residential and commercial construction include roofing, insulation, wall coverings, windows, piping, composite “lumber” planks and rails, flooring and structure wraps.

“The innovation within the plastics industry to improve and diversify products is matched by the building and construction sector’s pace to find and use new solutions to address fundamental issues like structural integrity, energy savings, recycling, and cost savings,” said William R. Carteaux, SPI President and CEO.

According to the report, while the building and construction sector has not regained its prerecession vigor, it is making steady progress with the promise of growth in the future. Globally, China, India, and the U.S. will be the primary drivers of construction activity as India is on pace to overtake Japan as the third largest construction market between 2017 and 2022.

Domestically, an estimated 1.3 million new housing units will be needed per year for the next decade to keep pace with population growth and existing housing unit characteristics, a dramatic increase of several hundred thousand more per year when compared to the Great Recession. “The buying behavior and economic security of Generation Y and Millennials will be the key over the next several years,” Carteaux explained. “Encouraging signals from recent surveys indicate that younger generations are inclined to buy homes.”

The dramatic inroads made by plastics on building and construction sites according to the SPI study are linked to plastics’ utility, cost, ease of installation, longevity and the “propensity of the plastics industry to constantly develop new products to supersede traditional building materials in many phases of the building process.”

“Plastics play an exciting and growing role in building and construction around the world, particularly given the drive to find ‘Smart’ designs with improved environmental and energy efficiencies,” Carteaux concluded. “Our industry needs to continue to collaborate with engineers and architects on building materials and find new innovations and advances. We have a strong, versatile, and ecologically responsible material—the plastics industry should expand its presence on construction sites in the years ahead.”

SPI will continue its Plastics Market Watch reports in 2016—“Automotive Recycling” will be published in the first quarter. Previous reports, including “Automotive & Transportation, “Healthcare & Medical Devices” and “Packaging” are available on the SPI website.

Wednesday, January 13th, 2016

FLiP Rolls Out Mentorship Program

The traditional mentor-mentee (teacher-pupil, coach-player, etc.) relationship can often be thought of as a one-way street; knowledge, experience and wisdom flows from the former party to the latter, and not the other way around.

Ask anyone who’s taken the time to be a mentor though and you might find that things aren’t so linear. Just ask Jessica Bursack, communications manager for Jarden Process Solutions and leader of SPI’s Future Leaders in Plastics (FLiP) Mentorship Task Group. “I was nominated for the task group because I had experience working with mentor programs before,” she said. “I’ve been a mentee a number of times through careers and professional aspects, with people who took me under their wing and made sure to connect me with other people and taught me about the way trade shows work.”

Jessica Bursack

Jessica Bursack

Bursack has also been on the other side of the transaction too, coaching young adults in debate teams and mentoring them informally in the art of rhetoric. One experience was just as fulfilling as the other, she noted. “As a mentor, you learn how to inform, instruct and educate in a way that’s not intrusive,” Bursack said. “You see things so simply because you’ve been doing them for so long, that when you step back and realize that people are learning things for the first time, it humbles you.”

“It puts things in perspective,” she added.

In honor of National Mentoring Month, in January FLiP, led by Bursack’s task group, will soft launch its own plastics-specific mentorship program, aimed at delivering the benefits that only a solid mentor can provide, and, as an added bonus, opening doors for seasoned plastics professionals to share their knowledge while expanding their own horizons.

“We’re trying to engage the younger generation and we also want to maintain and retain the younger people that are already in the industry,” Bursack said. “Not only is the mentee going to benefit from the program by strengthening their skills and their knowledge of the industry, but it’ll also provide perspective for the mentors: they’re hearing something they may not have heard before and it might help them look at things differently.”

Bursack noted that the program is specifically designed not only to benefit mentors and mentees, but also plastics companies that are struggling to reach new and existing millennial employees. “It’s helpful when it comes to not only recruitment but also engagement and education,” she said. “Participants will have a sense of belonging but also a sense of ownership when they’re invested in it.”

FLiP_logo-2It doesn’t take an expert to see that in many ways, the millennial generation is different than those that preceded it. “Our generation is a lot different. Not ‘bad’ different, but different in the way that we look at how employers want to take care of us,” Bursack said, noting that getting involved with the FLiP mentorship program is one way to make it clear to millennial employees that their company cares about and is actively invested in their growth. “If younger people feel that sense of engagement, they’ll be easier to hire, and retain.”

A small pilot group of mentors and mentees has been selected for the first stage of the mentorship program rollout, but FLiP invites all companies, potential mentors and potential mentees to get involved today. Email Katie Masterson (kmasterson@plasticsindustry.org) to get involved.