Friday, October 30th, 2015

From 4D Printing to Walmart’s “Made in America” Campaign, GPS 2015 Hits a Homerun in Chicago

Economists Discuss the Impact of China Across the U.S. and World Markets

ChicagoSkylineChina is still the elephant in the room. Whether the topic is labor, supply and demand or economic growth, it seems like the China-effect is at the center of conversation.  In opening remarks at the Global Plastics Summit 2015 (GPS), IHS Chief Economist Nariman Behravesh helped attendees put China in perspective; less than 1 percent of the U.S. GDP (Gross Domestic Product) is exported to China. Therefore China doesn’t have the same impact on the U.S. economy as it does on the rest of the world.

The big hemorrhage in China is its mining and heavy manufacturing sectors, said Behravesh, indicating that the two sectors are experiencing a recession compared to China’s booming service sector.  But, China’s Achilles Heel is not unlike ours, or many other countries – a dwindling workforce. And while China announced its decision to relax its one child policy, Behravesh said the damage is done and China will not be able to sustain growth.

Dwindling WorkForce

A common theme throughout GPS was the looming threat of few skilled workers to take positions being vacated by Baby Boomers. Every society needs a healthy workforce not only to create goods and services, but also to consume them, said demographic expert Ken Gronbach.

So for China and other industrialized countries, a solution requires more than procreation. The next generation needs to be taught that innovative plastic products are necessary and that they are safe.

Getting Past the Negatives

But the industry must overcome negativity associated with manufacturing and plastics. Consider that the bulk of GPS’s presentations focused on markets and trends for associated materials like polyethylene, polypropylene and others. After delivering a presentation on materials, Paul Caprio, president of KraussMaffei Corp., gleefully pointed out that “plastics professionals are the only people who appreciate and can get excited about these materials.” Outside of our industry, “plastic is a dirty word and it’s a huge challenge for us to change this,” he said.

Indeed it is, Gronbach cautioned, “If you don’t deal with public opinion, it will deal with you. The largest generation of people ever born are currently 11 to 30 years old and they think all the time and they are coming straight for you.”

So What Do We Do?

SkylarTibbits

Skylar Tibbits

In addition to telling the positive stories about plastic, perhaps one solution is to sell tomorrow’s professionals on cutting-edge technology like 4D printing. Massachusetts Institute of Technology (MIT) researcher Skylar Tibbits led a lively discussion about the future of plastics noting “we use plastics in almost everything we do.”

Tibbits and his team at MIT have been working to develop the next generation of printing called 4D printing. What’s fascinating about 4D printing is that it results in a transformative product like a robot that has the ability to solve problems. Through the use of 4D printing, future products (think dental and medical devices) will be resilient and change with humans and the environment.

The consensus at GPS is that the U.S. needs advanced manufacturing such as 4D printing.

If It’s Not the China-Effect, It’s the Walmart-Effect

Representing the brand owner angle, Chris Quinn, president and CEO of the Step2 Company, mentioned Walmart’s celebrated move to buy $50 billion in U.S. made products over the next 10 years. “We now have a case to drive more manufacturing back to the U.S.,” he said, indicating that Walmart’s campaign will undoubtedly influence others to make similar declarations.

For the international community, there’s implied quality in U.S.-produced goods. And from the standpoint of the manufacturer, there are multiple benefits to operating in the U.S. such as the protection of intellectual property, internet security benefits, and better control over transportation costs and logistics.

“After all, who wants to be in the footwear business when the port of L.A. shuts down two months before school starts?” Quinn asked. “Not me. Transporting from Odessa to Mobile is better.” (Los Angeles Times, Line of ships waiting off coast grows as ports shut down for holiday, Feb. 16, 2015.)GPSSquare

For additional information or pictures from GPS, contact Kimberly Coghill at kcoghill@plasticsindustry.org.

Friday, October 23rd, 2015

Five Countries Your Company Should Be Paying More Attention To

In today’s interconnected global economy, there’s no such thing as a growing market that no one’s heard of yet. Information travels fast and export opportunities don’t stay secret for very long, but nonetheless, there are markets “where more attention needs to be paid,” according to IHS Chief Economist Nariman Behravesh. Below are five that he thinks are worth highlighting for companies seeking export-driven growth.

Mumbai's CST (Chatrapati Shivaji Terminus) illuminated at night with streaks of vehicular traffic headlights in foreground and copy space

Chatrapati Shivaji Terminus, Mumbai, India

1. India

“India is an economy whose growth rate certainly is holding up fairly well,” Behravesh said, noting that companies might consider placing more emphasis on India and less emphasis on China moving forward. “Sort of a rebalancing of interests, I guess, in favor of India, I would strongly recommend because India is going to be expanding fairly rapidly. It’s a smaller economy than China’s but it’s growing more rapidly.”

Vietnam_450

Hanoi, Vietnam

2. Vietnam

Similar to India, Vietnam presents another “not as big, but growing nicely” supplement to China’s volatility, according to Behravesh. It currently also happens to be one of the top export growth markets for the U.S. plastics industry, according to SPI.

Bangladesh_450

Dhaka City Center, Bangladesh

 

Kandy, Sri Lanka

Kandy, Sri Lanka

3. Bangladesh and 4. Sri Lanka

Economies like Bangladesh and Sri Lanka are poor but they’re coming up on the development scale,” Behravesh said. The Asian Development Bank estimated that Bangladesh could see 7.6-percent growth in 2016, while it also noted that in Sri Lanka, a January election resolved some uncertainty for investors and in 2016 the nation could see 7.0-percent growth.

Jakarta, Indonesia

Jakarta, Indonesia

5. Indonesia

Indonesia is the fourth most populous country in the world. Economically it’s been relatively successful as well. “It’s been growing a fairly steady 4 or 5 percent,” Behravesh said. “That’s another one that I think companies should pay more attention to.”

For more global insights like these, join Behravesh for his presentation at the Global Plastics Summit, Oct. 28-30 in Chicago.

Thursday, October 22nd, 2015

Recycling Rundown: Data that Shows Recycling is Still Economically Viable, Environmentally Beneficial and, Most Importantly, Growing

A bouquet of flowers made from recycled plastics.

A bouquet of flowers made from recycled plastics.

There’s a lot of data illustrating recycling’s economic viability, environmental bona fides and overall growth out there. We’ve collected some of it here for the benefit of naysayers and true believers alike. Below is a (not even close to comprehensive) rundown of facts about the importance of recycling. Did we miss any? Leave us a comment or send us a tweet and we’ll add it in!

Robin Wiener, president of the Institute for Scrap Recycling Industries (via Recycling International): “Recycling accounts for nearly US$ 106 billion in annual economic activity and is responsible for 471,587 direct and indirect jobs in the USA, generating more than US$ 4.3 billion in state and local revenues annually and a further US$ 6.76 billion in federal taxes.”

Grist’s Ben Adler: “Commercial customers want [recycling] to lower their waste bill, whether it’s a restaurant, factory, or college,” says Chaz Miller, director of policy and advocacy for the National Waste and Recycling Association (NWRA). “They see the ability to sell their recyclables and they want the revenue. We do not see commercial clients backing away from recycling.”

Eco-Cycle Solutions: If everyone in the United States recycled only their plastic water bottles for one year (all 42.6 BILLION of them), that would offset the greenhouse gases generated by 1,065,000 round-trips between London and New York in coach every year.

The Closed Loop Fund: “According to the EPA, recycling rates doubled from 16 percent in 1990 to 28.5 percent and to 34 percent in 2010—a 40 percent increase every decade.”

From the American Chemistry Council’s Plastics Division: “According to RecyclingMarkets.net, the average prices for recovered plastics as of June 2, 2015, were: HDPE natural plastic (milk jugs) $0.32 per pound, PET (beverage bottles) $0.14 per pound, and PP (deli and dairy tubs and lids) $0.14 per pound. During the same period, prices of mixed paper, newspaper and old corrugated containers (cardboard) ranged from $0.02 to $0.04 per pound.”

Ron Gonen, former Deputy Commissioner for Sanitation and Recycling in NYC:  “The economics of recycling for a City are simple. Send paper, metal, glass, plastics and food waste to landfill, the City is charged a fee….Send the same material to a local recycling facility or organics processor, the City avoids the landfill fee and sometimes also generates revenue.”

Recycle Bin

Rick Moore, executive director of the National Association for PET Container Resources (NAPCOR): “Even with low plastic resin prices, use of recycled PET in the U.S. is at an all-time high.”

There is a paradigm shift happening in waste management.  We are no longer just talking about recycling; rather, we’re having a broader conversation about sustainable materials management, and taking a bigger systems approach. There are both measurable and immeasurable benefits of recycling in the big picture of sustainable materials management and overall lifecycle impacts.

Send us a comment or tweet us at @SPI_4_Plastics if you’d like to contribute additional facts about the benefits or importance of recycling.

Wednesday, October 21st, 2015

Plastics Enhance Delivery of Medical Care

The plastics industry is positioned to play a significant role in the healthcare and medical device space as the demand for services and single-use products grows in conjunction with the graying population, a study released by SPI: The Plastics Industry Trade Association said. In its report, “Plastics Market Watch: Healthcare & Medical Devices,” SPI discusses advances in plastics that have enabled the material to gradually displace traditional medical devices made of metal, ceramics and other substances.Market Watch 2

Due to plastics’ extraordinary versatility and the constant development of new blends, it seems extremely unlikely that plastics will be replaced by another material, at least not in the foreseeable future. The change now underway is exciting and foretells longer and healthier lives for humanity – and new applications for plastics.

“Increasing reliance on plastics has generated remarkable breakthroughs in technology that not only enhance delivery of medical care but also provide increased usage of plastics,” William R. Carteaux, SPI’s president and CEO, said. “This has been, and continues to be, a win-win for the plastics and healthcare industries.”

Using this as a backdrop, the report draws on the work of Ken Gronbach, a multi-generational marketing expert and author of “The Age Curve: How to Profit from the Coming Demographic Storm,” to explain the future market and the population that’s driving it.

Gronbach said the world’s population is setting up healthcare’s perfect storm. “There will be a collision of the largest generations ever to become elderly with the age sector that demands the most healthcare services. In many cases, worldwide the number of 70-plus year old people will double. When a market doubles in demographic size, the demand for products and services related to that market more than doubles – a phenomenon called ‘the multiplier effect,’” he said.

All of the critical data – soaring populations, rising middle classes, aging population, advances in medical technologies – point to an ever stronger market for medical devices which today are largely comprised of plastics.  In earlier years, the growth of plastics in healthcare, particularly medical devices, came largely from material substitution, but that transition has been accomplished. Now the growth of the medical device market is almost synonymous with rising demand for plastics, or so it would seem. The shift to non-invasive medical protocols in particular will reduce the demand for many plastic basics of medical care.

For equipment manufacturers, the changing face of modern medicine means smaller equipment, but that will not directly impinge on plastics. Resin suppliers will not see much change because not a huge amount of resin goes into medical equipment. The market for plastics in medical devices is stable and growing, but producers must monitor the market carefully, anticipate changes coming down the road and be prepared to meet them. They must also keep tabs on the regulatory landscape for one can never be sure which way the political fortunes will blow in response to inflammatory news stories or consumer complaints.

Major shifts in the provision and funding of healthcare in this country will drive increased focus on reducing costs at all levels of the medical care industry, and a series of breakthroughs in medical science promise a variety of less physically intrusive medical therapies that will reduce the need for disposable medical devices, which are largely composed of plastics. In the distant future, these forces will to some extent counter the generally positive trajectory for use of plastics in medical devices. But for the foreseeable future, the role of plastics in modern medicine is dominant and likely to remain so.

SPI plans to conduct presentations and webinars in conjunction with this report to discuss our findings, and hope that these will provide important food for thought, whether you are an equipment manufacturer, materials supplier, processor, recycler or brand owner. Future reports issued later this year will focus on Plastics in Packaging, and Plastics in Building & Construction. “Plastics Market Watch: Automotive & Transportation” may be accessed by clicking here.

Wednesday, October 21st, 2015

IHS Economist: Patience Key to Emerging Market Success

Nariman Behravesh, IHS’ chief economist, doesn’t mince words about where companies can expect to find growth in the coming years, or even decades. “The emerging market is still the future,” he said.

Nariman Behravesh, IHS Chief Economist

Nariman Behravesh, IHS Chief Economist

Lately, however, the economies that comprise what’s considered the emerging market have looked a little worse for wear, rattling investors and making exporters anxious. “The outlook for the emerging world is shaky,” Behravesh said. “Commodity prices and export revenues are hurting, and separately both their stock markets and currencies are getting hit pretty badly.” This has created a situation where finances have become much more problematic for the region; credit conditions have tightened, adding another hurdle that these economies will have to vault over on their way to relative stability.

“Over the last four years there’s been a significant deceleration in emerging market growth. They’re growing at about half the rate they were four years ago,” Behravesh said. “What you’re seeing in the developed world—the U.S., Europe, Japan—is just a very gradual acceleration of growth, so that’s not where the threat is coming from; the threat is from the emerging markets.”

Despite the risks, according to Behravesh, it’s important to differentiate between short-term volatility and long-term growth prospects. “The emerging market is going through a process of catching up with the developed economy,” he said. “For them to realize that future, it’s going to take a while longer. Companies that want to do business in the emerging world and make that a part of their growth strategy will have to be patient because it’s going to take a while.”

“This has to be a long-term strategy. This is not a short-term strategy for growth,” Behravesh added.

For the short-term what companies are doing to hedge their bets is bringing business back to where growth is fastest, namely Europe and particularly the U.S. “That’s what we’re seeing now,” Behravesh said, noting that companies shouldn’t expect this reshoring of business back to familiar shores to carry on in perpetuity.

“This is temporary,” Behravesh said. “The question is how temporary.”

For more insights from Behravesh and a host of other plastics and petrochemical industry experts, register today for the Global Plastics Summit, Oct. 28-30 in Chicago.

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