Thursday, June 30th, 2016

How Will the Brexit Impact the U.S. Plastics Industry?

Brexit concept jigsaw puzzleBy Michael Taylor, Vice President, International Affairs and Trade, SPI: The Plastics Industry Trade Association

The vote by 52 percent of the United Kingdom to leave the European Union—the so-called British exit (Brexit)—has sent shockwaves across global financial markets and ushered in a period of uncertainty for manufacturers on both sides of the Atlantic. The vote could further undermine growth within Europe and potentially around the globe. Given the size of the U.S. economic relationship with Europe, the U.K. decision may have significant ramifications for the American plastics industry.

The U.S. commercial relationship with the U.K. and EU combined is the U.S.’ largest in the world, representing about 40 percent of the global economy. Trade of U.S.–EU manufactured goods reached $836 billion in 2015, and cross-border investment equaled more than $5 trillion. Many U.S. companies with EU operations have headquarters in London, and about 17 percent of U.S.-manufactured exports to the EU are destined for the U.K.

The U.K. is the 9th largest export market for the U.S. plastics industry representing more than $1.3 billion dollars in goods in 2015, and our 8th largest import market with more than $249 million dollars in goods in 2015. While the day-to-day operations of businesses in the United Kingdom, European Union or the United States may not be directly impacted by the Brexit immediately, all businesses engaged in the transatlantic market should prepare for the changes that are inevitably coming.

It’s expected that what the Brexit means for manufacturers in the United States and their partners in Europe won’t be fully known for years. Soon the United Kingdom will begin negotiations with the EU under Article 50 of the Treaty of the European Union to set the terms of its withdrawal, a negotiation which some expect may take two years or more. Until the U.K. officially withdraws from the EU, it should be treated as an EU member state in trade for purposes of tariffs and other technical matters. Eventually, however, our trading relationship with the UK will experience increased costs and red tape after they have completely withdrawn from the EU. For U.K. manufacturers exporting into the EU, EU standards and regulations are expected to continue to apply for those goods to be eligible for sale, but much as they would normally apply to U.S. exports, rather than to exports from EU member companies.

Big Ben and Union Jack flag in England

Regarding the Transatlantic Trade and Investment Partnership (TTIP), a major trade treaty currently being negotiated, it is clear that the Brexit vote will be a drag on the progress of the deliberations. Prior to the vote, it was apparent that the differences separating the United States and EU in the TTIP talks were larger than the areas of shared objectives and perspectives. With the U.K. and EU now preparing to enter into a multi-year withdrawal negotiation, there are serious questions as to whether the TTIP talks can result in a truly meaningful and comprehensive agreement or even any deal at all. In addition, the loss of the UK voice within the EU will likely make it even more difficult for a deal to be struck. On a positive note, there is the possibility of a U.S.-U.K. free trade agreement, but this opportunity would still be years away at this point, and only be a fraction of the size of an ideal TTIP agreement with the entire EU.

All this said, although it is a significant event with notable economic consequences, the Brexit vote is unlikely to usher in a recession. It is very clear that all of the key players stand ready to intervene in the financial markets vigorously to buoy their economies as required. Specifically, in the U.S., the Federal Reserve will likely cut interest rates as opposed to raising them, counterbalancing any negative investment consequences the Brexit might have in the near-term for U.S. stakeholders.

But the causal relationship between political and economic uncertainty and negative market and trade consequences is well established. The Brexit will most likely have impacts akin to past Eurozone crises, at least in the short term. It will shake financial markets and consumer confidence, cause a majority of business decision-makers to hedge and serve as an unwelcome drag on economic growth and demand.

Friday, June 17th, 2016

On Father’s Day, Get to Know Some of SPI’s Family-Owned Member Companies

Just like families themselves, no two family-owned businesses are the same. The plastics industry is home to many of these companies and in honor of Father’s Day, SPI highlights some family-owned members. Working with family to operate a business can be challenging and rewarding at the same time, but these companies illustrate that the rewards of passing down best practices from generation to generation, and the pride that comes from carrying on family traditions, is a big part of what makes working at these companies so worthwhile.

1. Arburg

The Hehl family, and two generations of Arburg ownership via Plastics News.

The Hehl family, and two generations of Arburg ownership via Plastics News.

In 1923, Arthur Hehl founded Feingeräte-Fabrik Hehl in Lossburg, Germany where he produced precision instruments for medical applications. In 1943, Arthur’s son Karl renamed the company Arburg and expanded into injection molding. In 2005, Karl and Eugen Hehl passed management of the company on to its third generation, which included Michael Hehl, Arburg’s managing partner. Michael told Plastics News “The achievements of my father and uncle can’t really be put into words…To transform a little workshop into a global company within an industry is exceptional. As the third entrepreneurial generation, we also feel committed to this path.”

2. Shuman Plastics

From left: Dan, Charles and Ken Shuman via Plastics News.

From left: Dan, Charles and Ken Shuman via Plastics News.

In 1947, Phillip Shuman founded Shuman Plastics Corporation as a scrap business where he was later joined by his sons Charlie and Hy. In 1994, Charlie took full ownership of the company, which is now a leader in recycling and the distribution of thermoplastic resin and compounds. After Charlie retired in 2008, he sold the company to his two sons Ken and Dan. Ken told Plastics News “I’d worked with him for 23 years and with my brother Dan for about a dozen years at that point. Our dad was such a strong personality and accomplished business person that I honestly questioned if I could ever fill his shoes. It occurred to me that I could never do so, but I could still lead and run this business.”

3. Superior Die Set Corp.

From left: Frank Janiszewski, the current president of Superior Die Set, Casimir H. Janiszewski, former CEO and current CEO Casimir S. Janiszewski via Plastics News

From left: Frank Janiszewski, the current president of Superior Die Set, Casimir H. Janiszewski, former CEO and current CEO Casimir S. Janiszewski via Plastics News.

Superior Die Set was founded by Kasimir Janiszewski in 1923. The company manufactures die sets, mold bases and three platen presses, among other products. Under the leadership of the third generation, Casimir S. Janiszewski and Frank Janiszewski, the company now has multiple manufacturing facilities, warehouses and distribution centers. Nick Janiszewski, fourth generation employee, stressed the importance of family lessons when he told Plastics News “The balance of the education about how things work here at Superior Die Set happens by putting in the hours—doing the hard work, getting the years of experience, and listening to and learning from the ‘history lessons’ taught to the younger generations by their elders.”

 

4. Teknor Apex

Jonathan Fain, left, and Michael Roberts of Teknor Apex Co via Plastics News.

Jonathan Fain, left, and Michael Roberts of Teknor Apex Co via Plastics News.

Alfred Fain founded Teknor Apex in 1924 and the company started as a tire recapper. During World War II, the company expanded into plastics due to a shortage of rubber, and today Alfred’s grandson, Jonathan Fain, is chairman and CEO of the company, overseeing more than 2,000 employees worldwide and annual revenue of more than $600 million. Of maintaining a family firm, Jonathan noted in Plastics News that “You need to work at it…That’s a real part of my job. One is to run the company and another is to keep family members informed. They’re kind of like shareholders.”

 

5. Wittmann Battenfeld

Michael Wittmann at Fakuma via Plastics News.

Michael Wittmann at Fakuma via Plastics News.

In 1976, Dr. Werner Wittmann founded Wittmann to make water flow regulators. In 2008, Wittmann took over Battenfeld and expanded into injection molding and opened new production facilities in 7 countries. Today, Werner’s sons Michael and Thomas Wittmann hold leadership roles. Michael wants to keep the family legacy and has recently hired his son to work at the factory. According to Plastics News, Sonny Morneault, Wittmann’s vice president of sales at the company’s operation in Torrington, Conn., noted there are benefits to being a family-owned business: “There are many advantages but I think the most important is the ability to be nimble…We’re nimble and quick on our feet. That’s an invaluable benefit, for sure.”

 

 

Friday, June 10th, 2016

The FLiP Files: Allison Lin

The FLiP Files is a blog series spotlighting young professionals that are active in SPI’s Future Leaders in Plastics (FLiP), a group for plastics professionals under the age of 40.  For our fourth entry, we spoke to FLiP member Allison Lin of The Coca-Cola Company.

AllisonLin-Where do you work and what’s your title? 

I work at The Coca-Cola Company and am a director of closures and labels in the Global Sustainable Procurement group.

-Tell us a little about what your company does.

Coca-Cola is an over 22 billion-dollar beverage company with brands sold in every country in the world except two.

-How did you find yourself working in the plastics industry?  

Very randomly. I have a Bachelor of Science in business and a Master of Business Administration, and was asked to take a role in global strategy development for plastics packaging at Procter & Gamble. I was hooked! I love how in packaging you have to balance product protection, shelf appeal, environmental impacts and much more. Plus, it’s amazing to see something you worked on in a store or in a consumer’s hand.

-Has anyone in the industry mentored you?  

No official mentorships, but I have a lot of role models. For instance Shell Huang, who pioneered bioPET’s introduction into mainstream packaging. I also have many heroes in the recycling industry, including people who have led the way to improve the perception of plastics packaging by working hard to improve recycling.

-Describe in one sentence what you do on an average day. 

I work with the external supply base and innovation network to improve the overall value of our plastic packaging while meeting internal and consumer requirements.

-What do you like most about working in the plastics industry? 

We touch everything and we are always changing.

-What’s one thing about your personal life that you feel has been changed by having a career in plastics? 

I see green-washing everywhere and try to help consumers and businesses make educated decisions on their plastic packaging choices.

-What are the major challenges you think are facing the plastics industry today? How do you think the industry can overcome them? 

Green-washing is adding to the negative perception of plastics. Also consumers’ lack of recycling, and the lack of availability of recycling infrastructure, hurts the industry; this is what leads to plastics in the oceans, on the streets and in land-fills.

-Why do you think someone from your generation should consider a career in plastics? 

We have the opportunity to positively impact perception in our industry and help to make consumers think differently about what matters. How do we make them think positively about plastics? How do we improve plastics’ carbon footprint? How do we leverage social media to improve recycling rates, explore new materials, and connect innovators/start-ups working on more sustainable plastics?

-What’s one plastic product you couldn’t live without?

Coffee maker.

Thursday, June 9th, 2016

Plastics Industry Welcomes First Bipartisan TSCA Update in 40 Years

BillC 2015 NEW USE THIS

SPI President and CEO William Carteaux

Earlier this week the Senate approved a much-needed update to the Toxic Substances Control Act (TSCA). The bill is now headed to President Barack Obama’s desk for signature. Here’s what SPI President and CEO William Carteaux, had to say about the first substantive update to TSCA in four decades:

“The U.S. plastics industry and its partners have worked tirelessly with multiple Congresses and administrations to make our nation’s outdated chemical regulatory infrastructure stronger and more responsive to the needs of today’s consumers and companies.

Today those efforts have paid off in the form of bipartisan legislation marking the first substantive update to the Toxic Substances Control Act in four decades.

CongressSunriseViewThis consensus-based bill is the product of thoughtful discussions by House and Senate negotiators.  It gives consumers the confidence in the products they depend upon each day, while giving companies a more predictable regulatory system that’s based on science rather than rhetoric.  The plastics industry also applauds lawmakers for ensuring that the new bill provides for the preservation of confidential business information, ensuring that the growth this bill is certain to unlock won’t be jeopardized.

This is a great day for the U.S. plastics industry and its nearly one million workers and their families. We look forward to continuing to grow the American economy by manufacturing the safest, strongest and most technologically advanced products and materials.”

Thursday, May 26th, 2016

Bridging the Gap between Policymakers and Business Owners

Every year, members of the plastics industry have the opportunity to fly to Washington, D.C. to meet directly with members of Congress and voice their opinions on policies that directly affect their line of business. The Plastics Industry Fly-In is a way to bridge the gap between policymakers and business owners. Members of Congress and their staffs deal with a number of issues and when they are able to put a face and story to a policy, it helps them make better informed decisions. Below are comments on the importance of the Fly-In from some industry members who have participated in past Fly-Ins:

TedFisher_headshot

Ted Fisher, Sales Director, ALAC International, Inc.: “I attended my first Fly-In in 2010, and haven’t missed one since.

The initial exposure to the inner, inside-office and inner workings on Capitol Hill was significant. I went from a deer in the headlights to being fairly comfortable very quickly, but you have to take that first step. Going up there with your colleagues and having things laid out for you, like they are at the Fly-In, certainly gets you up to speed pretty quickly.

When you’re face-to-face with the staffers, senators and the congressmen themselves, that’s your opportunity to convey what’s important to your organization, and you can’t do that remotely. You’ve got to be in front of them to make an impact.”

 

Wylie Royce

Wylie Royce, Partner, Royce Associates: “Too many people in our industry think that because they may not come from a large company, going to D.C. is a waste of time. There is also an assumption that the big company lobbyists will take care of the industry issues for them, and that is simply not the case. Lobbyists take care of what they are paid to take care of, and if it coincides with your interests that’s good; if it doesn’t, then you are letting someone who has no interest in your future make your business decisions for you.

After one or two visits to D.C. to attend the Fly-In you may think, ‘Why should I bother? Nothing seems to be getting done.’ What’s getting done is you are building a relationship with the legislators who can directly affect your business, and this relationship isn’t built overnight. Instead, it requires several visits and follow-up calls. By building this relationship, you are becoming a credible source of information to your legislators and their staff, and you will have a voice in decisions that they make. In some cases, that could mean the difference between continuing and dropping a complete line of products.”

Greg Leighton with Rep. Tony Cárdenas (D-CA) at C&G Mercury Plastics.

Greg Leighton with Rep. Tony Cárdenas (D-CA) at C&G Mercury Plastics.

Greg Leighton, Owner, C&G Mercury Plastics: “The benefits of the Fly-In are that I get to see my legislators personally. When I talk to them on the phone they recognize me. I When I invite them for a plant tour, they come.

I went to Congressman Tony Cardenas’ office at a Fly-In a couple of years ago. A few years after, we invited him to visit our plant, and he came. He brought his chief of staff, toured the plant and was impressed by what we were doing.

The Fly-In also shows the next generation that you don’t have to be nervous to do this. There’s all this angst out there for the next generation: ‘What’s the future going to look like?’ You need to show that you can participate in that future.”

Participating in the Fly-In is a key step in creating long-term relationships with legislators and policymakers that can benefit your company for years to come. This year, the Fly-In will be held June 21-22 on Capitol Hill. To register, click here.