Emerging Markets

Change is a constant–and so is opportunity. Even as the plastics industry radically transforms itself, new applications and technologies continue to flourish. Modern Plastics reports on four markets that look bullish for processors.

Flexible electronics

Conductive and light–emitting polymers will change the face of electronics. Silicon Valley will not become the valley of the dinosaurs, though.

A combination of major multinationals and small development companies spun off from top–ranking universities is at the vanguard of a movement that will transform the way we view information, especially when we are on the move.

It will resolve, for example, the paradox of having handheld devices capable of receiving truckloads of text and graphics in the blink of an eye, while only displaying them on a screen the size of a large stamp. Instead, upcoming devices will have flexible displays not much smaller than those of a computer, which roll away when not in use. This movement will also make possible the production of much larger, 3–D high–definition displays for both indoor and outdoor applications.

Earlier this year, consumer electronics maker Philips said it was capable of producing prototypes of ultra–thin, large–area, rollable displays on a routine basis, "and intends to rapidly move towards an industrially feasible production process."

Polymer Vision, a "technology incubator" at Philips, has made 5–inch (diagonal) displays with a bending radius of 2 cm. It says displays made with "electronic ink" technology are ideal candidates for reading–intensive applications "because of their excellent, paper–like readability and extremely low power consumption." Polymer Vision currently can make more than 5000 fully functional rollable display samples per year, and is in the process of defining a pilot production line.

Alongside Philips and other electronics multinationals are startups like Cambridge Display Technologies (CDT) and Plastic Logic in Cambridge, two small R&D companies spun out of the Cavendish Laboratory, part of Cambridge University in England. CDT has developed light–emitting diodes based on solution–processible polymers (CDT calls them PLEDs, which are a sub–group of OLEDs, organic LEDs), that can be printed onto formable and even flexible substrates, typically sheets of plastic such as PET.

Plastic Logic''s expertise lies in printing similarly exotic polymers (both semiconducting and conducting), as well as metals, to form thin–film transistors (TFTs) that can be used in active matrix back–planes that drive displays (and do many other things besides). Plastic Logic has also made resistors, capacitors, diodes, sensors, and other components and connections.

Plastic transistors have come a long way in the last few years, but they are still orders of magnitude less powerful than state–of–the–art transistors made from crystalline silicon. But as Plastic Logic marketing executive Cranch Lamble points out, it is not the company''s intention to compete in the same end of the market, but to extend it. The beauty of plastics electronics is that they can be produced—directly from CAD data and at very high speed onto large, flexible surfaces—using ink–jet printing equipment that doesn''t require the complex photolithography and vacuum systems used to make today''s transistors.

The low temperatures used in the process also mean that the substrates can be made from easily obtainable plastics. All told, once the technology is fully developed, the cost of producing finished parts should be highly affordable.

Outside displays, Plastic Logic is looking at a whole raft of applications that include smart labels, smart packaging, and radio frequency identification (RFID) devices.

Several different types of polymers, conductive and semi–conductive, are used to make plastic electronics. Plastic Logic is sourcing from a number of suppliers, primarily Dow Chemical (Midland, MI), which produces polyethylenedioxy–thiophene/polystyrene sulfonic acid (PDOT/PSS), and polydioctylfluorine–cobithiophene (F8T2).

Plastic Logic is one of the very few independent companies in the world developing polymeric back–plane technology. Lamble notes, however, that work is also going on in the R&D labs of major end–users.

Plastic Logic itself has a cross–licensing agreement with Epson, and Lamble also cites the joint venture between Siemens and printing specialist Kurz. Several major chemical companies are also heavily involved.

Some examples

– Covion Organic Semiconductors in Frankfurt, which calls itself ''the first company to offer both high–performance small molecule and conjugated polymer OLED materials at commercial scale,'' and whose prime focus is as a manufacturing partner to industry innovators like CDT (with whom it has an agreement covering technology licensing as well as R&D of new polymers for LEP applications), is owned by specialty chemicals company Avecia, which has its roots in ICI;

– Bayer subsidiary HC Starck in Leverkusen, Germany makes PDOT/PSS under the Baytron P banner. It is concentrating on applications in ''hole injection'' interlayers in displays. Baytron P features in a ''magic mirror'' display on a new clamshell–type mobile phone from Philips. The display can be used as a mirror until a message comes in, at which point it lights up;

– DuPont has a business unit called Olight working intensively in the area

– BASF is developing OLEDs based on special dyes rather than polymers

– In February, Dow signed a commercial supply agreement with Osram Opto Semiconductors Inc. for the use of Lumation light–emitting polymers developed by Dow''s Advanced Electronic Materials in Osram''s Pictiva PLED display modules

– Also in February, CDT signed a joint development agreement with Sumitomo Chemical (Tokyo) covering the development and scale–up of PLED materials.

Sumitomo is already a shareholder and materials licensee of CDT. CDT says the companies "will focus on the development of new solution–processible, phosphorescent materials, such as dendrimers, which exhibit very high efficiencies and good stability." Dendrimers are polymers that have a starlike, rather than linear, structure. The company says that in addition to displays for portable devices, the materials may also find use for lighting devices.

In the U.S., companies operating in the same field as CDT—the front–planes, or the actual media of displays—include Gyricon, a spin–off of Xerox, and E–Ink. They differ from CDT displays in that they use reflection rather than transmission, and they are currently easier to apply onto flexible substrates.

Displays involve two films sandwiching a layer of microscopic spheres that contain black and white particles with negative and positive charges respectively. Depending on the charge put across the films the spheres look black or white, so it is possible to make a monochrome image. Color images can also be produced in a similar way, as E–Ink has already demonstrated.

Applications targeted by the companies vary. Gyricon, for example, is after remotely updatable signage, while E–Ink is concentrating on portable e–readers. E–Ink technology is used in the Philips display for Sony''s just–launched Librie e–book reader. CDT for the moment is mainly concerned with displays in more conventional equipment like laptops and phones, where its displays would replace traditional liquid crystal types. It recently partnered with Philips to produce an all–polymer display for a Philips dry shaver. PM

Plastics feedstock by the ear

Already gaining acceptance in fiber, thermoformed, and film applications, corn–derived polylactides are making inroads in injection molding products.

The clearest indicator of when a new technology has bridged the gap from intriguing to emerging is when capital is bet on it. The biggest wager thus far on polylactides (PLA), plastics made from a bio–based monomer created by fermenting corn, has been placed by Cargill Dow LLC (Minnetonka, MN), a joint venture between Cargill Inc. (Minneapolis, MN) and Dow Chemical Co. (Midland, MI). The companies invested $750 million and 10 years of research and development on their NatureWorks PLA plant in Blair, NE, which opened in 2002.

For now, the vast majority of that facility''s 140,000–metric–ton capacity is used for thermoformed packaging, extruded films, and fibers. But a new group of investors is putting money behind injection molding grades, looking to capitalize on the marketing benefits of a biodegradable plastic that isn''t petroleum based, as well as recent advances with compounded blends that use additives to create a more processible resin.

Mike O''Brien, a spokesman for Cargill Dow, admits that most of the company''s efforts are going towards "the low–hanging fruit in thermoforming," but he says, "injection molding is coming down the road at some point." Several companies are on that road now.

From the lab to the marketplace

Using funding from the Environmental Protection Agency and the Dept. of Energy, John Dorgan, a chemical engineering professor at the Colorado School of Mines (CSM; Golden, CO) collaborated with several other universities as part of a project called Technology for a Sustainable Environment, which investigated PLAs and their behavior.

Dorgan presented his findings, which included software that predicts the melt rheological properties of the material and a PLA blend with the flow and mechanical properties needed for injection molding, at the Society of Plastics Engineers'' recent Global Plastics Environmental Conference.

Working in a university lab replete with an extruder, Dorgan and his associates created a blend composed of 88% to 90% NatureWorks and 10% to 12% Biostar, a biodegradable petroleum–based polyester from Eastman Chemical. A small amount of flow–modifier additive was also used to enhance processing. Normal PLAs behave much like a polystyrene, exhibiting brittleness and a small elongation to break, but the blends from CSM had improved ductility, with higher flexural modulus and impact strength.

These blends are by no means engineering thermoplastics, but Dorgan feels confident enough about their viability to have invested in an ownership stake in a new company called PolyNew, where he serves as chief technology officer, helping create blends and composites of PLAs and other biopolymers on a 50–mm twin–screw extruder.

When asked about the company''s marketing strategy for the new resins, Dorgan offered up a jokingly incredulous response.

"Strategy? I''m a college professor. You got one for me?" All kidding aside, Dorgan said PolyNew is trying to find a partner with marketing expertise to get the blends into the marketplace.

Making the cut

Frederic Scheer of Bio Corp. North America (Los Angeles, CA) has worked with biodegradable resins for 10 years, but it has been the chemical advances of recent years and the reduced prices generated from Cargill Dow''s world–scale plant that have allowed his company to push forward with injection molded cutlery, which it introduced in Q4 2003.

With four more tools on the way, Bio Corp.''s existing four molds can crank out 400 million parts/yr, which is largely directed to college and university food–service companies. Scheer says NatureWork''s new pricing and his own company''s advances have closed the piece–part pricing gap between his cutlery and polyolefin–derived offerings from a two– to three–fold difference to just a few percentage points. But even that premium is palatable given the product''s make–up. "People will agree to pay a little bit more for an environmentally sustainable product," Scheer says, "as long as the differential price isn''t too high, and I believe we''re right there."

Heat resistance remains a problem, and Scheer says the company is getting closer to the 165F (74C) needed, creating parts that sustain from 142F (61C) to 160F (71C) right now, depending on process parameters.

Tapping consumer electronics

Those sorts of physical limitations still hinder the material''s injection molding aspirations, but, according to Eldib Engineering and Research Inc. (Berkley Heights, NJ), an estimated 227,000 tons of plastics could be replaced by PLAs and other biodegradable polymers every year. And with corn prices more stable than those of oil, the long–term sustainability of petroleum in question, and carbon dioxide levels purportedly altering the atmosphere, there are plenty of incentives to find solutions for PLAs'' deficiencies.

Dorgan thinks the next market breakthrough may come in consumer electronic goods like mobile phones, which enjoy an ever–shorter product life, and it will likely come from Europe or Japan, whose limited landfill space leaves few options outside biodegradables (for an initial report on advances in PLAs in Japan, see April MP/MPI First Look).

"I think the window is probably the next two to five years," Dorgan predicts for PLAs. "You''ll see a significant renewable content in consumer electronics, where obsolescence takes place quickly, and the cell phone is probably the best example. If you have something that''s turned over every year, why not use renewable PLA?" TD

Blown film boom for stretch hoods

Business is booming in blown film for stretch–hood applications. Analysts at Applied Market Information (AMI; Bristol, England) say that in Europe alone the stretch–hood web market will increase by more than 22%/yr through 2007, compared to 5.5%/yr growth for stretch film.

Stretch hoods are elastic film tubes used to wrap a stacked pallet. Stretch film (mono– or multilayer film with elastic stretch for circular wrapping), however, dominates the pallet wrap market with 67% of the overall market. Another competitor, shrink–hood film (film tubes shrunk around a stacked pallet by applying heat), is expected to decline by 2.3%/yr through 2007, says John Campin at AMI. The total European market for pallet wrap is 1.5 million tonnes/yr.

That shouldn''t be read as an invitation to all film blowers to jump into the market, however. "Although the [pallet wrapping] films market will advance significantly in volume terms, capacity utilization in the stretch–film sector is forecast to remain below 80%, based on announced capacity increases," Campin says. "As a result, margins will be increasingly under pressure for all players and it is clear that the supply structure will undergo considerable restructuring,"

It is likely that a number of [shrink–hood film and stretch film] players will exit the business, by divestment, financial failure, or withdrawal to focus on alternatives," he says.

According to AMI, stretch hoods will encroach first on the shrink–hood market, and then ultimately take a part of the pallet stretch–wrap territory as film technology improves and wrap weight is reduced. European packaging waste legislation is putting pressure on end–users to minimize secondary packaging weight, thereby favoring stretch hoods and stretch wrap rather than thicker shrink hoods.

Stretch–hood pros

Stretch–hood equipment encases palletized goods in a tube from a blown film roll by first stretching the film with four grippers to fit over the stack. The tube is pulled over the stack and around the pallet. Horizontal and vertical tension produce the necessary holding force.

Stretch–hood film has a lot going for it, says Robert Stoppel, area sales manager at pallet handling and storage equipment producer Beumer Maschinenfabrik (Beckum, Germany). "Compared to conventional stretch wrappers and shrink–hood machines, the stretch–hood machines have a significantly higher throughput," Stoppel says.

Per Lachenmeier, president of wrapping machinery competitor Lachenmeir (Sønderborg, Denmark) says that by using stretch hoods, a packager can eliminate up to e.04/unit for gas burners needed to heat shrink wrap. And traditional stretch wrap won''t provide a balanced holding force the way a stretch hood does. Also, a single stretch–hood skin allows good barcode readability and also preserves the brand identity of packaged goods.

Brewery group Interbrew recently selected stretch hoods over shrink hoods or stretch wrap for packaging pallets of beer and cans at its Leuven, Belgium facility. Nico Van Tilt, in Interbrew''s corporate engineering department, says the company wanted to change because the existing system (shrink hoods) caused too many instances of unwrapped, loose film ends catching on their warehouse shelving system. Since the shrink hoods are fixed underneath the pallet, the film needs to be perforated by a forklift truck to remove the pallets from the packaging line. This eliminated shrink wrap from consideration because stability would be lost.

"Our customers pay for quality packs with a relatively high value, which makes a good presentation essential," Van Tilt says. Good weatherproofing was also a consideration. Film thickness is 40 µm, comparable to stretch wrap. But the stretch hood has a fixed wrapping cost per pallet. When using stretch wrap at other facilities, a packaging operator often applied extra film layers "just to be on the safe side," thereby increasing costs per pallet, he says.

Global interest

Although stretch hoods'' popularity is most pronounced in Europe and somewhat less in Asia, Lachenmeier says his company is seeing growing interest coming from North America. Appliance manufacturers there want to switch from cardboard packaging to stretch hoods, which he says could provide up to $5/unit savings and cut as much as 50% of packaging costs.

"An important factor in the transport chain of appliances is to see where scratches occur and sort these out before they get to the customer," he says.

"With cardboard you wait until the customer complains. This requires service personnel and having to take back and replace the damaged goods. Stretch–hood film can eliminate this cost factor because any damage is seen before it reaches the retailer." Other North American markets showing interest in stretch–hood film are chemicals and the cement industry. Stretch hoods cope with elevated temperatures of hot–fill cement in paper sacks.

Polymer producer ExxonMobil (Houston, TX) has recently targeted the stretch–hood market by offering processors a coextruded film recipe package to improve film performance. Introduced last December, Nexxstar, the first of a family of resin formulations, claims to offer cost benefits, toughness, and improved optical properties for use on present packaging equipment.

The 3–layer blown film structure consists of a core of Escorene Ultra FL00111 high–content (7.5% VA) ethylene–vinyl acetate copolymer (EVA) sandwiched between layers of Exceed 1018CA metallocene linear low–density polyethylene (mLLDPE). Structure ratios are 1:3:1 and thickness depends on load height and pallet size.

Jan Donck, LDPE market planner at ExxonMobil, says the EVA provides the elasticity and holding force while the mLLDPE gives tear and puncture resistance as well as high clarity. RC

Pellets into pallets proves a winner

Stricter hygiene standards, concerns about pests, and greater design features–these are the sorts of reasons the plastic pallet industry has rapidly evolved from the embryonic stage to sustained growth.

Pallets may not be the application that springs to mind when one thinks of an emerging market (after all, there have been plastic pallets for many years now —July 1998 MP/MPI), but global demand is still growing at better than 10%/yr. One sign the pallet market has not yet reached its apex is that no single production process is yet predominant in their manufacture. In most applications one process will dominate, or two will compete to some degree.

But for pallet processing, at least four plastics processes see extensive use: injection molding, rotational molding, single– or twin–sheet thermoforming, and structural foam molding.

Wilhelm Kiendl, owner of Kiga GmbH (Wilnsdorf, Germany), notes the market is served primarily by very large processors, but says there is still demand for smaller firms such as his.

"We can compete with the big ones on price, but not on output. But our reaction times are much faster," he says. His firm both injection molds and compression molds pallets, and recently also began thermoforming a collapsible version for DaimlerChrysler. Collapsible versions require less storage space after they have been emptied, an important point for many automotive OEMs and other manufacturers.

Many other processors process collapsible versions including Schoeller Wavin Systems (Pullach, the Netherlands), which won Germany''s 2003 Industrial Packaging design prize for its GLT–Plus collapsible pallet.

Thermoforming vs. injection molds

Thermoforming allows the use of much less expensive tooling—in the range of e10,000 vs. e250,000 and up for injection molds, Kiendl says—and tooling can be made in three to four weeks. But injection molded pallets can be more precisely manufactured, and this is proving an important contrast to wooden pallets, which may have knot holes and eventually sag, warp, or bend.

Injection molded units show little change over time, and this is critical in the many firms where increasingly it is robots, and not human employees, that are unloading pallets. For this to happen effectively, the pallets must conform to a single, precise size, so that goods packed on them are in the exact same position every time.

A safety issue

Strict hygiene standards are a big driver of plastic pallet demand in industries such as pharmaceuticals and foods processing, which cannot hazard the chance of a wood splinter contaminating their products. Siobhan Walsch, food–supply–chain specialist with supply–chain consultancy Team BDS (Claregalway, Ireland), says the retail market has been especially aggressive in pushing its suppliers, including processors of plastics food packaging, to meet the standards imposed on it by government food–safety watchdog organizations. Limiting the use of wooden pallets around foodstuffs is one part of that.

"Food safety and consumer protection have become a huge concern for retailers," she explains. Paul Markey, manufacturing manager at Rye Valley Foods (Carrickmacross, Ireland), a maker of ready–to–eat meals, agrees, and notes that his firm no longer allows its suppliers to ship it any goods on wooden pallets. Kiendl notes that, beyond these industries, many others including automotive are moving more assembly into cleanroom environments, within which no wood or paperboard is allowed—another long–term impetus for plastic pallet demand.

Plastic pallets stack up

Plastic pallets typically cost three to four times as much as wooden ones. As a result of these high costs, some firms use the plastic versions in–house and then transfer product to wooden pallets for shipping, since the expense of collecting pallets for return is often too high. Markey says his firm does just that—once meals are prepared, packed packs are shrink–wrapped, and are then palletized on wooden pallets for shipping.

Kiga and others have developed light–weight pallets, generally of recycled PE or PP, that are cost–competitive with untreated wooden pallets. This type sees frequent use in shipping products to the European Union, China, Australia, Japan, and other countries that do not allow the entry of untreated wooden pallets for fear of insects that are often harbored in the wood.

One–way plastic pallets typically cost from e5 to e6, says Kiendl. Pallets using virgin material designed to meet extreme hygienic standards and high strength requirements can cost as much as e50, he says, though these only see use in industries with extreme hygiene requirements, such as baby foods processing or meat packing.

In plastics'' favor for multi–trip pallets is their durability compared to wooden pallets. Plastic pallets'' strength and durability can be improved to the degree that they often can survive 100 trips, as compared with an average of 10 trips for wood. For instance, Kiga inserts iron bars into some pallets to improve load strength, and uses recycled PET in others, as it is stronger than PE or PP.

Flame–retardant pallet development hit the fast track in the U.S. after fire insurance laws there forced firms that were using plastic pallets to either upgrade their sprinkler and fire prevention systems to NFPA13 standards, a costly move, or not comply with efficient handling and storage practices.

Plastic pallets initially were vulnerable, as the versions available burned longer than wood. But many processors subsequently enhanced their compounds with flame retardants to improve plastics'' performance. The result is that many plastic pallets now pass the requirements for Underwriters Laboratories'' UL2335 flame resistance listings. MD