Industry Watch 20423

FUTURES FOR PLASTICS ON LME
The London Metal Exchange launched futures contracts for polypropylene (PP) and linear low-density polyethylene (LLDPE) on May 27, 2005. While many in the plastics industry are debating the usefulness of this move, LME chief executive Simon Heale downplayed the controversy in remarks during the launch.

“With a history of launching successful futures contracts designed for the needs of industry, the LME is looking forward to the launch of the plastics contracts and is confident of their potential to bring real benefits and to change the way that the plastics industry does business,” says Heale. “Price volatility is a long-term issue for the industry and the supply chain has, to date, lacked any tools to manage the related risk. Futures contracts will give the industry the ability to manage price risk for the first time, enabling it to better forecast profits and to concentrate on its drive for innovation.”

PP and PE contracts will be traded simultaneously in open outcry and via the electronic trading system Select, as well as 24/7 via the LME’s interoffice telephone market. Delivery points will be LME-approved facilities in free-trade zones, specifically Houston, Antwerp/Rotterdam, and Singapore.—MM

BERRY CLOSES IN ON KERR
In Q2 2005, a giant in caps, closures, and plastics packaging, Berry Plastics Corp. (Evansville, IN), is expected to close on its acquisition of another giant in caps, closures, and plastics packaging: Kerr Group Inc. (Lancaster, PA). The $445 million purchase price includes repayment of existing debts.

“The acquisition of Kerr is a continuation of Berry’s quest to offer full product breadth of plastic packaging to our customers,” says Ira Boots, Berry Plastics’ president and CEO. “Kerr’s products fill in the gaps of our closure product line while enhancing our product offering with vials, bottles, and tubes.”

“The combination of Kerr and Berry brings together two very good companies and provides Kerr with better access to international markets for its proprietary products,” says Richard Hofmann, Kerr’s president and CEO.

Kerr operates eight facilities nationwide, serving pharmaceutical, nutritional, food, beverage, and personal care markets. Berry operates 17 facilities in the U.S., Italy, and Mexico.—CK

NEW SUPER VISION
In August 2004, Jim Survilla, the founder and former owner of J&S Die & Mold Inc. (Bryon Center, MI), sold his company to Bob Sloma. Sloma has been busy since then, aggressively marketing the company nationwide to an expanded customer base: molders serving nonautomotive markets such as appliance, electrical, medical, and furniture.

“Our mission is to continue to grow based on providing our clients with a sole source in the design, engineering, production, and servicing of molds, while providing our employees with a wonderful place to work,” Sloma says. “Throughout our organization, the old and uniquely American ‘can do’ work ethic and creative spirit is thriving. The cost savings to our clients of our ‘concept to post-production’ relationship and the comfort of dealing with a trusted business partner will continue to be immense.”

An AMBA member, J&S Die & Mold builds molds up to 2000 tons in its 18,000-sq-ft CNC facility, where it does everything from program management to repairs on molds built on- and offshore. Design engineering, prototype design and building, and manufacturing complex tooling are its bread and butter. And J&A is aggressively pursuing the two-shot mold business.—CK

A BIG MOVE IN TXM, CLEANROOM CAPACITY FOR PHILLIPSA 55,000-sq-ft facility in Eau Claire, WI is the new home for the magnesium molding operations of Phillips Plastics Corp. (Phillips, WI). Sources at Phillips say the company has refined the Thixomolding (TXM) process and has helped to turn it into a proven solution for the creation of high-strength, high-performance, lightweight parts and products. (Thixomolding is licensed by Thixomat Inc. in Ann Arbor, MI.)

Serving a wide variety of markets, Phillips can mold magnesium parts from .045 lb (20g) to 4 lb (1814g). It also reportedly has the largest production TXM press in all of North America, which it uses to produce electronics enclosures and automotive parts.

Gus Myran, GM of Phillips’ Mg molding operations, says, “Phillips’ commitment to state-of-the-art technology is really paying off for our magnesium customers because we can provide complete services from design through production. And with our 40 years of plastics injection molding experience, we are also able to offer unique solutions that incorporate both plastic and magnesium to enhance durability and improve aesthetics.”

In other Phillips news, an additional 5400 sq ft of space for cleanroom molding and the creation of a 4500-sq-ft cleanroom for assembly were recently added to the Plastics Medical Molding & Assembly plant in Menomonie, WI.

“Phillips has served the medical industry for over three decades and has been the supplier of choice to manage design through distribution for many of the most respected medical OEMs in the marketplace,” says Dave Thoreson, plant manager. “This expansion will allow us to continue this tradition and will provide even more space to serve customers with high-volume needs.”

A $220 million-plus company employing more than 1500 in 13 locations occupying more than 620,000 sq ft of U.S. real estate, Phillips Plastics has been growing like this for the past 40 years.—CK

GW ADDS MEXICAN PRECISION
A supplier of high-precision injection molding parts, tooling, components, and assemblies has opened an ultramodern facility in a town that’s just a couple of hours northwest of Mexico City, to meet the regional demands for its services. The town is called Querétaro, and the molder is GW Plastics (Bethel, VT).

Located in one of the newest industrial parks in the region, the plant will accommodate up to 25 presses, including insert molding machines, though it has the capacity for 40. Space also has been provided for a Class 100,000 cleanroom to serve what company sources describe as a growing medical customer base in the region.—CK

ENGEL GROWS, WILL OPEN IN CHINA
Molding systems supplier Engel closed its financial year on March 31, 2005 with $586.3 million ($736.6 million) in sales, an 8.9% increase over the 2003-2004 fiscal year. The number of machines sold grew from 2700 to about 3000. The company also said it has begun initial work on a site in Shanghai for its first large-machine plant in Asia, which will begin production in mid-2006. The renewal of the flood-damaged headquarters factory in Schwertberg, Austria has been completed with the opening of a continuous-flow, rail-guided assembly line designed to shorten delivery times for small and medium-sized molding machines.

Last year’s sales growth came from strong markets in Germany, Austria, and Italy, the new EU countries in Eastern Europe, and Russia. Asian business was slightly below original expectations, but North America showed a “slight recovery.”

Georg Tinschert, president of Engel Austria, the group’s largest operating company, blamed the continued weakness of the U.S. dollar for the generally weak business in both North America and Asia. He was also cautious regarding current fiscal year earnings, citing a drop in first-quarter orders and a continued reluctance to invest by many molders.

He expects growth in the new EU countries, Asia, and the United States to make up for continuing weakness in Western Europe, and says Engel is aiming for at least the same level of sales as in the just-closed fiscal year.—RN

AN AWARD-WINNING MOLDER
If you’re recognized as a “Partner-level” supplier by John Deere, you’ve reportedly earned the most prestigious distinction that the company has to offer any participant in its “Achieving Excellence Program.”

John Deere Horicon Works operation recently recognized Steinwall Inc. (Minneapolis, MN), a family-owned custom molder, as a Partner-level supplier for services rendered in 2004.

Maureen Steinwall, president, accepted the award. She said Steinwall Inc.’s cost-saving plans, its proactive quality program, its full-service initiatives, and the teamwork of its employees were instrumental to its winning such impressive customer recognition.

But that wasn’t the only award Steinwall Inc. has won in recent times. It also was named one of the top 500 women-owned businesses in the United States by DiversityBusiness.com, a multicultural business-to-business online portal. Steinwall was among those honored at a gala ceremony this spring held at the Foxwoods Resort Casino in Connecticut.—CK

SHORT SHOTS
Saying it expects double-digit growth in China and Asia generally in the future, Rhodia Polyamide has broken ground on a second engineering plastics compounding plant at its Shanghai, China site. The 40,000-ton facility will bring the company’s Asian capacity to 80,000 tons annually. It will supply the full spectrum of the company’s compounded products, including Technyl, Technyl Star, Technyl Alloy, and others. Rhodia Polyamide’s Shanghai site also hosts R&D and sales operations.

Lanxess says it will start up a new compounding facility for its Durethan PA and Pocan polyester materials at Wuxi, China in Q1 2006. The Lanxess Wuxi Chemicals Ltd. site, which is northwest of Shanghai, will be enlarged in stages as needed. Lanxess says that market growth for engineering plastics in China is currently around 13% and about 8% in Asia overall. Lanxess has been serving the Asian market from its plant in Krefeld, Germany.

As of July 1, 2005, DuPont Dow Elastomers, the joint venture of DuPont and Dow, was to become a wholly owned subsidiary of DuPont. The company’s new name is DuPont Performance Elastomers.

Bulk Molding Compounds Inc. (BMCI, West Chicago, IL) has acquired the assets and operations of Rogers Engineering Corp., a manufacturer of custom thermoset polyester molding compounds and a custom molder with three facilities in Illinois and Texas. BMCI will continue to serve all former Rogers customers.

Cognex Corp. (Natick, MA), suppliers of machine vision sensors through direct sales by more than 40 mostly North American distributors, has gained immediate access to more than 150 worldwide distributors through its acquisition of DVT Corp. (Duluth, GA). Cognex plans to maintain DVT’s current facility and to sell and support DVT’s machine vision products.

Sources at Milacron Inc. (Batavia, OH) say that its new joint venture in China with an automotive molder called Jiangnan Mould & Plastic Technology Co. Ltd. recently delivered its first made-in-China injection press, a 1000-metric-ton, two-platen Maxima. Production is already under way for several more large Maximas at Milacron Plastics Machinery (Jiangyin) Co. Ltd., as the joint venture is called. For the time being, Milacron reportedly has no plan to export its made-in-China machines. Milacron also builds machines in India, Europe, and Ohio.

It’s only been on the market since last fall, but Netstal sources say they’ve already sold 40 of their Swiss-built Elion 1750 all-electrics. An undisclosed European medical molder reportedly purchased 11 of them to put in its cleanroom and may still buy a couple more. Elions are available from to 500 to 1750 kN (55 to 192.5 tons)