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November 22, 2006

12 Min Read
E-Weekly News Briefs, Nov. 20-24

China falls short of WTO mandates

The U.S. China Economic and Security Commission characterized China’s fulfillment of actions required by World Trade Organization membership as falling “woefully short” some five years after it joined the global trade consortium. Part of a 234-page report with 44 recommendations for Congressional action, the annual report from the bipartisan commission tasked with tracking U.S./China relations on a variety of fronts was highly critical of China’s aggressive posture towards Taiwan, its currency manipulation, lax oversight of counterfeiting, and persistent violations of human, worker, religious freedom, and free press rights.

“While China is a global actor, its sense of responsibility has not kept up with its expanding power,” Larry Wortzel, commission chairman, said in a release.

The report stated that China’s currency manipulation equates to a price subsidy of 40% for Chinese exporters and described counterfeiting of goods ranging from DVDs to business software to pharmaceuticals to automobile parts as “rampant”.

In terms of national security, the commission was concerned with China’s pursuit of oil and natural resources from nations like Iran, Burma, and Sudan, and it found the dependence of the U.S. military on an increasing number of parts for major weapons and transportation systems from foreign countries, including China, troubling. The report will be posted on the commission’s web site (www.uscc.gov) the week of Nov. 20.

Smart Car struggles to satisfy U.S. emission, safety standards

The plastics-heavy Smart Car, which has been available in Europe since 1998 and is scheduled to come to the U.S. in the next two years, is facing issues meeting American safety and emission standards. As a result, Smart Cars of America is distancing itself from Smart ForTwo models on the streets now, which have been modified to meet the standards. Those vehicles are so-called gray-market cars, meaning buyers won’t be able to get a car history to determine the auto’s origins. In addition, even with modifications, Smart Cars of America says modified versions might still fail standards tests in states like California, New York, Massachusetts, Vermont, and Maine.

United Auto Group, which will distribute the cars in the U.S. for DaimlerChrysler, has said the base price will be $11,000. People buying gray-market versions are paying as much as $30,000 for the small, two-door vehicle which gets around 46 miles-per-gallon (mpg) in the city and 70 mpg on the highway. DaimlerChrysler has yet to make money on the auto.

Nypro lands cartridge business

Global contract manufacturer Nypro (Clinton, MA) has signed on with Direct Methanol Fuel Cell Corp. (DMFCP; Pasadena, CA) to supply cartridges for that company’s methanol fuel cells for use in consumer electronics like cell phones and lap tops (See October 2006 MPW for initial report). DMFCC has multiple intellectual property protections for the technology, and is working with Samsung and LG of Korea and Toshiba, NEC, Hitachi, and Sanyo of Japan to commercialize the product in the next year.

U.S. good to Japanese manufacturing

The so-called Japanese transplant automotive OEMs—Nissan, Toyota, Honda—aren’t the only manufacturing firms from that country to enjoy success in the U.S. According to the Japan External Trade Organization’s (JETRO) annual survey of Japanese manufacturers doing business in the U.S., which garnered responses from 621 companies, 80.9% of those companies expect operating profits in 2006, up 5.2% from 2005 to an all-time high. Only 8.6% are expecting an operating loss, which sets a record low for the fourth straight year, and 65.4% said the profits were driven by increased sales in the U.S. market. In terms of capital investment, transportation equipment (66.6%) and plastics industries (64.7%) showed the highest rates, with even more potential spending in 2007. More than 60% of the companies have a U.S. domestic procurement ratio of 51%, and 41.8% will be hiring in 2007, up from 11.4% for the last survey. Much of the manufacturing is tied to those transplant automotive OEMs, with 43% of the transportation-related facilities in four midwestern states: Ohio, Indiana, Michigan, and Illinois.

Honeywell’s Knight elected to packaging board

Honeywell Specialty Materials (Morristown, NJ) announced that Rick Knight has been elected to serve on the board of directors for the Healthcare Compliance Packaging Council (HCPC). The appointment is a two-year term. “I am honored to be part of the HCPC’s continued overall mission to promote the benefits of unit dose blister packaging, particularly in the areas of improved patient adherence and reductions in adverse drug incidents,” said Knight, global business manager for Honeywell’s healthcare specialty films business. “Honeywell is committed to educating the entire packaging value chain about the unique benefits of thermoformed blister packaging. We are dedicated to ensuring that pharma receives the right packaging material for the right medication at the lowest possible total cost.”

Honeywell recently hosted the HCPC 2006 Showcase at its Morristown headquarters. The one-day event, which was attended by major pharmaceutical companies as well as healthcare packaging suppliers, converters, and other industry specialists, focused on the future of healthcare packaging and cost-reduction strategies.

Honeywell manufactures and supplies Aclar film, a polychlorotrifluoroethylene (PCTFE), which is used widely in pharmaceutical and medical packaging.

The Plastics Exchange week in review

Polyethylene prices held steady, with producers sticking to their generic prime prices, but offgrade prices moved lower, drawing buyers who kept them from slipping more. Strong export demand should keep prices steady going forward. Natural gas was back up to $8.10/mm Btu, but ethylene contracts still settled down $0.04/lb, for a November price of $0.445/lb.

Polypropylene prices moved lower, thanks in part to large producer inventories of generic prime and widespec grades. Transactional volume has increased, as converters have depleted inventories, and buyers have returned. Propylene monomer held steady despite a fall in crude oil, and the December futures contract was down $3.75 to below $56/barrel.

In polystyrene, spot offers were few, with a scarcity of prime cars, but railcars of offgrade were available, and resellers have also put resin on the market. Benzene prices for November and December were down to $3.25/gallon, boosting prospects for lower styrene monomer. For more information, including historical price charts, go to www.theplasticsexchange.com.

Suppliers to sustainable building have new, online directory

Understanding that collaboration early on among all stakeholders is key to construction success and feeding off the growing interest in sustainable building, The Beam (Cambridge, MA) e-media company launched an online residential builder directory during the U.S. Green Building Council’s recent Greenbuild exposition and conference (Denver; Nov. 15-17). Patti Purcell, Beam CEO, said the site, www.greenbuildingblocks.com, has been prepopulated with 2000 firms, and that until March 31, companies will be able to create a free listing. Purcell said in 18 months of research, her company identified three main problems for suppliers to the sustainable construction industry: finding products, differentiating their business, and finding team members in different disciplines. The site will have 15 categories and users can search by capabilities or products. Companies that register will be able to show project photos and descriptions, as well as list partnerships and key vendor relationships; display professional licenses and certifications; and offer customer testimonials.

High-visibility packaging demand to increase

U.S. demand for high-visibility packaging, including clamshell, blister, and other types, is projected to expand 5.1% annually to $8.5 billion in 2010, according to a new market report from The Freedonia Group, a Cleveland-based industry market research firm. This represents a market size of 32 billion units or 900-million lb of plastic. Gains will be driven by favorable advances in consumer spending along with the growing influence of mass-market retailers, which tend to favor blister packs, clamshells, and other high-visibility containers for their theft and tamper deterrence and ability to effectively showcase products. Further growth will be limited by the rising volume of offshore production and packaging of products such as toys, games, sporting goods, hardware, and electronics.

The best opportunities are anticipated for carded blister packs and clamshells, which together accounted for 58% of high-visibility packaging in 2005. Clamshell demand is bolstered by strong gains in food markets such as fresh produce and prepared foods. Additionally, clamshells will benefit from their upscale appearance; thick, rigid construction, which is particularly suited to larger, heavier items; and ability to deter theft and tampering.

Carded blister pack demand will be stimulated by healthy gains for pharmaceutical blister packs resulting from regulatory issues associated with unit-dose packaging. Windowed packaging demand will increase at below-average pace as a result of slow growth for windowed cartons in baked goods, a major application. Skin packaging will register the slowest growth based on declining demand for carded skin packs as a result of higher production costs and the shift to offshore production in key applications like hardware.

IMS offers new catalog

IMS Company (Chagrin Falls, OH) says its new, 733-page catalogue for 2007/08 is available. The new catalog feature includes 53 new products plus 19 additions to existing lines; IMS offers a very wide range of accessory supplies and equipment to the plastics processing industry.

IMS has also scattered "Tech Tips" throughout the catalog to provide one more reference tool to further assist buyers in their decisions. Also new in the 2007/08 catalog is the placement of all aerosol products (Mold Releases and Mold Care Products) in one section. The IMS catalog now also has Extrusion Supplies in an individual section.

To download individual sections of the 2007/08 catalog in PDF format, go to www.imscompany.com, email [email protected] or contact IMS Company, 10373 Stafford Road, Chagrin Falls, OH 44023-5296,T: 800-537-5375, F: 888-288-6900.

Steel supplier changes name, not mission

Swiss Steel International NA (Carol Stream, IL) is changing its name to Schmolz,Bickenbach USA Inc. and Schmolz,Bickenbach Canada Inc., effective Jan. 1, 2007, as part of a global corporate branding by the parent firm.

“There is no change of ownership. This is simply a desire to unify the global corporate identity of the companies,” said Tony Elfstrom, president and CEO of Schmolz+Bickenbach USA and Canada. Swiss Steel Intl. was acquired more than one year ago by the new owner. The firm supplies tooling steel to a number of industries including plastics moldmaking.

Schmolz+Bickenbach USA will open a new tooling materials distribution facility in the Greenville / Spartanburg, SC area in January 2007. The company already has North American processing and distribution facilities in Chicago, Cleveland, Detroit, Minneapolis, and Toronto as well as a heat treatment plant in Windsor, Ontario.

Graham Partners completes recapitalization of Infiltrator Systems

Graham Partners (Philadelphia, PA) announced that it was able to return more than 98% of the original equity invested in Infiltrator Systems (Old Saybrook, CT), with two manufacturing plants in Winchester, KY, and Ogden, UT. The investment platform was part of a $215 million recapitalization transaction. Graham Partners II acquired Infiltrator just over a year ago in September 2005. Infiltrator is a leading manufacturer of plastic chambers for onsite wastewater management systems in the septic leach field and storm water markets. It also directly markets these systems. The Company has experienced a strong demand for its products as the market converts from traditional gravel-and-pipe leach-field systems to the plastic chamber systems Infiltrator manufactures, almost doubling its EBITDA in just over a year.


Fluoropolymers supplier Dyneon LLC (Oakdale, MN) has signed an agreement with Chemtech Specialties Inc. to serve as an authorized distributor of its additive products in the northeastern U.S. Dyneon, a 3M company, offers specialty additives for use in engineering plastics to provide wear and mar resistance, as well as antidrip properties.

Messe Düsseldorf’s packaging event, interpack, is accepting exhibitor applications for the April 2008 exposition, with a deadline for applications of February 28, 2007. The event will benefit from $24 million in upgrades to the fairgrounds in Düsseldorf, including a new hall—8b—which will occupy approximately 160,000 sq ft at the north entrance, bringing gross exhibit space to 2.85 million sq ft. In addition, hall 14 is receiving a new metal façade, large glass entrance, and skylights. Technical facilities will be upgraded, including air conditioning, and a new glass-covered walkway will link Halls 14 and 15 to the east entrance.

Names in the news

Teknor Apex’s (Pawtucket, RI) thermoplastic elastomers (TPE) division and its colorant business have announced a series of personnel moves. The TPE unit has named Paul Burke as the business manager for North America. Burke has been with Teknor Apex since 1988 in positions ranging from process engineer to plant manager. He was most recently the VP of manufacturing. P. Andrew Claytor has been named sales manager for the TPE business. He has been the national sales manager since 2004 and joined the company in 2001.

Teknor Color Co. has named Lynne Daughters as the sales representative for color concentrates in Texas, Oklahoma, Louisiana, and western Arkansas. Daughters came to Teknor from Plastimin LLC, and prior to that, Chevron Phillips Chemical Co.

LPKF Laser & Electronics (Wilsonville, OR) announced the promotion of Jim Greene to the position of vice president, sales & marketing, for North America. He has been with the firm since 2001. LPKF makes rapid PCB prototyping equipment, as well as production laser systems for applications including flex circuit, laser plastic welding, and molded interconnect devices (MID). Technology from LPKF enables circuit structures to be directly created on the surface of single-component moldings via laser direct structuring (LDS) and subsequent additive metallization. Find more on LPKF in the October 2003 issue of MPW.

Weekly futures activity from the LME

Futures trading of linear low-density polyethylene (LLDPE) and polypropylene (PP) on the London Metal Exchange (LME) for the week of Nov. 13-17 saw a low price for LLDPE of $1080/tonne set on Tuesday, Nov. 14 and Wednesday, Nov. 15 for December buyers. LLDPE’s high of $1140/tonne was reached on Monday, Nov. 13, and Friday, Nov. 17, for February sellers.

For PP, a low price of $1100/tonne was reached on Monday, Nov. 13, for December buyers. The high of $1155/tonne was reached on Thursday, Nov. 16, for February sellers.


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