Rotomolding: Global slowdown hits rotomolders down under

“Despite attempts by the national government to reduce the impact of the global financial crisis,” Donlan said, “rotomolders around the world are reporting a general slow down in their orders.” Donlan estimates that there are approximately 220 rotomolders in Australia of various sizes, with the top-five local markets being water tanks, pleasure craft, agricultural products, point-of-sale displays, and “road furniture” or various construction signage, blockades, etc.

Shifts within the largest market—water tanks—including the pursuit of custom molding by businesses once solely focused on the creation of tanks, has caused further disruptions. “As tank companies begin to pursue new custom molding contracts and compete with experienced custom molders,” Donlan said, “the industry is likely to be even further destabilized. It’s more vital than ever that those companies planning to diversify into other products, without the knowledge or experience, avoid the risk of costly losses to themselves and damage to our industry reputation in the pursuit of short-term gains.”

Donlan said ARMA has already seen the closure of several rotomolders due to falling sales, particularly in water tanks. Donlan says that drought conditions have kept the tank market in Victoria reasonably strong, while New South Wales continues slow growth, along with steady markets in South Australia, Western Australia, and Tasmania. In New Zealand, the North Island has remained fairly strong, but tightening credit has pushed building approvals down by 60%, with an expected “flow on effect” for Kiwi rotomolders.

Potentially exacerbating market weakness, Queensland announced that environmental license costs would be lifted from $450 up to $10,800 annually, hitting rotomolders with added fees at a time when tight margins have dramatically cut operating flexibility. In these difficult times, Donlan said ARMA is advising members to maintain focus on improving their operations in a bid to ride out the financial storm. “More than ever, the time is right for our member companies to focus on training and retaining quality staff and absorbing as much information as possible,” Donlan said, “both from the association and from the industry itself, to have a good understanding of what’s happening in your own markets.”—[email protected]