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Articles from 2004 In February


Juice bottlers take next steps in evolution

A switch to PET, captive processing, improved barrier, and easier-to-guzzle closure sizing: Package evolution at soft drinks companies Pampryl and Eckes-Granini sheds light on trends in beverage bottling.

After seven years of using Barex resins from BP Chemicals (Naperville, IL) for its Pampryl brand juice bottles, French juice bottler Pampryl, part of Schweppes-Cadbury group member Orangina, last year completed its switch to a new bottle and closure. The transition is symptomatic of the changes in this market in recent years. The move to PET—especially with a barrier layer—from glass, Barex, or other materials is one of the most common in this market. Joining Pampryl in PET last summer was German bottler Eckes-Granini, which left its signature glass bottles for PET it blows itself.

Another significant trend evident at both of these firms is their decision to stretch blowmold their own bottles. Both purchase AmGuard multilayer PET barrier preforms from Amcor PET Packaging''s plant in Brecht, Belgium. Amcor''s three-layer preforms use nylon in the barrier layer.

Driving the transition

Pampryl began extrusion blowmolding Barex bottles in May 1996 as it transitioned from glass to plastic for 11 of its brands. At the time, the bottler said Barex topped both PET and PVC for barrier performance. That PVC was even in the running shows how far the industry has progressed since then. The AmGuard bottles are captively processed on a Sidel SBO10 stretch blowmolding unit at the Pampryl plant in Nuits-Saint-Georges, France.

Barex is a rubber-modified copolymer of acrylonitrile and methylacrylate that can be extrusion blowmolded to offer chemical and oxygen barrier resistance in mono- or multilayer packages. Amcor officials say a number of factors drove the transition at Pampryl away from Barex.

"The clarity of PET won out over Barex," says Caroline Herbst, new product manager at Amcor. "Barex bottles were hazier than PET ones. Also, Barex bottles are more expensive than PET, by a multiple," she says. In addition, she claims the gas barrier of the AmGuard bottles is superior to those of Barex packaging. Pampryl officials would not confirm reasons for the change.

Barex officials reserve comment on the Pampryl account but argue Barex is a better material for juices. Amy Flancon, Barex marketing manager, says, "We see the advantage of Barex over PET in that it offers a barrier in a single layer. Also, Barex''s very inert nature means there is no chance of flavor scalping."

Still, she and another Barex official, Neil Quinn, admit the material is no longer as common for juice packaging as it once was, though demand has soared in more demanding applications such as cosmetics and pharmaceutical packaging.

Pampryl was the only user of Barex for fruit juice in Europe. Quinn says that even as Pampryl left the material, another bottler—Jumex, in Mexico—began using the material for extrusion blowmolded 1-liter bottles.

Granini began by blowing bottles that contained Amcor''s Bind-Ox oxygen scavenging system, and is now transitioning to the more recently developed Bind-Ox+; Pampryl too is transitioning to the preforms with improved oxygen scavenging. The new version is more resistant to delamination, explains Herbst.

"We''ve improved the bonding between the PET inner and outer layers and the polyamide center layer." Amcor will not reveal how, referring only to "an extra step in the coinjection" molding of preforms. Cycle time is reportedly unaffected.

The bottler''s exit from glass includes its hohes c brand, the best-selling fruit juice in Europe, among others. Bottles are stretch blown at its plant in Fallingbostel, Germany, using a SIG Corpoplast Blomax 18/III unit, with a rated output of 27,000 bottles per hour.

Caps for sale

The Pampryl bottle switch coincided with a transition from compression molded closures with foam wadding inserts to single-piece, injection molded, 38-mm, three-thread versions from Bericap (Budenheim, Germany).

Anne-Cecile Ropele, new product marketing manager at Bericap France, says Bericap won the business from another processor. Once the bottler chose a new bottle type, new closures were a necessity, she explains: "The closure we supply would not have worked with [a blown neck finish]; ours is a bore seal closure which fits PET injected neck finishes."

Benefits for Pampryl are numerous, she says. Topping them is the switch from two-piece to one-piece units with tamper-evident band, eliminating the need for a sleeve to be added after capping. Also, she says, the new closures are better for consumers, since seals of two-piece closures are loosened as soon as a consumer opens a bottle. Ropele says the injection molded closures allow less oxygen permeation so that juice shelf life is improved.

Granini switched from metal twist caps on its glass bottles to the same-sized Bericap closures designed for use on bottles sealed with an aluminum foil strip.

The 38-mm size is gaining appreciably in beverage packaging, say experts at a number of closure molders. An official at closure molder Alcoa CSI (Indianapolis, IN) says the trend is especially notable for single-serve containers: consumers are willing to pay more for these anyway, so the cost of the slightly larger closure is not as important as ease of drinking.

Plus, she says, the size provides the best taste and smell due to the amount of oxygen allowed in the container. Petra Bauschke, marketing manager at closure molder Amcor Whitecap (Hanover, Germany), says her firm sees the same trend for the same reasons, plus easier pouring. In North America, she says, "There used to be many more 43-mm closures, but now there too we see an increase in 38-mm sizes."

Matthew Defosse [email protected]

Contact information

Alcoa CSI     www.alcoacsi.com
Amcor PET Packaging    www.amcor.com
Amcor Whitecap    www.amcorwhitecap.com
Barex    www.barex.com
Bericap    www.bericap.com
Sidel    www.sidel.com
SIG Corpoplast    www.sigcorpoplast.com

ABS beats metals in harsh borehole environment

RESINS/COMPOUNDS

U.K.-based oilfield equipment manufacturer Brunel Oilfield Services now uses a specially-made grade of long glass fiber-reinforced Verton-brand ABS to make its Ezee-Glider 2000 centralizers. These keep steel pipe lining wells centered in a borehole so that a uniform space is available around the pipe. Cement slurry is then poured into this space to prevent the borehole from collapsing. Available since last year, Verton is made by LNP using Cycolac ABS supplied by parent firm GE Plastics. Brunel says its centralizers weigh three to six times less than aluminum or zinc alloy units. The plastic parts are immune to corrosion and offer heat resistance to 200C. Abrasion resistance is better than metals, leading to greater wear endurance and lower friction during installation. LNP Engineering Plastics, Bergen op Zoom, The Netherlands +31 164 29 16 05; www.lnp.com

EPS grades offer fast cycle, low moisture absorption

Suspension polymerized expandable polystyrene (EPS) grade TPC422FC has an average bead size of .5 to 7 mm with a typical density of 20 to 35 kg/cu m. It is designed for fast cycling of molded parts with walls 6 to 10 mm thick with good surface finish and high strength. Grade TPC426WP is meant for applications requiring very low water absorption. Iran Petrochemical Commercial Co. (IPCC), Tehran, Iran +98 21 8788987; www.nipc.net

Clear compound makes grab for bathroom fixtures'' market

Acrylite H12 molding and extrusion compound is marketed for use in clear bathroom fixtures such as bathtub bars and whirlpool grab handles. It offers 92% light transmission and haze of less than 1%. Good processability leads to elimination of inclusions or marks during processing. Tensile strength is 9500 psi (65.5 MPa) and water absorption is .3% or less. Compounds are clear or offered as translucent or colored opaque. It is available in North America only. Cyro Industries, Rockaway, NJ, USA +1 800-631-5384; www.cyro.com

Self-reacting materials protect wiring

A range of negative temperature coefficient (NTC) PVC extrusion compounds can be used to produce thinner, lower-cost electric cables than is normally possible with PVC. Moreover, the CT99/127 materials, developed by Dugdale Plc, form part of a system to sense hot spots in cable jacketing and help shut down electrical systems once a danger spot is determined.

The NTC compounds experience a rapid decrease in electrical resistance at temperatures between 80 and 100C. This characteristic can be used to detect localized overheating in cable networks, says John Salmon, marketing director. This is achieved through connection to an electronic measuring device that monitors resistance between two concentric wires in a co-axial cable insulated by the NTC compound. When the resistance drops to a predetermined level, the device either switches the equipment off or triggers an alarm in the cable network.

These special low-melt grades (melting occurs at about 120C) have potential to reduce cable size, says Salmon, which should impact both manufacturing and installation costs. In a traditional cable, an LDPE insulating layer isolates the wires. This is covered by a PVC outer layer. If overheating occurs, the LDPE melts, the wires touch and trip the circuit breaker or fuse.

Because of its low melting point, the NTC PVC compound can be monitored electronically. Since this material melts at approximately the same temperature as LDPE, the PE layer can be eliminated to produce a thinner, more flexible cable, Salmon says. Initially the materials will be offered in natural, but colors can be produced to customer specifications. Dugdale Plc, Sowerby Bridge, U.K. +44 1422 832501; www.dugdaleplc.com

RESINS/COMPOUNDS

TPEs meet new food contact requirements

Three new grades of Santoprene meet the latest EU Directive 2002/72/EC requirements for packaging of aqueous-based foods. They are available in black and colorable grades in Shore A hardness of 55, 64 and 73. Typical applications include cap liners (pictured) on containers and cutting boards. The materials are microwave-, freezer- and dishwasher-safe. Advanced Elastomer Systems, Brussels, Belgium +32 2 706331; www.santoprene.com

HDPE blowmolding grade gives stiffness

Now available in the Middle East is Marlex EHM 6007, a .7-melt index HDPE intended for dairy and beverage bottle packaging. This blowmolding grade has good impact strength and stiffness. Tensile strength at yield is 30 MPa. QChem is a joint venture partner with Chevron Phillips Chemical Co., owner of the Marlex brand. QChem, Doha, Qatar +974 4837379; www.qchen.com.qa

Single-site catalyst PE has high strength

Surpass HPs900C film-grade octene copolymer LLDPE offers high toughness, tear strength and clarity. It has a low gel formation and good sealing properties. Film tensile strength is 49 MPa in machine direction and 43 MPa in the transverse. Made using a non-metallocene single-site catalyst, it is said to be easier to process than metallocene grades and it reportedly decreases extruder power consumption. Nova Chemicals (International) SA, Fribourg, Switzerland +41 26 4265606; www.novachem.com

TPEs stick to nylons

Tekbond 6700 TPEs are said to achieve stronger bonds to nylons than currently available styrenic TPEs and TPVs. Handles, grips and other parts can be made using insert molding rather than more complex and costly two-shot processes in which bonding is assisted by the substrate''s heat. They bond well to glass-filled and unfilled nylon 6 and 66, even when the substrate is at room temperature. Supplier Teknor Apex does not identify the polymer technology used, but says it is completely different from its 6000 Series, which can be used for overmolding. Grades have Shore A hardness of 45, 55 and 65. They are available in natural, pre-colored, and UV-stabilized versions. Teknor Apex Co., Thermoplastic Elastomer Div., Pawtucket, RI, USA +1 401-725-8000; www.teknorapex.com

Flouroelastomer offers chemical resistance

Combining chemical and thermal resistance for highly caustic applications, a new fluoroelastomer is said to be largely impervious to hydrocarbon oils and acids. Viton Extreme TBR-605CS, a TFE/propylene copolymer, is based on advanced polymer architecture and uses a new bisphenol cure site.

Supplier DuPont Dow says that compared to existing TFE/propylene grades, Viton Extreme TBR-605CS offers lower volume swell in hydrocarbon oils and improved processing, compression set resistance, metal adhesion and steam resistance. These characteristics make this thermoset elastomer appropriate for applications in oil and gas exploration, chemical processing, utilities, automotive products, and off-road markets.

Also new, grade ETP-600S offers designers a material with improved performance and longer life in seals. It resists acids, hydrocarbons, and low-molecular-weight esters, ketones and aldehydes. Other advantages include low-temperature flexibility, protection against base attack and volume changes in caustic solutions, amines and hot water. In terms of processing, DuPont Dow says the material has a better flow, faster curing and easier mold release than previous grades. DuPont Dow Elastomers, Wilmington, DE, USA +1 302-792-4347; www.dupont-dow.com

LCP makes entry into laser direct structuring

A new licensing agreement teams an LCP with laser direct structuring (LDS) technology to create single-component, injection molded circuit carriers, commonly known as molded interconnect devices (MIDs), that integrate conductive paths directly onto components. Ticona and LPKF Laser & Electronics have made a deal that allows Ticona to modify its Vectra LCP for use in LPKF''s LDS process. An alternative to traditional circuit boards, MIDs allow for smaller assemblies and greater design flexibility. LPKF previously obtained LDS deals with Bayer and Degussa using PBT (see October 2003 MP/MPI, p. 10 for initial report).

The process works by using a standard molding process to create components made from Vectra, which have the designed interconnect pattern written directly onto the surface by the laser. The conductive plating only adheres to sections of the part that have been activated by the laser. Also, due to the high temperature resistance, the circuit structures on the LCP are solderable. Target markets include mobile communication devices, hearing aids and sensory technology for automobile electronics. LPKF says teaming with Ticona automatically establishes a worldwide presence for the technology. LPKF Laser & Electronics, Wilsonville, OR, USA +1 503-454-4233; c. Ticona GmbH, Kelsterbach, Germany +49-180-5842662; www.ticona-eu.com

ADDITIVES

Concentrate helps process foam on standard extruders

A new line of water-filled concentrates used as physical blowing agents can be used on standard extrusion equipment. The patent-pending technology can replace high-pressure water-injection systems on extruders with L/D ratios as low as 24:1. CellFoam-H comes in pellet or powder form and can be dosed like conventional additive concentrates. In addition to being environmentally friendly, it eliminates the need to install and maintain liquid injection systems, reducing a plant''s overall costs.

It can contain water levels to 60% and is available in polyolefins and nylon 6. CellFoam-H has been used to foam Santoprene TPV, since Santoprene''s producer, Advanced Elastomer Systems, purchased a license from Polymer 5 for this technology. Potential applications include automotive and commercial weather seals, packaging foam, insulation, gaskets, and footwear. Polymer 5, Akron, OH, USA +1 330-920-9353; www.polymer5.com

Natural fibers' growing needs

The use of natural fibers is still in its infancy—but no longer a novelty. To progress further, however, natural fibers will need help in the form of a true injection moldable grade and viable alternatives to now-dominant flax.

Natural fibers'' use as a reinforcement in plastics for automotive applications is no longer a novelty. Recently publicized results of a survey of the material''s use in the German and Austrian automotive industry shows processors in those countries consumed 17,200 tonnes of flax, hemp, and exotic fibers (jute, kenaf, and others) in 2002, up from 15,100 tonnes in 2000 and despite lower total car build rates.

Despite rapid growth, the market is still small. The survey, prepared by nova-Institute GmbH (Furth, Germany), does not account for cotton or wood fibers. Since 1996, when the Institute started the survey, consumption has increased about 22%/yr and shows little sign of slowing, according to nova''s Michael Karus. Between 5 and 10 kg of natural fibers are used in cars which contain such fibers, making the potential market (if every vehicle made in Europe contained this amount) 80,000 to 160,000 tonnes/yr, he says. In comparison, about 60,000 tonnes/yr of glass fiber are used by the European auto industry, he says.

Fiber prices range from €.55 to €.62/kg, for a total market of only about €10 million in Germany and Austria last year and only about €15 million for all of Europe. Despite pricing pressures from larger Tier Ones, Karus reckons fiber suppliers can prosper if they meet new requirements, especially the demand for injection moldable grades of natural fiber. Until now, only about 5% of natural fibers are consumed in injection molded parts; the rest are compression molded or used in other large press processing.

The survey by nova points to a sharp decline in processing of wood fiber-reinforced thermoset parts by automotive suppliers, as these are replaced by thermoplastic (especially polypropylene) parts reinforced with the natural fibers cited in the survey. About 30,000 to 40,000 tonnes/yr of wood fibers are used in automotive parts in Europe, he estimates.

Looking beyond markets

Some French fiber suppliers have decided that identifying potential markets was not enough; these have vertically integrated by forming their own processing facilities. French processor Techni Lin (Yvetot) uses flax to reinforce PP interior door panels thermoformed for vehicles, including the Opel Corsa and Citroen C5. The company was founded in 1995 by a cooperative of French flax farmers looking new outlets for their crop. The firm is seeing interest grow outside the automotive industry, with one designer choosing the compound for furniture. Another French farmers'' cooperative, in Chanvriere de l''Aube and specializing in hemp, formed compounder Agro Fibres Technologies Plasturgie (AFT; Plasturgie, Fortaine Les Dijon) in January 2001.

"We are still at the research and development stage with it, but the first plastics reinforced with hemp fiber have already been tested and the first products should be appearing shortly," says AFT Manager Gerard Mougin. Hemp costs about half that of glass fibers, according to the cooperative.

Speaking at last fall''s AVK-TV composites conference in Germany, fibers trader Christian Clasen, one of the owners of trading firm Wilhelm G. Clasen (Hamburg, Germany), cautioned that if processors continue to focus on flax to the exclusion of other natural fibers, then flax output in Europe almost certainly will not meet the automotive industry''s predicted demand for 2010. According to the nova survey, flax accounts for more than 50% of all natural fiber consumption in Europe. Additionally, argues Clasen, flax is more expensive, with a current €.10/kg premium over comparative natural fibers, and prices fluctuate wildly due to climate variations and occasional demand from the fashion industry. Prices in Europe will leap when EU subsidies are withdrawn in 2005, he predicts.

Flax alternatives

Clasen says alternative fibers are readily available as world output of non-textile natural fibers (not including wood, cotton, silk, and wool) was about 5 million tonnes last year, with jute and kenaf accounting for 60% of that.

Although Clasen admits that jute and kenaf have done poorly compared to flax in tests of tensile strength and elongation, he says these tests ignored particularly strong grades of jute and kenaf. Plus, he notes, natural oils in flax cause it to create odor and fog problems after processing. Further, its grayish color makes it unattractive for most visible parts—challenges not found with competing fibers.

The interest and need for natural fiber reinforcement information prompted development of www.n-fibrebase.net by four research institutes, among them nova. The site, offered in English, French, and German, includes a reference data base with information on commercial and developmental parts; a market database listing products and their dealers and suppliers; and pricing charts for flax and hemp, using information obtained from eight European natural fiber suppliers.

Matthew Defosse [email protected]

Contact information

N-Fibrebase:    www.n-FiberBase.net
nova Institute:    www.nova-institut.de
Wilhelm G. Clasen:    www.wgc.de

High risks in Chinese mold forays

Injection molds made in Germany have a reputation for quality, but they take a beating on price. Following customers to China is all the rage, but looking good on paper doesn''t mean it''s a done deal.

German mold and toolmakers should pay more attention that they aren''t passed over by aspiring Chinese competitors," says Claus D. Gruschka, publisher of VDWF Aktuell, the magazine of the Assn. of German Mold and Tool Builders (VDWF; Leonberg, Germany). "When the [customer] moves production and assembly to markets like China, then mold production in Germany is unnecessary. Moldmakers need to consider following their customers."

Gruschka says that mold and toolmaking is seeing 12% to 15% annual growth in China now. But he and others warn that Chinese business practices are significantly different from those experienced throughout Europe or North American.

On the one hand, as pointed out by Barbara Stobbe, project manager and analyst at Euro Asia Consulting (EAC; Munich, Germany), the country offers moldmakers both domestic and export opportunities. The market there could equal that of Germany by 2011. At certain locations in China, the government offers 15% to 24% tax reductions from the start of a project. The first two years of production after the break-even point are tax free, and thereafter foreign investors get a 50% tax break, she says.

Getting real

But on the other hand, "a moldmaker who believes he can start up operations in China and at the same time continue his usual operations [back home] should not even consider taking the first step. This is like no other market in the world and it requires one''s full-time attention," Stobbe says. Sending an employee to China for one or two years makes little sense since in that time they will not learn enough about the market or the people. She also advises against employing "dubious, local middle men."

Speaking at a forum organized by VDWF in December, Stobbe said China''s politicians are promoting moldmaking by offering foreign investors reduced import duty on quality mold materials and precision equipment, lifting currency exchange rules, and eliminating export quotas. However, these could be balanced out in the near future. China has been slow to implement World Trade Organization (WTO) regulations, intensifying efforts to protect local-Chinese producers, and possibly eliminating preferential tax treatment for foreign subsidiaries.

For small- to medium-sized moldmakers interested in establishing a presence in China, Stobbe says a pool of like-minded companies such as a moldmaker, processor, and packaging converter, could be the best way to spread risk and minimize the initial investment. For larger moldmakers, she says a wholly-owned subsidiary rather than a joint venture is the best bet. A 2001 EAC study of 80 foreign investors showed wholly-owned subsidiaries broke even, on average, within 2.3 years, vs. 3.2 years for joint ventures. The latter also tend to exhibit a lower profitability rate than subsidiaries (58% vs. 62%).

Stobbe says foreign investors often underestimate the ability of Chinese competitors to quickly acquire foreign know-how and to take over markets. She believes that for foreign investors, a licensing agreement with Chinese partners to build older mold types—or have them complete parts of tooling rather than the entire mold—offer interesting and safe alternatives.

"Bring lots of time with you when you want to enter China," advises Hans Brandner, managing director of BBG GmbH (Mindelheim, Germany) a manufacturer of molds for polyurethane applications. He says his entry was eased because the company had as a partner PUR processing equipment maker Krauss-Maffei (Munich). Krauss-Maffei provided a wide range of help such as local contacts, translating services, shared office facilities, and services to cut through red tape from its Chinese sales office for BBG during setup.

Can''t beat them? Join them

David S. Gower, managing director of Newform (Neu-Isenburg, Germany) which assembles and distributes household and gift items, has already had difficulties resulting from a Chinese molder copying a design for a tube-shaped pasta cooker molded of styrene-acrylonitrile. To differentiate his product from the cheaper import, Gower is adding a PP sieve and cover. The molds are being made in China for his German processor. But he is sourcing these molds via a Chinese businessman living in Germany. "It''s very important to be able to have constant contact with the one you need to deal with and to be able to speak to him in your own language," Gower says.

Marc Weinmann, managing director of VEM-Ltd. Hong Kong, a German-American procurer and distributor of Chinese-made molds, mainly for medical and consumer electronic housings, has been working with three shops in Hangzhou, Shenzhen, and Dongguang for the last five years. He says quality of Chinese molds is about 5% less than western equivalents, but 30% to 50% cheaper. Weinmann has a design and sales office in Buchenbach Germany, and another for sales in Redondo Beach, CA.

His customers typically have molds made in China for production elsewhere. "It only pays to have parts processed in China if it involves a lot of hand assembly," Weinmann says. The company sources 400 molds a year.

Nevertheless, Weinmann, will be going a different route starting in summer by opening his own moldmaking operation in Dongguang and, with a German injection molder partner, an adjacent joint venture processing facility. "I expect to have better quality control. Now I have to make unannounced weekly visits to our partners to inspect work in progress. That''s the only way to insure you get what is ordered," he says. By having his own processing operations, he feels he will have better opportunity to garner business from western transplants who want to produce in China.

He also says his small operation is often at the mercy of his moldmaking partners, who will drop his work when a big order from companies such as Philips or Siemens comes in. "This is typical business practice in China. A promised due date means nothing," he says. Also he is hoping to have a clearer view of raw material prices and more control over local labor.

Robert Colvin [email protected]

Contact information

BBG GmbH & Co. KG    www.bbg-mbh.com
Euro Asia Consulting (EAC)    www.eac-consulting.de
Newform    www.newform.de
VDWF    www.vdwfaktuell.de
VEM-Ltd. Hong Kong    www.vem-ltd.com

China operations and the competitive advantage

Successfully integrating manufacturing operations in China depends on a continuous real-time presence for Seattle''s PMI.

During a time when many plastics processors are complaining about losing business to China, Pacific Market Inc. is leveraging its operations there to develop innovative products for major retailers. The designer and importer of insulated drink ware, food storage items, backpacks, and sports duffels operates four Chinese facilities that follow socially responsible business practices and comply with PMI''s specs as well as quality standards from clients.

Talk about "a dollar and a dream."

This famous phrase just about sums up how Robert Harris founded Pacific Market Inc. (doing business as Pacific Market International and PMI), a designer and importer of insulated mugs and cups for several major retailers. Some 21 years ago, with just a $1200 initial investment, the PMI CEO and owner used credit to purchase an ocean container full of copper cookware sets abandoned at the Port of Seattle. The proceeds generated from selling the contents to liquidators not only enabled him to pay off his credit line, but also became the seed money to found the company.

Today, the Seattle-based company manages product for some of the biggest names in retailing, such as Starbucks Coffee Co. (Seattle), Eddie Bauer Inc. (Redmond, WA) and Target Corp. (Minneapolis, MN), as well as its own brands worldwide, including Aladdin, Stanley, and MiGo.

PMI produces more than 750 products and maintains offices in Seattle, Brentwood, TN, and Shanghai, China. An estimated 80% of the business comes from PMI''s insulated food and beverage container lines, with the remainder from bags and backpacks made for Eddie Bauer and Nike (Beaverton, OR). The firm posted an estimated $70 million in 2003 sales and reported double-digit growth the past three years.

The multi in multinational

PMI has maintained manufacturing operations in Asia since 1992. Through the years, it gradually increased its presence there, investing in a Guangdong injection molder in 1999 and a Qingdao stainless steel operation two years later. Today, products are manufactured at 11 locations in Asia. Factories are either pursuing or have achieved ISO 9001 factory certification.

"Not all of them are injection molding factories," notes Marc Platt, senior VP of operations. "We have three factories that are primarily stainless steel making, although there is some injection support for handles, cups, bases and other kinds of auxiliary components."

An estimated 70% of PMI''s business comes from plastic products. Four Chinese factories manufacture double-wall beverage containers, lids, handles, tools, and accessories with the capacity to produce 24 million units per year. The firm operates more than 500 injection molding machines with clamping forces ranging from 100 to 2000 tons.

"All of our factories have capabilities for spin welding, printing, and packaging," Platt says. The primary materials used for injection molding include PC, ABS, SAN, PP, TPE, acrylic, and silicone.

When in China, do as Americans do

PMI says it is committed to the smooth transition of product from design to prototyping, tooling, sampling, and production. Production lines and raw materials are scrutinized to meet PMI''s specifications as well as quality standards from clients. The facilities follow Six Sigma design processes and implement improvement initiatives. "That is a point of differentiation," says Peter Nazaroft, design engineer. "We have seen that proven by some of the recent contracts we''ve won on what we call the private label side of the business, where we are doing design and turnkey engineering and development for two major global customers."

Products are distributed to client locations in Asia and around the globe. "It gives us the ability to put over 100 products in the pipeline immediately from multiple manufacturing locations," Platt notes.

Although the China operations provide PMI with labor cost savings, Platt notes PMI is committed to socially responsible business practices and assures that its products are produced under lawful, humane, and ethical conditions. It engages a major independent firm to audit its factories and ensure compliance with its code of conduct.

"PMI took the steps that were necessary to comply with our Code of Conduct," says Michael Collier, advanced program manager, Nike Bags. "That''s a very important step for us and is really critical for determining business partners."

It''s in the bag

PMI has conducted business with Nike Bags, part of Nike''s Equipment Division, since 1999. Last year, it developed the framework for Nike''s EPIC 1 iD bag. Product development was tricky, as Nike sought to create a soft plastic garment that absorbed shock without breaking.

"Marrying those two materials has almost never been done at this level," Chris Helmsworth, Nike Bags'' director of development, contends. Two large inserts inside the bag are insert molded. "The injection molding, in particular, is very technical because the frame is made from a glass-filled TPU."

An ongoing challenge for PMI is ensuring the corporate office and manufacturing facilities are on the same page relative to product design and manufacturing. "The key is being in real time with factory partners, not managing factories from Seattle," Platt says. "We realize the need to have someone there in real time, making that tight connection with the factory so it is talking a common language."

PMI continues to fine tune the production process, from engineering design to quality control. For example, it instituted training certification programs at the plants, which gives them a uniform standard of inspection quality. "We just started bringing our factories on board with an Internet-based project management system," Platt says. "By the middle of this year, we will be online with two or three of our major volume products, where we will be able to almost watch process control in real time."

Greg Valero [email protected]

Contact information

Pacific Market Inc.    www.pmiseattle.com
Starbucks Coffee Co.    www.starbucks.com
Eddie Bauer, Inc.    www.eddiebauer.com
Target Corp.    www.target.com
Nike    www.nike.com

Searching for growth in 2004

While not expected to be as impressive as 2003, the stronger-than-expected performance of many industries along with some positive trade developments seem to foreshadow a solid continuation of growth in 2004. Supporting this, a recent survey of 59 leading economists predicts that the U.S. economy will grow 4.4% in 2004.

This positive outlook is bolstered by six months of continuous manufacturing growth beginning in July 2003. Further illustrating this trend, in December the Institute for Supply Management''s manufacturing index gained 3.4 points to end the year at 66.2, representing its most significant jump in 20 years. Similarly, November brought another encouraging .5% rise in wholesale inventories, matching gains made in October, while December witnessed dramatic increases in new orders at factories.

While signs that the economy is continuing to recover are always welcome news for manufacturers, the question becomes, which markets and industries are expected to help drive this growth. Modern Plastics offers this review:

  • The housing market once again experienced awesome growth in 2003, with new residential construction units reaching 1.85 million, the best performance in 25 years. Most industry experts see the 2004 market growing, but at a somewhat less exhausting pace, slowed in part by an expected gradual increase in long-term mortgage rates. As of mid- January, the 30-year mortgage rate was at a six-month low.
  • Inevitably benefiting from the construction boom, sales of major appliances in 2003 rose almost 9%. While slowing somewhat with the housing market, the major appliance industry is nevertheless still expected to expand by 3.2% in 2004.
  • In 2003, personal computer makers are said to have shipped 11.4% more units than the previous year. Suggesting similar growth in 2004, sales of semiconductors are expected to jump 18% this year. Plastics manufacturers who service the PC and notebook industries should again expect to see orders increase throughout the year.
  • Industry experts are also hoping that the long-awaited corporate PC replacement wave will take off in 2004. However, despite all of this forecast growth, intense competition within the industry is expected to keep prices and profits low as suppliers will be expected to increasingly compete on price.
  • The previously mentioned spike in semiconductor sales is also indicative of a larger upward trend in the home electronics industry. This sector has already begun to feel the effects of economic recovery, experiencing production growth of more than 20% in 2003. We predict similar growth in 2004, spurred by increased sales of mobile phones, MP3 players, PDAs, and digital cameras.
  • As Americans continue to spend ever-increasing amounts on health care, including a bill of $1.6 trillion in 2002, plastics suppliers serving this industry will continue to reap significant rewards. While in recent years an increasing amount of this sector''s less-sophisticated manufacturing has been farmed out overseas, U.S. manufacturers still hold the lion''s share of the precision market.
  • The aircraft industry has been one of our few truly outstanding export industries. In November 2003, the industry was credited for boosting U.S. exports to their highest levels in three years. It is also one of the few areas where the U.S. carries a substantial trade surplus with countries like China, measuring almost $3.5 billion in 2002.
  • Natural gas prices are expected to continue their volatility in 2004, yet remain on average $.50 less than in 2003 —gone are the days of $3 natural gas. The average cost of crude oil in 2004 is also expected to fall below the average 2003 price.
Automotive challenges

Of course, U.S. plastics suppliers can also expect to encounter several challenges in 2004. In particular, suppliers to U.S. automakers should approach 2004 with caution. On the one hand, the industry is predicting that in 2004 sales will exceed the roughly 16.6 million cars and trucks sold in 2003. Most reports project likely sales of around 17 million—making 2004 the industry''s third-best year on record.

However, tempering this rosy projection is that while the number of units sold is rising, the continued use of costly sales incentives is keeping producer profits low, which in turn puts pressure on suppliers to continually lower prices.

Changes in production techniques could also affect suppliers. Motivated by shrinking profits and a diminishing market share, U.S. automakers are increasingly shifting towards what is referred to as "platform-based development." This technique encourages manufacturers to reduce costs by reusing an existing design (including parts) during the production of several different vehicle models. This process encourages the standardization and repeated use of an individual part, a technique that has also been used by companies like Sony to lower the production cost of electronics. Under this type of manufacturing regime, parts suppliers would benefit from larger orders, but would also be expected reduce their profit margins.

Investing overseas

Suppliers who face insurmountable difficulties competing on price may want to consider developing overseas investments in 2004. For producers who are considering this route, the timing is increasingly fortuitous.

Many Asian nations are currently attempting to lure foreign investors through the creation of special export zones. These areas usually offer duty-free imports or reduced tariffs on input materials, while also assuring manufactures of necessary infrastructure.

Recent trade agreements have also helped to lower or eliminate U.S. import duties. One such promising development is the recently completed Central American Free Trade Agreement (CAFTA). The agreement, which analysts believe has the Congressional votes needed to pass, is expected to eventually include the economies of El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

As part of CAFTA, plastics imports will enter the U.S. market duty-free. Central America''s proximity, its duty-free status, and its low manufacturing wages—which the General Accounting Office has estimated are as much as 92% below similar Mexican wages—all may offer U.S. producers a more effective means of competing with cheap Asian imports in 2004.

Although positive economic indicators and liberal trade developments cannot guarantee significant growth for U.S. plastics manufactures in 2004, the information in this brief report should still alert processors to some promising markets and opportunities.

Economy & Markets is written by Agostino von Hassell, The Repton Group (New York, NY). Contact him at [email protected]

Separating plastics from metals gains steam

New report points to rapidly increasing demand for electronics recycling

A 55:45 joint venture formed by MBA Polymers (Richmond, CA) and Guangzhou Iron & Steel Enterprises Holdings Ltd. (GISE), called GISE-MBA New Plastics Technology Co. Ltd., will build and operate a mechanical recycling plant for end-of-life (EOL) E/E goods, white goods, and automotive parts in the Nansha development area, using MBA''s separation technology. The technology separates not only plastics from the (mostly mixed metals) shredder residue but also separates plastics by material.

Mike Biddle, founder of MBA, says the new plant—the first large-scale commercial one using the technology—will be able to process about 40,000 tonnes/yr by early 2005. A pilot plant in Richmond, operating for nearly a decade, could process 10,000 to 15,000 tons/yr if enough EOL goods were collected. In the U.S. they are not, but he says the next two to three years is expected to bring legislation in China requiring manufacturers to take back EOL goods and develop recycling plans for these.

Flextronics, the world''s largest contract electronics manufacturer, is a minority investor in MBA Polymers as is another "major player in the plastics industry" that Biddle did not disclose.

MBA is already in talks regarding other plants in China. Interest is also strong in Europe, Taiwan, Korea, Singapore, and India, says Biddle. Manufacturer takeback of EOL goods is already legislated in Japan, Taiwan, and Korea and soon will be in Europe.

According to the new report ''Electronics Recycling: What to Expect from Global Mandates'' from Raymond Communications, electronics manufacturers in Europe alone may need to spend up to $40 billion to prepare takeback and recycling systems for compliance with the Waste Electrical and Electronics (WEEE) directive, which takes effect in 2006. Sony, Electrolux, Braun, and Hewlett-Packard already have formed an alliance to handle their pan-European collection scheme.

The report states that nine Japanese electronics firms spent more than $1.5 billion on environmental design and compliance in 2001-2002. In the U.S., the Environmental Protection Agency has stopped financial support of the National Electronics Product Stewardship Initiative; it now receives only private funding. A California law taxing televisions to support recycling of those produces still awaits approval from the recently elected governor.

In Brief

Moldflow buys American MSI

Simulation software developer Moldflow Corp. (Wayland, MA) has acquired hot runner control manufacturer American MSI Corp. (AMSI: Moorpark, CA) and will now operate two business units: a Design Solutions segment to oversee its Moldflow Plastics Advisor and Insight injection molding simulation products, and a new Manufacturing Solutions group for sales and support of existing Moldflow Manufacturing products as well as the new AMSI hot runner offerings. Moldflow acquired AMSI for approximately $12 million.

New Toyo plant

Toyo Machinery & Metal Co. (Akashi, Japan) reports that it plans to start construction of a new plant at its headquarters in October this year for assembling sub-160-tonne injection presses and 50- and 80-tonne disk replication presses. The facility will cost ¥1 billion ($9.5 million) and start in May 2005 with a capacity of 160 units/month. The move is reportedly in response to surging demand for processing machinery in China, where Toyo sold more than 250 disk replication machines in 2003.

Progressive to U.K.

Mold component supplier Progressive Components (Waucon-da, IL) has opened a regional sales center in Buckinghamshire, U.K. to give it a European foothold. It has had a facility since in Singapore since 1998.

Wittmann to Pisek

Automation and auxiliary equipment manufacturer Wittmann (Torrington, CT), has opened a subsidiary in Pisek, Czech Republic, as part of its strategy to open offices in all major plastics processing countries.

Asian processors bag ire of U.S. government

U.S. processors of plastics shopping and grocery bags have gained some protection against what they claimed were anti-dumping tactics by retail carrier bag imports from China, Thailand, and Malaysia (January 2004 MP/MPI). The U.S. Department of Commerce (DOC) said it found that bag imports from those countries are being sold at less than fair value and the preliminary dumping margins ranged up to 80.52% for China, 101.74% for Malaysia, and to 122.88% for Thailand. U.S. importers of carrier bags from these countries have to post bond on each entry to cover the estimated anti-dumping duties ranging from .12% to 123%. DOC is continuing with this final investigation, which should be completed by June, possibly resulting in even higher duties.

GE shifts focus, realigns

Grappling with an altered marketplace

In response to what one official describes as a "brutal, brutal couple of years," for the plastics industry, GE used press conferences around the world in January and February to introduce GE Advanced Materials (GEAM), a division created at the beginning of the year that is composed of its plastics, quartz, and recently expanded silicones businesses.

Executives discussed GEAM''s strategic model that stresses new and unique products; growth markets in electronics that exploit GEAM''s synergy among its various offerings; and global expansion, including its currently operating or coming-soon facilities in Spain, Japan, and China.

Speaking in New York, John Krenicki Jr., president and CEO of GE Advanced Materials, highlighted several challenges the new division will have to contend with, including commoditization of materials, industry-wide over capacity, energy price inflation, and a sector shift to Asia.

GE''s officials placed a heavy emphasis on developing applications in digital technology. Greg Adams, general manager of global marketing, displayed how GEAM can contribute to every phase of a chip-powered device from new Ultem polyetherimide films for flexible circuits, to quartz for chips, silicone for heat dissipation within a processor, new flexible grades of Noryl modified polyphenylene ether for power-cord coating, and its new Lexan Illuminex light-diffusive PC films for LCDs.

John Dineen, GE''s VP and GM for global product companies, says GE is investing more in its businesses at this time that in any other, in spite of the downturn. These investments include an expansion of GE''s Lexan PC plant in Cartegena, Spain that will double capacity to 300,000 metric tonnes (660 million lb). In 2007 in Cartegena, GE will open a new €300 million plant for Ultem polyetherimide. GE has earmarked $2.2 million to expand its custom compounding unit LNP, $1 million for its Verton long fiber-reinforced compounds. GE is also planning a new Electronic Materials Technology Center outside Tokyo.

Dineen said GE will invest $55 million in its 40-yr-old Mt. Vernon, IN Lexan plant to create new copolymer PCs that "change the DNA" of the venerable material.

Chinese PC market set for 10.4% growth

China''s demand for polycarbonate resin will grow by an average annual rate of 10.4% between 2002 and 2008 according to the report ''Polycarbonate in China —2004'' by Techno Information Center (TIC; Tokyo) and Plastics & Chemicals Intelligence Asia (PCIA; Singapore). This corresponds to growth from 293,000 tonnes in 2002 to 530,000 tonnes in 2008. The forecasts include consumption in Hong Kong.

Optical media is slated for fastest growth, at 16.7%. This application will reportedly benefit from the increased production of recordable media in China, while recorded disk piracy will continue to contribute to overall demand.

Rapid growth is also expected of construction as a result of increased infrastructure spending and a higher level of private home ownership. Here, annual growth is forecast to average 15.7% through to 2008. Growth in the electrical/electronic and office automation equipment sector, meanwhile, will be slowest, but supported by increased notebook computer, liquid crystal display, and TV production in China.

With new PC capacity scheduled to come on stream in 2006 in China and elsewhere, demand growth in China will play a key role in determining the global supply/demand balance. Assuming the China-based plants of Bayer and Teijin are operating on a commercial basis in 2006, the report forecasts an average global operating rate (based on nameplate capacity) of 62% in 2006, and 67% in 2008. Low operating rates could translate to favorable prices for PC.

Besides analysis of market growth, the 134-page report includes information on the activities of key PC end users in China, lists of compounders, PC sheet extruders, notebook computer manufacturers, and optical media replicators in China. Demand forecasts for other Asian countries (Japan, Taiwan, South Korea, ASEAN countries) are also included. The report was co-written by Modern Plastics Senior Editor Stephen Moore.

U.S. manufacturing report: positive impulse or "election-year smokescreen"?

A report drafted by the Department of Commerce (DOC) to assess U.S. manufacturing calls for creating a Manufacturing Council to give industry a voice within the executive branch. Also recommended: was the creation of an Office of Industry Analysis to gather data; tax simplification; economic development coordination; and improvements in intellectual property protection.

The Bush administration sought counsel from several manufacturing associations, including the Society of the Plastics Industry, which saw all its recommendations included. The SPI argued for lower healthcare costs, reform of tort and liability law, and enactment of energy legislation to facilitate adequate, economical supplies of natural gas.

"[SPI''s] petition effort, together with countless other voices, has raised the visibility of manufacturing to our nation''s policymakers," says Lori Anderson, SPI''s officer for strategic planning and industry relations. "We intend to continue this drumbeat as long as necessary."

For Bill Cermak, who splits time between sales and engineering work at Pro Mold & Die and duty as national chairman for the grass roots Save American Manufacturing (SAM) advocacy group, those drumbeats will definitely need to continue.

"I am not offering a political statement," Cermak said. "I only comment on what I read, and it looks like [the President''s administration] is blowing a well-planned election-year smokescreen. There are many good bills in Congress right now that would help American manufacturing, however, I am sure they''ll be held in committee."

Cyndi Petrucci, who serves as SAM''s vice chairperson and is publications coordinator at tool component supplier Progressive Components (Wauconda, IL), is also skeptical, especially since the report staunchly defends the opening of markets and free trade deals that have pitted U.S. manufacturers against countries without comparable wages.

"Bush doesn''t seem to be yielding any with regard to enacting more free trade agreements," Petrucci claims. "These very things are devastating our manufacturing base. It''s not that SAM is against free trade, but the way these particular policies are being arranged and passed, they are free for everyone except U.S. manufacturers."

All the recommendations will require follow-through by various government agencies or Congress to be implemented, and for Anderson, recognition of manufacturing''s travails is just the beginning.

"Now that this report has been released, it''s time for the real work to occur," Anderson says.

M&G boosts presence in Americas

By the end of Q2 2004, PET supplier M&G Group will increase throughput of its Altamira, Mexico facility from 310,000 to 438,000 tonnes tonnes/yr. The plant only came online last April but Marco Ghisolfi, M&G CEO, says he expects several large brand owners in North America to switch to PET from competing materials in the next years. M&G marketing manager David Swift says the users are not being identified yet. Swift does says that interest in M&G''s ActiTUF technology for beer, juices, and other oxygen-sensitive beverages is significant as it is for foamed PET, now in development at M&G.

K SHOW 2004

K show tickets cost more, perks added

Entrance tickets for this year''s K show in Dusseldorf will cost almost twice that of K 2001 tickets. Ticket prices are now at a level in line with competitive international shows such as the NPE in Chicago, says Messe Dusseldorf spokesperson Eva Rugenstein.

A one-day ticket will cost €55 this year, compared to €28.12 three years ago (visitors then paid in deutschemarks, but all prices were also listed in euro). Three-day tickets are priced at €120 (€63.91 in 2001) and students/trainees will be admitted for €15 (€7.67).

Rugenstein adds that the increase reflects more services provided by the show including a larger exhibition area. Also, she says, the pass now doubles as fare for local public transportation in a larger area than was offered in 2001. "Previously visitors and exhibitors who commuted from hotels in Cologne and Bonn had to pay extra for the trips by train to Dusseldorf," says Rugenstein.

COMPOUNDING

Aquafil rising from the ashes

Italian nylons producer Aquafil says it has fully recovered from a fire last May that disabled its compounding operation in Ceriano Laghetto, near Milan. Existing plans to consolidate the Aquafil Technopolymers subsidiary''s production were brought forward, with consolidation at its second compounding site, in Arco, at the north end of Lake Garda. The firm now focuses on high-end products and applications.

Aquafil Technopolymers now has 10 lines, producing a range of compounds and blends mostly based on nylon 6 and 66. Another three lines make masterbatches that are currently virtually all consumed internally but which will later be available commercially. It uses virgin polymer and waste from its neighboring fibers operation. Production is currently around 22,000 tonnes/yr of compound.

The company has upstream capability back to benzene in nylon 6, and buys nylon 66. Most polymer goes into fiber production for carpets and textiles. It also produces fibers in other synthetic and natural polymers. Aquafil Technopolymers general manager Alessio Carminati cites the company''s strength in developing grades of nylon 6 for specific compounds, particularly impact-modified types. He says the company is in advanced development of blends with other polymers, including polypropylene (PP) and polyphenylene ether (PPE). The latter materials are initially intended for car fuel tank flaps. Halogen- and phosphorus-free flame retardant compounds are also in development. Aquafil Technopolymers also makes small amounts of compounds based on acetals, thermoplastic polyester(PBT), polycarbonate (PC) and PC/ABS blends.

SPC relocates

Teknor Apex affiliate Singapore Polymer Corporation (SPC) has relocated its entire plastics compounding operation to a new Singapore site comprising three new manufacturing plants and extensive technical and sales service facilities. Annual compounding capacity for vinyl, thermoplastic elastomer (TPE), specialty, and masterbatch compounds is 70,000 tonnes/year.

Basell''s China PP plant

Basell (Hoofddorp, the Netherlands) plans to build a PP compounding plant in China at the Suzhou Industrial Park, 80 km west of Shanghai. Start-up is planned for early 2005, with an eventual planned capacity of 55,000– 60,000 tonnes/year.

ADDITIVES

Chemson acquires ALLstab

The German subsidiary of additives supplier Chemson AG (Arnoldstein, Austria) has acquired Allstab (Duren, Germany), another top supplier of PVC stabilizers. The acquisition makes Chemson Europe''s largest PVC stabilizer supplier with more than €200 million in annual sales; Allstab''s contribution is about €60 million.

Allstab was formed in spring 2002 from a management buyout of the former rigid PVC division of Akcros Chemicals GmbH. Chemson intends to move its German subsidiary from Frankfurt to Duren. Chemson too is a product of an MBO, in spring 2000.

BASF buys Sunoco business

BASF has paid $91 million for Sunoco''s phthalate plasticizer business. The acquisition includes Sunoco''s site in Pasadena, TX. Sunoco had phthalate sales of $150 million in 2002.

EXTRUSION

Swiss giant enters extruder market

Swiss manufacturing giant Buhler (Uzwil) has acquired the extruder manufacturing business of Theysohn-Maschinenbau GmbH (Salzgitter, Germany) from its insolvent parent, VGT Group. Theysohn''s TSK range of co-rotating twin-screw extruders will be integrated in the Buhler extrusion systems business unit and be further developed. Price was not disclosed.

Buhler already makes extruders for the food, pharmaceutical, and animal feed processing industries. The purchase is part of a concerted move into non-food extrusion applications.

EDI opens Germany center

Cast die producer Extrusion Dies Industries (EDI; Chippewa Falls, WI) has established a center in Reichshof-Wehnrath, Germany to refurbish and renovate its dies in use in Germany, Austria, Hungary, Luxembourg, Poland, Switzerland, the Czech Republic, and the Netherlands.

FACTS announces irrigation pipe deal

Extruder control manufacturer FACTS Inc. (Cuyahoga Falls, OH) has signed an exclusive technology and marketing agreement with APSwissTech SA (Yvonand, Switzerland) for the U.S. and Canada in which FACTS will engineer control systems for extrusion lines made by the APSwiss Tech. That firm makes extrusion lies for cross-linked polyethylene tubes, for composite pipe and drip irrigation lines. FACTS will also handle marketing, sales and service of the equipment in those countries

THERMOFORMING

Greiner acquisition paying off at Kiefel

Thermoforming machine maker Kiefel (Freilassing, Germany), says it has sold five Thermorunner KTR 4 cup forming machines to Egyptian processor Hakim-Plast for processing of polystyrene yogurt cups. Thermorunner machines were designed by the former Greiner Mould & Machinery (Micheldorf, Austria). In January 2003 Kiefel acquired the machine-building business of Greiner to give Kiefel access to more packaging application markets.

MBO turns DT Converting into Sencorp Inc.

A management buyout of the machine manufacturing business of DT Industries is complete, with ownership at newly formed Sencorp Inc. hoping for sales of about 35 large thermoformers this year. Last year, 34 were sold. Ownership is evenly split between the Sencorp management and equity partner Management Capital LLC. Sencorp Systems was acquired in 1993 by Detroit Tool & Engineering Co., as DT Industries was then known. Sencorp makes roll- and sheet-fed units for packaging and industrial applications.

PET egg cartons from bottles

Austrian processors Ovotherm (Wiener Neudorf) and Kruschitz Plastics (Volkermarkt, both Austria) have started a joint venture, Ovopet, to produce transparent, thermoformed egg carton packaging out of used, granulated PET bottles, using recycling equipment manufactured by Erema (Ansfelden, Austria).

PVC

Solvay invests in Japanese PVC recycling JV

Solvay (Brussels, Belgium) and Kobelco Eco-Solutions (Kobe, Japan) have formed a joint venture, Kobelco Vinyloop East Co., to set up an industrial unit of Solvay''s Vinyloop PVC recycling process in Chiba, Japan. Kobelco Eco-Solutions will own 66% of the joint company with Nippon Solvay holding the remaining stake.

Pending government approval, Asia''s first Vinyloop industrial unit will start up at the end of 2005. Initially, production will be built up to 12,000 tonnes of recycled PVC per year. The plant will recycle PVC recovered from cables and greenhouses. The new facility will also operate as a pilot plant for the recycling of automotive parts.

The Vinyloop process employs biodegradable solvents in a closed system to separate PVC from other materials and regenerate PVC of a quality equivalent to the virgin material.

Study looks at alternatives to PVC toys in Europe

Six European toy manufacturers, researchers at the Fraunhofer Institute for Chemical Technology (ICT; Pfinztal, Germany), and the Ministry of Economics of the German state of Baden-Wurttemburg have initiated a joint project to find alternatives to plasticized PVC for toys.

According to ICT project manager Marc Knoblauch-Xander, "We try to design processes such that the new materials can be injection-molded [on existing machines] because producing large quantities in less time with good quality is the goal." The initiative is looking at a number of process improvements including water quenching after injection to increase output.

Corrections

In the January 2004 article "PUR in-mold: Taking the paint out", the tractor pictured was misidentified. It is, in fact, a Valpadana, made by the Italian company Landini SpA. GMP SpA, which makes polyurethane exterior components for the tractor, can be found at www.gmpspa.com.

In a November 2003 article on dual-ovenable packs, it was incorrectly stated that Faerch Plast uses OVAH (EVAL) in packaging for food products. Additionally, PP packaging from Faerch Plast is not dual-ovenable, but for microwave use only.

Modern Plastics regrets the errors.

Foam injection molding: The search for a better method

The advantages conferred by foam injection molding are widely understood and appreciated. However, there are limits to the process. Germany''s Institute for Plastics Processing has developed an alternative method that bears scrutiny.

Aspecial injection molding process like foam injection molding offers many advantages to the processor. Enhanced part properties as well as advantages in the production process are possible. Usually, reduction of shrinkage and warpage or the avoidance of sink marks are possible by using blowing agents. Also, in many cases the cooling phase can be enormously shortened.

This list of favorable properties can be continued further, but there are also disadvantages. The part surface is very often of minimal quality. Also, a drop in mechanical properties can occur, especially when directly substituting a part that has been designed for standard injection molding, without appropriate modifications to the part and the mold. To overcome these problems, an approach, which covers the entire chain of production, is necessary.

Starting with the right choice of the polymer for the application, a suitable blowing agent needs to be chosen for the foam injection molding process (FIM). This can be either a chemical blowing agent or a physical blowing fluid, such as nitrogen or carbon dioxide.

Chemical blowing agents (CBA) consist of the blowing agent itself—for example, citric acid—and a polymeric carrier, which also might include flow-enhancing additives or pigments. The blowing gas is generated during the thermal decomposition of the blowing agent in the plasticating unit. Up to 65% of the blowing agent remains as solid a residue in the polymer melt, where it is used as nucleating agent on the one hand; but on the other hand, it can lead to decomposition of the polymer and/or deposits in the processing machine and in the mold. A clear advantage of chemical blowing agents is the simple volumetric dosage and the possibility to use standard injection molding equipment.

The use of physical blowing fluids (PBF) generally leads to higher degrees of foaming and thus to lower density of the parts. There are no deposits or solid residues remaining in the part, which means that the range of applications of physically blown parts includes food packaging and medical products. Advantages of nitrogen and carbon dioxide compared to other physical blowing fluids (e.g., pentane) are that they are not flammable and non-toxic. But processing PBFs is more demanding of machinery and process control. Further, CBAs tend to achieve better part surfaces since there is a lot of technical experience, and a nucleating agent is already incorporated in their formulation.

Due to late developments in the field of processing physical blowing fluids in injection molding, this process has come into fashion again. In a foam injection process using physical blowing fluids, the preparation of the PBF/melt system is of special importance. A sufficient quantity of fluid has to be evenly dissolved in the melt. But the generated system also needs to be thermally homogeneous. Therefore, injecting and properly mixing the PBF is the second step to success.

Taking a fresh look at foam

Based on earlier developments and past investigation at the Institute of Plastics Processing (IKV; Aachen, Germany), a new concept for injecting the physical blowing fluid has been developed. It consists of a special nozzle, which is designed to be mounted between the plasticating unit and the shut-off nozzle of a conventional injection molding machine. The concept and the prototype of the fluid injection nozzle were first presented at the IKV-Colloquium 2000.

To achieve a homogeneous distribution of the blowing fluid, the diffusion path in the melt has to be as short as possible. Research shows the time necessary for charging the melt can be minimized by shortening the diffusion path. This led to the eventual conclusion that the surface/volume-ratio had to be maximized.

According to this specification, a ring-shaped die design was selected. A torpedo is placed in the center of the melt flow channel (see Figure 1). Both the surface of the torpedo and the outer surface of the melt flow channel are made from porous—and therefore permeable—sintered metal.

This concept requires a highly accurate fluid metering unit, capable of providing a constant mass flow at high pressure. The blowing fluid is injected into the melt through both the porous outer and the inner sinter metal sleeve. To prevent the sinter metal parts from collapsing at high pressure, support sleeves are used for stabilization.

The advantage of this method is the use of a standard injection molding machine with a standard screw. This offers good flexibility in the production process. Using appropriate adapter fittings, this technology can be applied to machines of various manufacturers without any problems. Further, the injection nozzle can be assigned to the mold, so that production on the machine can be varied with a simple mold change.

In order to achieve improved homogeneity of the PBF/melt-system, static mixing elements can be mounted between the fluid injection nozzle and the shutoff nozzle. Another advantage of static mixers is the enlargement of the nozzle''s processing window, since the task of mixing is accomplished downstream. Figure 2 shows the machine setup at the IKV of the special nozzle with a static mixer from Sulzer Chemtech (Neunkirchen, Germany) mounted on an injection molding machine from Demag Plastics Group (Schwaig, Germany).

Last, but not least, the design of the mold determines the results. Starting the injection with a homogeneous PBF/melt-system, the nucleation and the foam formation take place in the mold. Therefore, the filling behavior of the material, the part design (wall thickness, ribs, bosses, etc.), as well as gate size and its position determine foam properties. Furthermore, a homogeneous temperature distribution in the mold is even more important than in conventional injection molding to ensure fast cell fixation and to prevent post-blowing of the part.

Figure 3 shows the final result, a shoe sole produced with the special nozzle for fluid injection. In close cooperation between the IKV, Sulzer Chemtech, and Huntsman Polyurethanes (Everberg, Belgium), the special nozzle, the processing conditions, the polymer (TPU), the mixture of additives, and the mold have been optimized to produce a high-quality shoe sole. The result: As much as 63% density reduction (density .44 g/cu cm) with a homogeneous foam structure and an even surface. While reaching a density reduction of about 40% by using CBAs only, processing CO2 led to about 50% density reduction.

So, what is the conclusion? Foam injection molding is not simple, but if you have competent partners, the right equipment, know how to use it (or at least have the time to learn it) and a good polymer compound, you can produce high-quality thermoplastic foams.

Walter Michaeli is professor of plastics processing at RWTH Aachen University and director of the Institute of Plastics Processing (IKV; Aachen, Germany). Sasan Habibi-Naini ([email protected]) is a research engineer at the institute in the injection molding department, focusing on processing and mold technology for foam injection molding.

California looks for relief from its workers' comp headache

Arnold is back. But instead of saving the world, the former action hero is flexing his gubernatorial muscle to overhaul California''s out-of-control workers'' compensation system.

During his State of the State address in January, California Governor Arnold Schwarzenegger called on the California legislature to act immediately on his proposal to bring workers'' compensation standards and costs in line with the rest of the country. The governor introduced two bills in a special session designed to reduce employer costs by, among other things, overhauling permanent disability ratings; streamlining the system to improve efficiency and save money; using more objective criteria in evaluating injuries; reforming the indemnity side of the system; and reforming penalty structures that give applicant attorneys incentives to file frivolous litigation. He set a March 1 deadline for lawmakers to deliver genuine workers'' comp reform to his desk, so he has time to qualify an initiative for the November election if his bills are not passed.

"If modest reform is all that lands on my desk," Schwarzenegger said, "I am prepared to take my workers'' comp solution directly to the people, and I will put it on the ballot in November." The bills would go into effect 90 days after being signed into law.

Following another year of double-digit increases in their workers'' compensation insurance premiums, managers of plastics operations face more increases this year. Employers renewing workers'' comp insurance policies this year will likely face more price hikes due to the time it takes for changes in law to be reflected in insurance rates. The California Chamber of Commerce (Sacramento, CA) reports that state employers continue to suffer the most expensive rates in the nation—$6.33 per $100 of payroll.

Molders have been particularly hard hit. A spot survey of California processors found that workers'' comp insurance premiums rose 20% to 180% each of the past three years. Depending on business size, this meant adding $20,000 to as much as several hundred thousand dollars to annual workers'' comp costs.

Cal Mold Inc., a moldmaker based in Mira Loma, CA, has seen its workers'' comp expenses soar 700% since 1999, peaking at $200,000 last year, despite an improving safety record, says Erik Fleming, president. Prestige Mold Inc. (Rancho Cucamonga, CA), also a moldmaker, reports workers'' comp insurance premiums jumped by 111% since 2000. "By spending this extra money on workers'' compensation insurance, it limits our resources that could have been spent elsewhere, such as for new equipment, newer technologies, and wage increases," says CEO Donna Koebel.

Injection molder Inland Technologies Inc. (Fontana, CA), saw its workers'' comp insurance rates soar by 20%. "We cannot pass this type of increase on to most of our customers," says Herschel Staton, controller. Noting that more than half of Inland''s customers are located out of state, "they will not even address a price increase if we have to base it on items affecting us at our local level and it is not affecting them at their local level."

Until comprehensive reform is enacted to produce a major overhaul of California''s workers'' compensation system, molders are taking matters into their own hands to alleviate the pressure on their bottom lines. Some companies, such as NMC Group Inc. (Pomona, CA), say they are contemplating relocating out of state. Inland is investing in automation equipment to reduce its reliance on people to make parts, Staton says.

As part of its efforts to reduce job-related injuries, American Technical Molding (Upland, CA) purchased hundreds of thousands of dollars in equipment that is safer to operate. "We invested significantly in materials handling systems that replaced the big hoppers that were on the press," says Rocky Morrison, president. "The bigger hoppers are now on the ground."

Greg Valero [email protected]

Contact information

American Technical Molding    www.atmolding.com
Cal Mold Inc.    www.calmold.com
California Chamber of Commerce    www.calchamber.com
Prestige Mold Inc.    www.prestigemold.com
Inland Technologies, Inc.    www.inlandtechnologies.com
NMC Group, Inc.    www.nmcgroup.com

ERP, once a luxury, now a necessity

Facing tough competition from China and other Asian countries, it has never been more vital to make a manufacturing operation as lean as possible. Enterprise resource planning (ERP) systems can help you get there.

Processors obviously cannot afford to be labor intensive if they want to remain competitive. Technology, supported by efficient processes to use the data it generates, can reduce labor costs provided it seamlessly integrates business activity across the enterprise.

In other words, enterprise resource planning (ERP) technology is no longer nice to have; it''s a must have, industry members concur. "I believe the real reason for the necessity is all about the cost of doing business," says Terry Cline, VP of IQMS (Paso Robles, CA), a provider of ERP system design, programming, implementation, and support services. "State-of-the-art information systems are a primary weapon to get more out of the shop for less."

ERP, a term coined by technical research and advisory firm Gartner Group in 1990, is generally characterized by its ability to manage the nuts, bolts, and business processes.

Some of the most common automated ERP business functions include financial and business analysis, sales orders and other customer-related information, purchase orders and supplier data, inventory, product lifecycles, and more.

"Standardizing those processes with a single, integrated ERP system saves time, maximizes productivity, and enhances competitiveness," says Joey Benadretti, VP of Syspro USA (Costa Mesa, CA), a producer of ERP software. "All manufacturers and distributors, including those in plastics, need these advantages."

In the real world

This business approach is not limited to just large or multinational corporations. The reality is that even smaller processors operating a few machines can benefit, as ERP software can be tailored to suit the firm and grow with the company. If response among adopters contacted by Modern Plastics is any indication, then ERP is already proving itself as a viable means of improving supply operations in repetitive manufacturing industries such as plastics.

"ERP brings all of the information under one roof and expands the capabilities of system users to make informed decisions and relay quick, accurate answers to those who need them," says Jeff Somple, president of Mack Molding''s (Arlington, VT) northern operations. "This is particularly important at Mack, where our high level of assembly requires a stringent monitoring of both the supply base and our inflow of materials."

Mack is implementing Mapics ERP software at its Inman, SC facility this spring. The molder''s Vermont plants previously used Effective Management Systems software to run its major business systems, but had outgrown it. "All manufacturing systems throughout Mack Molding will be integrated, including Mack''s seven off-site warehouses," says Wanda Knowles, director of information technology.

The firm chose ERP software from Mapics, a solutions provider focused exclusively on manufacturing, because it required a system that provided functions beyond those specific to the molding industry. In addition to sheet metal fabrication and plastic parts manufacturing, Mack provides engineering support, quoting, finishing, and assembly. It expects to reap several advantages from the new system, such as shorter lead times, faster time-to-market, lower operations costs, and reduced inventory, scrap, and waste.

Phase two of system implementation will be completed by late summer and includes additional software modules to incorporate workflow and expand reporting, quoting, shop floor, and e-commerce capabilities.

"With e-commerce, customers will be able to place their orders directly into our system, thus speeding up the entire sales order process," Knowles says. "Mack''s customer service representatives will receive immediate notification of new orders and change orders, eliminating double data entry and further reducing data entry errors."

Custom molder Engineered Plastics Corp. (EPC; Menomonee Falls, WI) switched to an ERP system from DTR Software International (Jacksonville, FL) because the previous software could not keep pace with the growing complexity of the rapidly growing business. "It became difficult to understand what changes in our processes affected costs and, what''s more, we could not quantify those costs," says John Papineau, general manager.

A desired process change that would affect project costs was the reassignment of labor.

According to DTR, with a definitive schedule, EPC could better use its staff and allow employees to be responsible for several machines rather than just one, leaving others to perform additional secondary operations. EPC found the Manufacturing Manager from DTR, a comprehensive ERP solution for plastics processors, provided production management with valuable information for making strategic decisions about what to produce, when to produce it, and what resources to use.

"With accurate scheduling we''ve been able to transition our operators from running a single press full time to semi-automatic and even automatic processing," says Papineau. "Now we can confidently assign one person to operate up to four presses at once, which means we can reduce associated labor costs by up to 75%"

One key ERP benefit is as a means for processors to better maintain production scheduling, taking the work out of human hands and letting a computer run the show. This can prove especially prudent in just-in-time processing, where a late production change requires quick assurance that tools, raw materials, sub-assemblies, inserts, and more are on hand.

"We have reduced the redundancy of handling or creating data [several] times to work with multiple formats or systems," says Scott Krogh, production manager at Kennerley-Spratling Inc. (San Leandro, CA). The custom injection molder has been using the EnterpriseIQ system from IQMS for more than three years. "It has freed up time for administrative staff to be proactive and tackle a deeper level of problem-solving, improving information flow and accuracy."

Prior to implementing the IQMS software, Kennerley-Spratling used computerized and pen-and-paper systems to drive and track inventory, production, sales orders, and purchasing. "A lot of manpower was being spent on tasks that could be streamlined and automated by a more inclusive, integrated system," Krogh explains.

Molders say it is difficult to quantify how ERP systems have impacted their bottom lines. The return on investment (ROI) varies by company due to many variables, including the dedication of management and the buy-in of employees. A Meta group study of 63 companies found that it took an average of one to two years after the new system was in installed to see benefits.

"How much payback a company derives from an ERP solution depends greatly on the size of company, number of employees, and how bad the company infrastructure was to begin with," Syspro''s Benadretti says. "Many times an ERP solution replaces a ''home grown'' system that might have been sufficient at one time, but is inadequate to support a company''s growth."

If the activity of gathering and analyzing data increases management''s ability to make faster, more efficient business decisions, experts say, then the investment is clearly worthwhile. For example, Wisconsin Plastics Inc. (Green Bay, WI) reports that the accurate inventory count provided by its real-time ERP system helped it establish a just-in-time replenishment program with suppliers, resulting in a decrease of overall total raw material inventory by 17.5%.

Likewise, access to real-time information helped Nylon Molding Corp. (Pomona, CA) shave roughly 14 hours off its reporting process according to Tom Mendez, controller. "We close our books at noon on the first workday of the new month and by 4 p.m. we have completed all our financials and analytical activities."

Before investing in ERP, industry members advise processors to discuss their choice of system with suppliers and customers, since the proliferation of ERP systems has led to development of some which are unable to communicate with others. Processors can acquire ERP systems in two ways, by either choosing a package designed specifically for them, or taking the best-of-breed approach, acquiring and bundling together different programs, each designed to handle specific tasks. Although installation costs vary, depending on variables such as size and geographic diversity of the processor''s facilities, ERP systems typically sell from roughly $35,000 to $250,000. "System costs are affected by implementation processes," Syspro''s Benadretti points out. "The complexity of some ERP solutions results in implementation costs that often exceed the initial costs of hardware and software."

Greg Valero [email protected]

Contact information

DTR Software Int''l    www.dtr-software.com
IQMS    www.iqms.com
Kennerley-Spratling Inc.    www.ksplastic.com
Mack Molding    www.mack.com
Mapics    www.mapics.com
Syspro    www.sysprousa.com