he U.S. and Canadian plastics industry was generally flat in 2003. Resin sales and production each fell by half a percent, according to figures from the American Plastics Council (APC).
End-use manufacturers continue their drift to East Asia and other low-cost regions with their suppliers often tagging along. This continues a trend reflected in the 2002 employment and shipments statistics compiled by the Society of The Plastics Industry that showed declines in both categories in each of the top 10 states.
While economic conditions have stymied the sector, investment continues across the U.S., and big end users often dictate where their plastic parts suppliers site facilities.
“Molders tend to locate either near their customers or their sources of raw materials,” says Ted Parcel, NAI vice president, process industries, based in Emmaus, Pa. “They also go where energy and labor costs are less, such as in the South and Southwest.”
Parcel, whose resum? features 25 years of experience working for Hercules Inc. and Air Products and Chemicals, says industries with large-scale assembly plants, such as automotive, are big magnets for suppliers of the myriad plastic parts comprising vehicles. “Automotive assembly plants like their parts suppliers to be reasonably close so they can quickly replenish the demand from the prior day.”
A look at new plastics projects over the past year bears this out. Alabama, Indiana, Kentucky, Ohio, Michigan and Texas are among the top states landing new plastics investment related to the automotive industry, according to Conway Data’s New Plant Database. These states are also the heart of recent automotive industry expansion.
But, Parcel notes, the plastics industry as a whole is “very large and very fragmented.” He says there is little in the real estate function that affects site selection. Injection molders need a general industrial building with routine heights and routine flooring.
“They may need a rail siding or natural gas and steam, but that’s available everywhere,” he says. “There’s no natural automatic location for a fabricator.”
Features