Whither Plastics?Plant Location Criteria as Diverse as Products

Like the products they produce, plastics firms are a multifarious lot. Little wonder, then, that the industry’s site selection patterns are no less diverse.

U.S. manufacturers serving the Midwest-dominated automotive market cite different site selection priorities than do producers of foam or fiberglass insulation or PVC pipe for the construction industry.

Plastics manufacturers whose customers are predominately in the housewares or packaging industries are likely to draw up a list of site selection criteria that bears little resemblance to the wish list penned by a maker of medical products. CD manufacturers serving the Nashville-based music industry view site selection in a different light than those who produce CD-ROMs for computer hardware and software manufacturers in the Silicon Valley.

For some plastics manufacturers, proximity to customers or raw materials — or both — gets top consideration when choosing an expansion or relocation site. Rail and highway access may dominate the decision-making when shipping costs or time-to-market are at issue.

If raw materials must be imported or delivered in liquid form, access to barge transportation is factored into the equation. As the industry continues to clean up its act, availability of untainted land lures some manufacturers, as do incentives that include environmentally driven infrastructure improvements, such as wastewater treatment plants that serve multiple tenants in an industrial park.

The Carolinas and the Gulf states — where land is plentiful, waterway access available and the related petrochemical industry firmly established — continue their aggressive pursuit of plastics firms. Last October, the Greensboro, N.C.-based Piedmont Triad Partnership targeted the plastics industry for the first time in its formal marketing plan.

Indeed, some plastics firms are pulling up roots in the Midwest and Northeast to take advantage of southern hospitality. On the other hand, some Gulf state-based firms are choosing to expand by establishing a West Coast presence.

And then there are the many manufacturers who say they are reluctant to relocate from states such as Ohio, Indiana and Michigan where the plastics industry’s strong, well-established presence has produced a solid manufacturing-based infrastructure and local government support. For these states, retention of existing plastics firms is as high a priority as attracting new business.

While it’s difficult to isolate a common thread with respect to where plastics firms are choosing to expand and relocate, there’s little question that the industry will continue to require additional suitable space for expansion. According to The Seventh Annual Plastics Industry Outlook, 1997-99, the plastics manufacturing industry will remain in an expansion mode through 1999, barring a general economic recession.

The report, published by the CIT Group/Equipment Financing, an economic development and research organization in Livingston, N.J., forecasts a 4.4 percent increase in real industry shipments in 1997, followed by increases of 3.9 percent in 1998 and 3.6 percent in 1999. 1999 shipments are expected to reach a record US$120 billion, 12.3 percent above last year’s record pace, the report says.