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PE Film Market Analysis: Institutional Can Liners

By: James Callari 2. June 2015

 

During 2014, approximately 1.398 billion lb. of PE was consumed in the production of institutional trash bags. With an average annual growth rate (AAGR) of 3.7%, this market is expected to increase to 1.561 billion lbs of PE resin consumption by 2017.

 

These are among the conclusions of the most recent study of the PE Film market conducted by Mastio & Co., St. Joseph, Mo.

 

Widths of institutional trash bags range from 13 to 69 in., with the most typical width being 30 in. Institutional trash bag lengths vary from 17 in. to 90 in., with the average length being 48 in. Institutional trash bag capacities range from 4 gal to 90 gal, with 33, 40, and 45 gal being the most common, Mastio notes.

 

Institutional trash bag film gauges range from 0.1 mil to 10 mils in the United States (U.S.) and 0.3 mil to 12.8 mils in Canada. Many producers stated there is not a typical gauge for institutional trash bags as the film gauge depends on the application, Mastio points out.

 

MATERIALS TRENDS

Many institutional can liner processors are beginning to use biodegradable resins such as polylactic acid (PLA) and synthetic polyesters in the production of institutional trash bags. PLA is a corn-derived biodegradable plastic that is designed to biodegrade in any standard compost bin.  That said, none of the processors who participated in the Mastio study reported any use of PLA resin in the production of can liners during 2014.

 

Mastio reports that the resin most commonly utilized for institutional trash bags in 2014 was LLDPE. LLDPE provides added strength and tear resistance over low density PE (LDPE) resin, which makes the film  less apt to puncture. LLDPE can be further down gauged without sacrificing strength. Various grades of LLDPE resins utilized in this market include the following: LLDPE-hexene, LLDPE-butene, LLDPE-octene, mLLDPE, and LLDPE-super hexene.

 

High density PE (HDPE) was the second most utilized material in this market during 2014. High molecular weight-HDPE (HMW-HDPE) and medium molecular weight-HDPE (MMW-HDPE) resins allow processors to manufacture institutional trash bags in thinner gauges that are about three times stronger and more durable than other trash bags constructed with LLDPE, LDPE, and/or medium density PE (MDPE), according to Mastio HDPE provides the highest level of puncture resistance of all PE resin material. However, HDPE requires more costly, specialized film extrusion equipment and is more difficult to extrude. Several film processors in this market lack the specialized film extrusion equipment needed to process HDPE materials.

 

Post-consumer reclaim was the third most commonly utilized material in the production of institutional trash bags during 2014. The reported utilization of PCR included post-industrial scrap resins consisting of PCR-LLDPE, PCR-LDPE and mixed PCR-PE (HDPE, LDPE, LLDPE and MDPE). Cost savings and adherence to mandates of PCR content by a few states, such as California; have also contributed to increased use of PCR in this market.

 

LDPE is also utilized in this market, mostly in blends with LLDPE and in multi-layer coextrusions. One advantage of utilizing LDPE resin is increased bag clarity, which is important for bags used in recycling programs. Also, LDPE resin, when used alone or in blends, has increased processing ease.

 

Utilization of LDPE-homopolymer, LDPE-ethylene-vinyl acetate copolymer (LDPE-EVA copolymer), and LDPE-ethylene-methyl acrylate copolymer (LDPE-EMA copolymer) grades were reported in this market during 2014.

 

TECHNOLOGY TRENDS

Monolayer blown film constructions remain the principal design for institutional trash bags, accounting for more than 94.3% of PE resin consumption.

 

MY TWO CENTS

It’s a bit surprising that monolayer structures are still the technology of choice in this market. It suggests to me that equipment assets in this market are aging. As more film-recycling streams start to develop, it’s possible that institutional liner companies will add more coextrusion capacity. As the report suggests, many are using PCR now, but apparently in blends with prime resin in single-layer structures.

 

Looking to Expand By Acquisition? Here’s How to Be a Better Buyer

By: James Callari 1. June 2015

 

In part one of this-three part blog series, we featured a Q&A with Deborah Douglas in which she offered tips on what plastics processors need to know to get more savvy on evaluating the worth of the their company. Her insights are both useful and timely in light of the spate of M&A activity in plastics processing of late.

 

Ms. Douglas is an expert on such matters.  She is the managing principal of Douglas Group, a St. Louis-based M&A firm that specializes in selling plastics processing companies. Ms. Douglas is a published author of two books, her most recentRipe: Harvesting the Value of Your Business. She is frequently asked to speak at varied industry and trade events and often serves as luncheon speaker for general business forums. She has been published in numerous trade and business periodicals including Plastics News, ISHN, The Wall Street Journal, Fortune Magazine, and Profit Magazine to name a few.

 

In part two, she provides tips on how owners of processing businesses can get better at selling. Here, in the final installment, Ms. Douglas discusses how processors can better prepare themselves for an acquisition.

Plastics Technology: What recommendations would you make to a plastics processors looking to acquire another processing operation?

 

Ms. Douglas: Success in acquisitions begins with doing the right acquisition.  Too often buyers don’t focus on what they really need to buy, to do a great transaction.  The great purchase isn’t determined at the date of closing.  The great purchase is the one you look back on five years from now, and say, “Boy, am I glad we did that!”

 

So the start of the process should be careful attention to what is the perfect seller to fit.  What are we missing that the perfect seller might provide us?  What talents or expertise or capabilities do we have that could be worth way more, if we acquired someone to give us new or special access to a market?  This beginning step to the acquisition process is actually probably the most important of all to eventual success.

 

As you begin to approach the potential sellers you identify, begin with courtesy, and carefully guarded confidentiality in the process.  There is no faster way to kill a possible deal than sloppiness about confidentiality.  You may damage the seller company, and you’ll almost certainly damage your chances for successful acquisition!

 

Plastics Technology: So relationship building is important?

 

Ms. Douglas: Be cognizant of the seller’s background and situation, and work to establish a warm relationship from the start.  We sold a company last year to an equity fund buyer who offered $32 million for the company.  At the same time, we had another offer for $35 million from a strategic buyer.   The strategic guys were from a large company and enjoyed telling our seller, “Your operation is interesting, but this is how we big guys do it.”  For our seller client it was worth losing $3 million of selling price on the deal to not sell to them.   He felt the equity guys would be better for his people, and better for his company long after he was gone.

 

We worked on a buy-side transaction for a plastics company based in Florida, who wanted a Midwestern operation with certain capabilities.  We found the perfect fit in outstate Arkansas.  The would-be seller was a Southern Baptist, who had told us as we talked that finding a “moral” buyer was important to him.  Furthermore, he told us he did not believe in drinking, or even in card playing, as he felt those were outside of “good moral” behavior.  Thus, we knew we were dealing with a very conservative guy, and we told our buyer client all we had learned. 

 

The buyer’s son met us at the Arkansas plant to try to cement the deal.  The son arrived wearing an “Elton John Aids Benefit” t-shirt, and came with a large mesh bag of beer-logo’d cups in tow as a gift.  As I sat inside the plant with the seller owner and watched the young man approach, I knew the deal was dead before he ever got to the door.  It’s worth the effort to try to establish the relationship with the seller.  You must have his goodwill to have a chance at success.

 

Plastics Technology: How important is speed and decisiveness is closing the deal?

 

Ms. Douglas: If you’re moving in the process toward a possible purchase, I would always encourage buyers to move quickly and decisively.  If you know your intended pricing, and you know you want to move, try to get a letter of intent in place as quickly as possible, with exclusivity if you can. If the seller is unwilling to commit firmly, do what you can to move forward quickly, even without a letter of intent.  The buyer who can close in 30 days instead of 90 makes a powerful impression on the seller, and may secure the deal for that alone.

 

Also, as a buyer, keep in mind that price alone should not be the sole decision point.  The right fit is far more critical to long term success than price.  That of course does not mean that money is no object.  If pushed too far, you may simply have to withdraw.  But I would tell you paying 20% more for the company that’s the ideal fit should not stop you. In the end, the fit will make the far greater difference to your satisfaction with the deal.

 

When you think you have agreed on pricing for the deal, and start to move forward in due diligence, this is a time when you will have near maximum contact with the owner seller.  It is a unique opportunity to establish relationships that will serve you especially well post sale.  Be respectful of confidentiality worries.  Be thorough in your due diligence, but do so without disrupting the seller operations.  That 30-90 day period while all of this goes on makes it far more likely (or less) that you’ll come to successful close, and can jump-start your new business together tremendously, if done right.

Solvay's Advanced Thermoplastics To Star In Polimotor 2 Car Engine

By: Lilli Manolis Sherman 31. May 2015

 

While it’s taken 25 years to remerge, work on an all-plastic automotive engine is well underway. In fact, the Polimotor 2 engine will make its debut in a race car next year and several advanced thermoplastics from Solvay Specialty Polymers are an integral part of the design.  The four-cylinder, double-overhead CAM Polimotor 2 engine will be installed in a Norma M-20 concept car that will compete at the 2016 racing of Lime Rock Park, Conn.

 

First, a bit of history. Some of you might remember hearing about Polimotor 1 back in the late 80s--a joint project of New Jersey-based Polimotor Research and Ford Motor. Although that engine was never installed, the ambitious project resulted in an engine based on Ford’s 2.3-liter Pinto engine and weighed 153 lbs vs. 415 lbs for its then cast iron counterpart. It comprised metal cylinder sleeves, metal combustion chamber tops, metal piston crowns, bearings, valves and seats, and a stock 2.3L Pinto crankshaft. Nearly everything else—including the block, rods and piston skirts—were made of Torlon PAI (polyamide-imide) then made by Amoco Chemical and now one of Solvay’s key advanced polymers.

 

Fast forward to Polimotor 2: Solvay is aiming for an engine that will weigh 138 to 148 lbs, or about 90 lbs less that today’s standard production engine. Of course, the company is hoping that this development will translate to further innovation for future commercial cars. In their press release, Solvay noted that at least ten engine components—including the intake manifold (plenum), air duct (runner), cam sprockets, throttle body, water pump, oil pump, and fuel rail—will be made of at least seven of its materials.

 

In my recent inquiry, Solvay officials offered some further details starting with this: “Polimotor 2 is the evolution of Polimotor I where new polymers and technologies will be introduced that were not commercially viable in the 1980s. Additionally, Polimotor 2 uses carbon-fiber reinforcement while Polimotor 1 used fiberglass reinforcement. Polimotor 2 takes several cues from Polimotor 1 including the return of the four cast combustion chambers and the four machined cylinder bores which are mechanically incorporated into the engine.” 

 

My sources also noted that Solvay’s global leadership in automotive has had a long history of supplying high-performance polymers which improve powertrain efficiency, enable electrification, and reduce vehicle emissions. They list the following polymers offered for this project, Torlon PAI, Amodel PPA, Ryton PPS, Radel PPSU, AvaSpire PAEK, KetaSpire PEEK, Tehnoflon FKM, Technyl PA66, and additive manufacturing materials Sinterline and Technyl Powders. They say they will provide more detailed information on the specific components as they are designed and a final material selection has been made. Some new materials and technologies will also be highlighted by the company as the Polimotor 2 engine design progresses.

 

Want to find or compare materials data for different resins, grades, or suppliers? Check out Plastics Technology’s Plaspec Global materials database.

 

 

 

The 2015 SPE Research/Engineering Technology Award Nicely Goes To...

By: Lilli Manolis Sherman 29. May 2015

Having served on the SPE Automotive Division board of directors in many roles in the last 23 years, Suresh Shah is the 2015 recipient of the prestigious SPE International’s Research/Engineering Technology Award. Shah was honored for his longstanding contributions to automotive plastics and composites developments at companies like General Motors and Delphi Corp. The prize, which included an engraved plaque and a $2500 honorarium, recognizes outstanding achievements in the fields of plastic research and/or engineering technology and is one of the highest honors to an individual bestowed by SPE.

 

Throughout his distinguished automotive plastics career, Shah has worked in advanced processes such as gas-assist injection molding, co-injection molding, microcellular molding, hybrid plastic/metal molding, and direct inline-compounded long-fiber thermoplastic (D-LFT) composites. His other work has included materials development involving natural fiber composites, nanocomposites, D-LFT composites, and TPOs and TPEs.

 

Shah has authored over 70 publications, two of which have won SPE Best Paper Awards at the society’s ANTEC conference, and he holds 44 intellectual properties—27 U.S. patents, 10 defensive publications, and seven trade secrets. In addition, he was inducted as a Gold Level Hall of Fame Innovation Award winner at Delphi for his technical contributions and 40+ intellectual properties in December 2014. He led the development of the SuperPlug door hardware module in 1991—introducing gas-assist injection molding to GM.  For this technology, which has been translated to more than 30-million vehicles worldwide since 1993, Shah received SPE’s Automotive Division’s 2011 Hall of Fame award, and a host of international awards.

 

In 2009, Shah was named Scientist of the Year by the Engineering Society of Detroit and its 77 affiliate councils, and also received tributes from the governor of Michigan and the mayor of Troy, Mich. In 2003, he received the SPE Honored Service Member award for his contributions to the SPE Automotive Div. Two years earlier, he was inducted as a Technical Fellow in SPE and a year before that he was inducted into Delphi Automotive Systems’ Innovation Hall of Fame—again for his technical contributions to the company.

 

In 2000, his work on TPO skin formulations for GM’s Pontiac Bonneville sedan won the SPE Automotive Div.’s Interior Product innovation award. In both 1996 and 1998, Shah was nominated for the Boss Kettering award at GM for his efforts bringing innovation into production that has significant impact on corporate profit. And in 1997 he was given GM’s Presidential Council Honors Award.

 

Other technologies he worked on that won awards include the SPE Automotive Div.’s Body Interior category for the NUMMI (New United Motor Manufacturing, Inc.) assist grip handle in 1991, and SPI’s Award of Excellence for a composite window guidance channel in 1990.

 

Want to find or compare materials data for different resins, grades, or suppliers? Check out Plastics Technology’s Plaspec Global materials database.

 

 

 

 

Colored PET: Pretty To Look At; Headache For Recyclers

By: Heather Caliendo 28. May 2015

oPTI lightweight foamed PET bottles from Plastic Technologies Inc (PTI). The company says the process enables white or silvery colored bottles to be made without additives. 

 

PET. Thanks to its hygienic, strong and extremely lightweight characteristics, the packaging industry has embraced the material. And don’t forget that PET is the largest material recycled in both the U.S. and Europe. Traditionally, unpigmented PET has the highest value and the widest variety of end-use applications for recycling, according to the Association of Postconsumer Plastic Recyclers (APR, Washington, DC, USA).

 

But trends aren’t always about what’s easy and right now, many brands are taking a new path: colored packaging. The idea behind packaging with bright colors is pretty simple: it produces bottles with striking visual attributes and offers the potential to give brands differentiation in the marketplace. But this ‘colorful’ world of packaging could be problematic for recycling.

 

The trade group Plastics Recyclers Europe (PRE, Brussels, Belgium) recently discussed how the markets of milk packaging, home and personal care are switching from HDPE to PET for cost, marketing and sustainability reasons. However, this market shift could bring about more than 300,000 additional tones of colored PET, including black and white colors. PRE warns that the PET recycling markets can’t afford to absorb these extra colors.                                               

              

“If collected and sorted together, these numerous colored containers will need extra sorting in the PET recycling plants,” the organization stated. “In order for recyclers to sell this colored fraction, the material will have to be tinted in black or grey, but no market currently exists for such a material in high quantities.”

 

According to the APR, the use of translucent and opaque colors is for bottle-to-bottle and engineered resin uses. Although newer sorting technology is capable of identifying white PET from other PET colors, much is also problematic and should be examined for their impact on the recycling process. Inclusion of nucleating agents, hazing agents, fluorescers and other additives for visual and technical effects should be examined specifically by the reclaiming industry for impact on the overall plastic bottle recycling stream, the APR states.

 

PRE says that its data shows that if PET milk bottles contain TiO2, the recyclers’ end product will be highly contaminated. For example, the transparency of clear recycled PET will be reduced (i.e. haze affect), while colored recycled PET will have TiO2 up to 5%. In both cases, this will lead to a fall in the use of recycled PET on the market, the group states.

 

“These ‘colorful’ future trends will weaken the image of PET as a recycled product. Additionally, it will create great difficulties for the PET recycling industry, which already has other market barriers to overcome,” the group said. “Furthermore, the existing HDPE recycling industry, which already has a market for colored HDPE applications (e.g. the pipe industry) will suffer if colored PET continues to grow.”

 

The solution? PRE believes its full body sleeves/labels that could still produce a colorful effect. But let’s not forget that full body shrink sleeve labels also present plenty of problems in the recycling process. PRE says it calls on the PET and HDPE value chains to join efforts to avoid breaking the circular functioning of these recycling streams.

 

What are your thoughts about this? Should PET have a colorful future?




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