Rotomolding growth outpacing economy

Posted August 24, 2012

Owners of rotational molders are a hardy bunch. So are their plant workers — toiling in the unrelenting heat of this summer. Although rotomolding represents a tiny slice of the plastics industry, it’s a robust sector capable of turning out some very large products.

And rotomolding is growing. The Aug. 27 issue’s rotomolders ranking of 125 companies shows the average sales per company increased by 9 percent. For most of the companies, the figures on the chart show 2011 vs. 2010.

“If it really is 9 percent, or 7 percent in real terms [adjusted for inflation], that’s very good because the economy generally for the last year and a half — over the period they’re reporting on — at real terms grew at about 2 percent, and when taking into account inflation, sales grew at 4-5 percent,” said economist Peter Mooney.

The Plastics News rankings are admittedly unscientific, and they rely largely on companies to report the numbers. But they suggest rotomolding is outpacing the U.S. economy.

Certainly, resin prices account for some of the story. According to PN resin data, prices for linear low density polyethylene increased 7 percent in 2011 over 2010. High density PE gained 8 percent. As the economy rebounded, rotomolders were able to pass at least some of the higher costs through, leading to sales gains. But Mooney also credits the ingenuity of rotational molders themselves.

“Instead of being locked into one or two markets, what the rotomolders do is become very agile, and they come up with interesting proprietary products of their own,” Mooney said.

Mooney runs Plastics Custom Research Services in Advance, N.C., where he studies rotomolding and other plastics processes.

As the smallest sector of the plastics industry, rotomolding is dwarfed by the largest, injection molding. Even so, some rotomolders often make big headlines in their hometowns, where they can be major local employers:

* We feature a good example on Page 1 of the Aug. 27 issue. Seljan Co. Inc. is expanding in Lake Mills, Wis. But this is not just any expansion: The family-owned company and its 100-some employees are moving into a gigantic 500,000-square-foot building that sat vacant for several years. Obviously, the rotomolder, mold maker and metal fabrication company won’t need all of that space, so officials plan to lease out some of it and use some for future expansion.

* Also in that issue, we report how Trilogy Plastics Inc. has renovated an empty warehouse in Alliance, Ohio. In 2005, Trilogy built a 105,000-square-foot headquarters plant there. The new operation will handle longer-running projects with dedicated finishing and automation, helping Trilogy cement partnerships with customers.

* Another Ohio rotomolder, Hedstrom Plastics, helped solve a problem common to many small towns. What do you do when Wal-Mart builds a supercenter next to the interstate and abandons the original Wal-Mart? In Ashland, Hedstrom adapted the store into 129,000 square feet of manufacturing space. Hedstrom has bought a rotomolder of trash dumpsters, two smaller rotomolders and the worldwide distribution rights to a line of fitness balls.