CLEVELAND—A panel of industry veterans looked into the future of technical compounding at Compounding World 2019.
Tom Drye, Jean Sirois and Frank Roederer each answered questions from moderator Chris Smith, editor of online magazine Compounding World. The event was held May 8-9 in Cleveland.
Drye, vice president of emerging markets and innovation with Techmer PM in Clintonville, Tenn., sees opportunities in lightweighting for electrical and autonomous vehicles. He also described 3D additive manufacturing as "an emerging market."
Sirois, managing director of strategic planning and acquisitions with RTP Co. in Winona, Minn., agreed that lightweighting "will be the future growth of the business," not just in automotive, but in any replacement of metals. He added that recycling "has to be part of everybody's business plan."
Roederer, a former executive with A. Schulman Inc. who's now president and CEO of Gaylord Chemical Co. L.L.C. in Slidell, La., said that compounders need to emphasize the value that they bring to the supply chain.
"The big polymer producers want big runs and converters of film and parts don't want to deal with the complexity of additives and colors," he said. "That's what we do as an industry—we deliver services and lot sizes that the big guys don't want to do."
Threats facing the industry include negativity surrounding the image of plastics. "Anyone born after 2000 has a negative image of plastics," Sirois said. "We haven't communicated the benefits of plastic well."
"We sell ourselves short completely on what plastic contributes to mankind," Roederer added. "Plastic affects food supply, electricity, everything. But as an industry, we're doing a lousy job of telling that message to the world."
"Plastics aren't bad, it's just a matter of what to do when we're done using it."
And although the global economy of recent years has allowed for growth, Drye said that technical compounders still should be prepared for a recession. "We're in a good position, but we can't forget that these things go through cycles," he added.
Technical compounders also are continuing to work to meet customer expectations. "At the end of the day, customers are looking for solutions to their current challenges," Roederer said. "They want to know how we can provide them with a competitive advantage."
Techmer's customers are looking for new ways to use additives and for quicker response times, according to Drye. At RTP, Sirois said that customers want consistency of product, pricing and supply. "They want the same material if they move to Mexico or China," he said.
The role of independent compounders also has been changing as some firms have been acquired by resin makers. Schulman was purchased by LyondellBasell Industries last year. Celanese Corp. last year bought Omni Plastics L.L.C. of Evansville, Ind., and Next Polymers Ltd. of India and has made five compounding acquisitions since 2014.
"We pride ourselves on being independent and unbiased," Sirois said. "There's no upstream material that we need to push."
"We don't necessarily like the trend of resin companies buying into compounding, but it's happening because they see value in going downstream into compounding."
Independent compounders "bring an unbiased solution to the customer, whereas resin companies might move in the direction of their base resin," Drye added. "Some M&A deals have been good, but some haven't been good for the industry."
Large resin makers can have trouble handling complexity or working with volumes that "aren't big enough for them to worry about," Roederer said. "And service can be affected after deals."