Performance Plastics – learn about plastic

In this video we’re going to talk about plastic: What it is, that there are different types and a glimpse of what you can make with it. Okay, so I’m sure you already know about some things about plastic. I mean it’s everywhere around us: Jerry cans (watering cans), packaging, flower pots, toys, containers, cups. A lot of stuff we have is made from plastic. You can literally find this on any place in the world Even in places where we don’t want to have it… and last year we produced a lot of it. I mean I cannot even imagine how much that is. In fact I couldn’t even pronounce it that’s why I wrote it down and this number is still growing every year because we keep producing more new plastic.

Which is kind of weird because on the one hand is made from oil which is a precious fossil fuel we’re running out of and on the other end it ends up on places in the world where we don’t want it, damaging our planet and environment In fact research says that less than 10 percent of our plastic actually gets recycled, so of all the new plastic we make a lot of it ends up in the wrong place. Time to get recycling, right? So plastic often looks and feels the same, but it’s probably not. In fact there are dozens of different types of plastic out there, but you can narrow it down into two main categories. So, for instance, this bowling ball is a thermal set, and this lunch box is a thermal plastic. And the biggest difference, is that the lunch box you can always remelt it so when you’re done with this you can melt the plastic again, and turn it back to another shape or its original shape.

And this bowling ball is made from a very hard polyurethane. It’s molded into this shape and afterwards you cannot remelt it. This is basically a block of material which you cannot really do anything with. And this one you can just remelt it and reuse it again. And luckily about 80% of the plastic is made from this type, which is good thing because this one is easy to recycle. In fact it often has this little logo on the bottom, which says that you can recycle it And this is what the plastic looked like as a raw material: small pellets that are used over the entire plastic industry to create new things.

Huge High Density Polyethylene rod

But even within this group of plastic there are many different types. But we can narrow them down again into several main groups, which basically all the plastic around you is made from. And each of them has their own difficult technical name like “Polypropylene”, “Polystyrene”. I don’t know where they make it so difficult, so often the shorter version is being used. It’s hard to tell the difference between two types of plastic. I mean they can have the same color, feel the same, and look the same but still being a different type. And this is actually the main problem with plastic how to separate the different types of plastic because they all have different properties, behaviors and melting temperatures. But there are a few tricks on how to get this done. Trick number one (and this is by far the easiest one): is look for the logo. If it has a recycle logo, you can see which type of plastic it is so this one is made from polypropylene.

Unfortunately not every plastic product has a logo like this… And then you need another– Trick number two is to remember it and this is actually often done in recycling plants. So for instance, flower pots: made from polypropylene Lego is made from ABS. The bottle caps are made from HDPE. But as you can imagine, there’s a lot of different plastics out there; a lot of things to remember so this goes wrong, and isn’t 100% accurate.

Another one is to look at the visual properties. For instance, polystyrene has this breakable sound, whereas polyethylene is more flexible and tough kind of plastic. And then there’s another technique which is called “the flame technique”. We don’t recommend this, but it’s a technique, so we’re going to show you. For instance, if you burn plastic you get a little flame, so, this one has a nice yellow flame. If we’re going to fire up this one… So and this has, like, this dark smoke, which is polystyrene. Like I said, we don’t recommend this technique. Yeah, it’s not nice. The last one is the floating technique. This is quite an interesting one, so, let’s say you have a lot of different types of plastic, mixed.

You can put them in the water, and some will sink and some will float. And then we’re going to add some water. So you can see some plastic floats, some will sink. But if we add some salt… So as you can see: the polypropylene and polyethylene floats, and the PET (Polyester or Polyethylene Terephthalate) sinks. And you can do this with other types of plastic as well by changing the density of the water, And all the more detailed information: like the different densities, or the different flame colors, or the visual properties you can download in our download pack.

So as we just learned there are many different types of plastic out there, and the ones that you can recycle basically all work according to the same principle. You need some heating and some pressure to mold it into something new and that’s pretty much the basic start of the entire plastic industry. They all work according to these principles. But they have a lot of variation, and by making a different combination of these techniques they can make a whole range of different products. And our machines are based on these techniques as well, only, simplified and made with local tools and materials, so you can build them yourself.

Barstow Thermoforming

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Barstow and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Plastic Market

Barstow Plastic Information and Training

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Plastic Sheet Price

GM Will Win With Mechanical Engineering, Not Financial Engineering (Video) - General Motors Company (NYSE:GM)

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they're made from recycled plastics

Yes, he's heard the career advice line from The Graduate. ("I just want to say one word to you: plastics.")

And yes, he's gotten used to the jokes about his business's name (The Plastic Lumber Co.?).

And no, he doesn't mind them at all.

You see, if you're Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It's not quite as silly as it sounds.

Robbins is president of the Akron company, which takes recycled plastics -- milk jugs are a primary source of raw material -- and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World.

And no doubt there's a desperate need for someone to do something with what the industry calls postconsumer (used) plastics.

With Americans producing 160 million tons of solid waste a year -- that's better than three pounds per person per day -- landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

The problem is that a lot of people have been rubbing on the genie's lamp for a long time. The first reported use of recycled plastics dates back to the 1930s -- a Du Pont chemist with a sense of humor used some postindustrial plastics to make a length of fence -- so the idea is not exactly new.

And Robbins is not exactly without competition. The notepad holders, in-and-out-trays, and trash cans produced by Rubbermaid Inc. are made in large part of recycled plastics. Plus, companies such as Du Pont, Dow, Amoco, Mobil, and Occidental have all begun joint-venture projects aimed at making recycled plastics widely available.

But despite the growing interest, there are two major reasons why the idea of recycled plastics has not caught on -- and Robbins must deal with both.

First, there's no consistent source of raw materials. Recycling is still not mandatory nationally, and even those states or towns with recycling programs don't always require that plastics be left by the curb, believing -- mistakenly -- plastics can't be recycled. (They can. But since traditional recycling methods can't guarantee the purity of recycled resins, recycled plastics are not used in packaging that comes in direct contact with food.)

Cost is the second reason that everything from marina docks to highway dividers is not yet made from recycled plastic. If you use recycled plastics as a substitute for virgin ones, as the carpet industry is doing, you'll save money.

But if you use recycled plastics to replace materials such as wood and concrete, the economics change. Robbins's picnic tables and parking stops cost up to twice as much as those made from traditional materials.

While that's a problem, it's not a insurmountable one, says Robbins, who has worked as everything from a restaurant manager to a stockbroker (see "The Founder," page 4). His sales pitch stresses that since plastic lumber and plastic concrete last longer than their traditional counterparts, they're actually cheaper over the long haul.

Besides, as Robbins points out, the potential market is huge. In 1989, only 250 million pounds of plastics were recycled, yet the demand for materials that plastics could replace was thousands of times greater, according to Robert A. Bennett, associate dean of the college of engineering at the University of Toledo. For example, last year Americans used some 3 billion pounds of treated lumber, and roughly 7.4 billion board feet of wood just to build pallets.

Robbins is not looking to replace all that wood -- just a splinter of it.

And he's convinced his timing is right. Some 20 years after the first Earth Day, taking care of the environment is suddenly fashionable again. Everyone from McDonald's to Dayton Hudson department stores is using seedlings as a sales promotion tool. Time magazine made "Endangered Earth" its planet of the year, and George Bush will tell anyone willing to read his lips that he is "the environmental President."

Even the plastics industry has gotten into the act, creating impressive-sounding task forces (The Council for Solid Waste Solutions) and running commercials during the Sunday morning news shows explaining that it, too, wants a cleaner environment. When you have politicians and Fortune 500 CEOs tripping over themselves to be ecologically correct, it's relatively easy to get people to listen -- for a little while, anyway -- when you tell them you're selling products made out of recycled plastics.

Robbins is making the most of the opportunity. Early on he hired a public-relations firm that has made his company better known than his sales would justify, and the attention is beginning to pay off. "We're getting inquiries from businesses and governmental units we never knew existed."

When he returns those calls and letters, Robbins is quick to stress the advantages his goods offer. Products made from plastic weigh less than concrete (that means fewer injuries and workers' compensation claims), require less maintenance (unlike wood or concrete, they don't need to be repeatedly stained or painted), and are virtually impervious to the weather.

Plus, plastic lumber can be sawed, nailed, drilled, glued, and bolted, just like its wood counterpart.

In 1989, convinced he was onto something, Robbins hired Ken Boersma, who had worked at another plastics company on recycling, to create a proprietary extruding machine, and The Plastic Lumber Co. was born.

* * *

Marketing: Robbins started with a great idea: he'd let his market tell him what his sales, positioning, and pricing strategy should be. Unfortunately, the market is speaking with about as much clarity as was heard from the tower of Babel.

And the message that is getting through is certainly not the one Robbins expected.

Before opening his doors last September, Robbins knew his potential market was huge. For example, anyone with a parking lot might need The Plastic Lumber Co.'s car stops (the rectangular bar that keeps a car from taking up two spaces) and speed bumps. So Robbins tried to narrow the field to places where he'd have the easiest time making the sale.

"I figured we should go after universities and municipalities," says Robbins. "With landfills being close to capacity, government seemed a natural. The universities also seemed a good fit, given the environmental appeal of the product.

"I thought there might be a consumer market as well. I could see selling our picnic tables through hardware stores. And I knew there'd also be a commercial application -- things like pallets -- but I wasn't really going to chase that hard at first."

What happened? Commercial sales now account for virtually all of his revenues.

Why? Because the huge marketing advantage Robbins thought he had -- that he's using only recycled plastics -- produces nothing but yawns when he explains it to schools and government.

Yes, they quickly acknowledge, using recycled components is a good idea. Now, let's talk price.

The moment that happens, Robbins is on the defensive. His parking stops cost about $22.50, or about 50% more before installation, than those made out of concrete. His picnic tables are easily twice the price of their wood counterparts.

But, Robbins argues, those prices are misleading. You must look at the long-term costs of using plastic versus concrete or wood. "Somewhere around 5 to 10 years out, we actually become cheaper, and we get more so every year after that, because there are no maintenance costs."

That may be, but his product is still more expensive initially. Cost savings over a product's lifetime can be a very difficult idea for schools and especially municipalities -- which are used to awarding contracts to the lowest bidder -- to understand.

Robbins's marketing thrust isn't misguided. The biggest company in this tiny field is getting a very large part of its revenues from a municipality. But at $3.5 million in sales, Hammer's Plastic Recycling Corp., in Iowa Falls, Iowa, can afford to have a marketing staff. Hammer's people met continually with city of Chicago park department officials, for instance, to answer their questions, eventually working out a deal for landscape ties for playgrounds and plastic slats for park benches.

But Plastic Lumber Co. is woefully undercapitalized. There's no money for a marketing staff. In fact, there's not much of a staff at all. Robbins and Boersma had a falling out, so the entire company consists of Robbins, his administrative assistant, and the four plant workers who actually turn out his product.

If you're running the plant and front office, and also chasing every sales lead that comes in, you don't have a whole lot of time to spend educating some civil servant about the long-term advantages of plastic lumber. While there are growing signs that states and municipalities may be willing to exempt recycled products from the traditional bidding process, that hasn't happened yet.

Fortunately for Robbins, businesses get the concept right away. Some 80% of The Plastic Lumber Co.'s revenues come from a placement in a building-supply catalog.

But that's not the kind of sales mix Robbins was looking for. For one thing, he's now overly dependent on that one distributor, and for another, selling to businesses just about locks him into commodity status.

When Robbins was punching numbers into his Lotus spreadsheet, trying to forecast potential profit margins, he assumed he would average 20% pretax profits. In part, he'd do that by keeping his costs low -- while Robbins budgeted raw materials cost at 44% of sales, labor was expected to be just 9%. But he also expected he'd fetch a premium price for his products.

First off, he thought he'd get a bit more for shaping that recycled plastic into picnic tables and the like. "After all, every time you punch a hole or screw in a bolt, you're adding value, and people are willing to pay for that," he says. And given the unique nature of his goods, plus the lack of competition in the field -- financing for recycling companies has proven hard to come by -- Robbins figured people would be willing to pay a little extra for something that was environmentally on the side of the angels.

Well, some consumers might. And so might some universities. But businesses tend not to be that altruistic. "Purchasing agents are trained killers" is the way Robbins puts it. So far, pretax margins on the speed bumps and car stops he has sold to commercial accounts -- businesses tend not to buy Robbins's value-added products -- have been lower.

Bothersome as this is, at least Robbins knows there's a market for his paving products. With plastic lumber . . . well, let's quote the business plan: "The plastic lumber market can only be considered in its infancy."

To be honest, no one knows what kind of recycled plastic products -- if any -- the market wants, and that's an important point, because when it comes to recycling, there is plastic and then there is plastic.

Some companies, such as Wellman Inc., headquartered in Shrewsbury, N.J., have chosen to specialize. Wellman deals almost exclusively with polyethylene terephthalate, which is used to make soda bottles. Empty soda bottles are traditionally recycled into things like carpet fibers and the linings of parkas and sleeping bags.

The problem is that the equipment needed both to recycle polyethylene terephthalate and to convert it into usable products is expensive. The Plastic Lumber Co. avoids most of that cost by being less fussy about the plastics it uses. It either buys raw materials or cleaned and sorted scrap, which is then melted down and extruded.

However, since the resulting plastic is a blend -- a catsup bottle, for example, which might be part of the company's raw materials mix, is made up of five to seven different plastics -- it's impossible to predict the quality or strength of the resulting products.

That's why the company focuses on making simple products in which the specific properties of the plastic are not important.

Robbins started by selling mailbox posts and picnic tables because they are relatively easy to make. "We're not all that skilled as craftsmen," he says with a shrug. He'll be more than happy to add to the line -- within the limits of his plastic's quality, of course; making a plastic four-by-four to support a swing set would be out of the question, for example, because its strength would not be up to code. But first he needs the market to tell him what it wants.

Ironically, Robbins is finding himself with more time to listen than he expected. His products turned out to be very difficult to sell during cold weather. Nobody is going to go and put a speed bump on the ground when it is 20 below zero, and very few people go looking for picnic tables when they have to shovel their way out the front door. "I didn't realize the extent to which we would be affected by the weather," he says. "Next winter we will concentrate our marketing efforts on the southern part of the country, and on building inventory."

That assumes that (1) he'll have a better handle by then on who his customers are and what they need and (2) his money will hold out.

* * *

Capital: If Plastic Lumber doesn't make it, it won't be because Robbins overspent on decorating.

As you walk into Robbins's fifth-floor offices in downtown Akron, you have to hurdle the tires strewn about and duck under stunning pictures of elaborate food displays. Robbins sublets from his brother-in-law, a commercial photographer who does a lot of work for area food and tire companies. Says Robbins: "By sharing space with him, I didn't have to worry about going out and buying fax machines and copiers."

The same sense of frugality exists throughout the company. Robbins drives a 1982 Oldsmobile diesel that had been in mothballs. He pays $2 per square foot -- about half the going rate -- for his production facility in an old tire plant that Ohio is trying to turn over to small businesses. And by marrying interest from a CD to a term loan in a linked-deposit program, Robbins has borrowed $154,000 at about prime.

But the money is going quickly, thanks to a combination of lower-than-budgeted sales and cost increases primarily caused by problems with the extruder. "We've had to rebuild the chilling system and the molds a few times," says Robbins. "What has happened, given the cost overruns, is that we've gotten one machine for the price of two."

The upshot: the company lost $55,000 during its first three months. And when sales failed to come close to forecasts this past January and February, Robbins reduced salaries and eliminated his public-relations program and most of his advertising. The Plastic Lumber Co. is still losing money.

With Robbins having contributed about his entire savings, and the banks reluctant to loan any more, what is needed -- and soon -- are additional equity investors. (When the company was formed, Robbins sold stock and options totaling 24% of it to a friend for $50,000.) "We've been putting off looking for outside funding," says Robbins. "The better shape we can get the company in before offering stock, the higher the valuation will be. But we are now starting to hold serious meetings with venture capitalists."

The question is, of course, whether the money will come in time -- and in sufficient amounts. Even if it does, there are other problems. Is it reasonable to expect university administrators and civil servants to be farsighted? Will they pay higher prices today for savings tomorrow?

And what about Robbins's embryonic marketing program? There's little doubt that someday there will be a huge market for products made from recycled plastics, but which products?

And even if Robbins does figure out which products the market wants, can he muster the technical expertise to make them? Good questions all, says Robbins, who remains sanguine nonetheless. "We'll be OK."

We'll see.

-- Research assistance was provided by Leslie Brokaw.


EXECUTIVE SUMMARY

The Company:

The Plastic Lumber Co., Akron

Concept: Recycle plastics into products such as picnic tables, mailbox posts, and speed bumps

Projections: Profits of about $6,000 in 1990, almost $500,000 in 1991; pretax profits of 40% and 44%

Hurdles: Defining market; convincing customers that paying more now for products made with recycled materials will save them money in the long run; overcoming lack of technical expertise


THE FOUNDER

"I've been preparing for this my whole life," says Alan E. Robbins, referring to the company he started last year. Given that he's constantly discussing and/or handling such materials as polypropylene and high-density polyethylene, you'd think he was talking about years of toil in the chemistry lab. He's not.

Robbins, a former industrial-technology major who "finished in the upper 98% of my class; thank heaven for that other 2%" at Miami University in Oxford, Ohio, is talking about how the past 20 years have equipped him to run his own business.

He began work in Oxford running restaurants (good for learning how to manage people) and went on to run a mom-and-pop supermarket (people skills again, inventory control, marketing). From there Robbins worked as a headhunter (telemarketing, selling) and eventually a stockbroker ("great financial training"). Before starting The Plastic Lumber Co., Robbins was director of merchant sales for Rondy & Co., an Ohio-based reprocessor of scrap rubber and plastic.

"Everything I've ever done has led me to running The Plastic Lumber Co.," says Robbins, who is putting his money where his mouth is. In budgeting his salary for the start-up, he took about a 50% pay cut -- to $55,000 a year. Since November, given the company's slower-than-expected start, he's been working for free.


FINANCIALS

Plastic Lumber Co. Operating Statement

1990 1991

Sales $495,000 $2,075,000

Cost of Sales

Raw materials 222,000 913,000

Direct labor 44,500 186,750

Rent 21,132 23,000

Electricity 11,535 48,349

Total Cost of Sales 299,167 1,171,099

Gross Profit 195,833 903,901

Gross profit % 40% 44%

Expenses 1990 1991

Production 53,120 150,568

Marketing 42,000 72,000

General & administrative 55,000 114,684

Finance costs 15,000 14,737

Depreciation 10,529 41,736

Other 13,400 24,000

Total Expenses 189,049 417,725

Net Income 6,784 486,176

(continued)


WHAT THE EXPERTS SAY

FINANCIER

NANCY PFUND

General partner, Hambrecht & Quist, a San Francisco venture capital firm; co-manager of its $17-million Environmental Technology Fund, which has a position in a recycling company

I think Robbins was correct in perceiving there's a tremendous market opportunity here. The concept of the business, broadly defined, is sound; there will be exponential growth in the waste minimization segment of the market.

But I think Robbins has made things difficult for himself by focusing on the lower end of the business. By taking mixed plastics and making something that can't be used for much because of the tensile strength, he's artificially narrowed his business opportunities to the commmodity level. Recycled products with the characteristics of virgin materials -- that's where money will be made. If I were Robbins I would upgrade the technology and therefore the end product.

How do you do that? He needs to get some help where he doesn't have the background or the inclination. He's got marketing contacts and distribution experience; he should weave that into some kind of relationship with a plastics recycler with a little more know-how. He does have a little business there that could feed into the activities of another firm. There are all kinds of options: a co-marketing arrangement, or a subcontractor or OEM relationship. He's certainly got a lot of energy and enthusiasm, which could be put to better use.

One of the common mistakes is to think people are going to buy products just because they're environmentally correct. You can't rely on that kind of altruism. It certainly can help. But people are very dollars-and-cents oriented. Recycled plastics products do not have to be more expensive than what they're replacing, and in the long run they can't be. In the long run they have to be cheaper.

If Robbins is lucky, maybe he can bring in the top line, but I think his costs are going to increase. The company is very thin, and he can't run a business effectively and wear all the hats at the same time. But he does have the option of finding someone who will work with him. He's developed a market and has some customers, which is an asset that should be valuable to someone.

OBSERVER

THOMAS J. PENRICE

Director, Plastic Consulting for Strategic Analysis Inc., a Reading, Pa., firm

I'm very bullish on Robbins's idea and his chances for success. I think his sales forecast is actually quite modest. And there may even come a time when his raw materials cost -- which is relatively high now -- could be negative. As communities collect all this plastic, they're going to need somebody to take it off their hands.

However, there is a major problem. He has seriously underestimated his marketing costs. If he uses the $72,000 he has budgeted (on $2 million of projected sales) to hire a marketing person -- and he'll pay at least that to get someone qualified -- there won't be any budget for mailings and travel. You have to go to the trade shows and network.

Eventually there'll be many viable consumer and industrial applications for recycled plastic products. However, Robbins's company must first survive the next several months. Instead of letting his customers dictate his marketing approach, I would begin by working directly with major producers of plastic resins -- the Dows and Du Ponts -- and work out a deal where they would give him the plastics they can't use in their recycling programs, the co-mingled plastics, and see if they would be willing to buy the picnic tables and the like from him. These companies all have active recycling programs and are eager to promote recycling. Once the applications are demonstrated to be practical and cost effective, however, Robbins has got to reach a broader market.

COMPETITOR

BRIAN HARPER

Technical director, Hammer's Plastic Recycling Corp., Iowa Falls, Iowa, The Plastic Lumber Co.'s largest competitor

They're going to be struggling to stay alive unless they do something clever, and there doesn't seem to be anything clever on the horizon.

First, the company is grossly undercapitalized. And it's not spending the little money it does have on the right things. It's marketing that drives companies that make plastic lumber, yet Robbins has scaled back his marketing efforts to save money. He needs large orders to survive, and without a marketing budget, he's going to be hard pressed to get them.

Even with a marketing budget, he would seem to be in trouble because he doesn't have a marketing strategy. He's going with the flow, and that's a big mistake. There is no inherent market for plastic lumber; you have to create one. I think Robbins believes -- as a lot of companies that are no longer in business once believed -- that his product is so good that people will fight to buy it. That's wrong. It's always been wrong.

But in addition to overestimating sales and underestimating marketing expenses, he has another problem. There is no depth of technology. Ken Boersma has left. Who's going to replace him?

If I were running their company, I'd go out and recruit a good marketing man and a good technology person, but I don't see how Robbins will be able to attract the money he'd need to do it. When potential investors visit the company's offices and see the lack of staff, they're going to conclude the company is close to broke. The venture capitalists won't trust the company with their money, and customers won't trust it with their orders.

Plastic Lumber is where we were four years ago, but we had marketing and we had technology people who allowed us to create new products. They have neither.

CUSTOMER

GLENN TROWBRIDGE

President, National Association of County Park & Recreation Officials; Park & Recreation Director for Clark County (Las Vegas), Nev.

New products have to do something above and beyond what old ones do. There are a hundred manufacturers of picnic tables and speed bumps out there already. If Plastic Lumber came out with, say, a vandal-proof bench you could wipe spray paint off of, now we're dealing with something. But customers already have long-term relationships with manufacturers, and they're not going to set them aside just because somebody says, "Hey, I've got a newer product." I'm approached at least once a month by picnic-table manufacturers; it's an incredibly competitive field.

Robbins will have to prove his claim of extended life expectancy -- he can't just come out and say it costs more but is going to last twice as long. The documentation seems absent at this point.

If the company isn't competing on price it's going to have to convince customers to raise the standards of what they spec -- for instance, to require that benches last six years -- and then the company will have to prove that its product meets those standards. Convincing buyers and architects to stop specifying one product and specify something more stringent, on the basis that it's better for them, is an uphill battle. But that's how the game works.

Barstow

The Basics of Stretch Blow Molding PET Containers.


San Bernardino Plastic Delrin

Rialto Heat Resistant Plastic Film

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Rialto and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Nylon Sheet

Rialto Plastic Information and Training

[ILLUSTRATION OMITTED]

OEM engineers and designers get to do the easy part--they say, "This is what we want." Or, "It needs to be smaller." Or, "We want it made from this instead." Molders have the hard part--they need to know the latest technologies, the most up-to-date material science and the best processes to make it all happen--and happen quickly ("By the way, we'd like that first prototype in about two weeks."). No pressure, right?

Then there are the heightened regulatory controls to worry about--OEMs want to spread the risk by making vendors as responsible for meeting compliance standards as they are (or sometimes more so). These expectations have increased the need for better controls and documentation by the molder, especially as medical devices become smaller and more complex.

Every vendor knows that OEMs are shortening their supply chains, looking for partners who can do more and function as "one-stop shops" to provide multiple services. This, of course, makes everything move faster, including communication and decision-making. Molding processes that are in higher demand are overmolding, insert molding and multi component molding--these improve product functionality by combining the properties of multiple polymers (both hard and soft).

"For example, medical device designers are using two shot injection molding to move beyond soft touch and aesthetic features, by using the different materials for mechanical functions," said Jay Smith, chief of operations for Classic Industries Inc., a Latrobe, Pa.-based provider of injection-molded products.


Medical device companies are putting an even higher premium on cost reduction and overall cost consciousness--another reason these molding technologies are gaining in popularity.

"The market is demanding that injecting-molding companies offer molding solutions that can eliminate established assembly processes, thus reducing cost and offering a more robust product solution," said Tom Moore, technical sales manager for Leesburg, Va.-based Raumedic, a developer and manufacturer of polymer and silicone components via extrusion, injection molding and assembly. "From the purchasing side, the cost advantage is the elimination of labor-intensive assembly steps such as solvent or UV bonding. These molding techniques result in higher-performing products and also reduce the number of steps needed to make them, which improves quality."

As products get smaller with tighter tolerances, OEMs look for vendors that are committed to using automated assembly techniques to combine multiple components, reducing labor costs and increasing quality. This, in part, is due to increased interest in bringing outsourced work back from Asia--especially for more complex parts made from multiple materials, where the risks for quality problems are much higher overseas.

"Quality control tends to be inferior in many overseas manufacturing settings, which can neutralize the savings in labor costs," said Smith. "Also, because of the highly sensitive time-frames required for the turnaround of many of these deliverables, timely shipping from outside of the U.S. can be an issue. Automation, with its faster production speeds, can counteract the higher labor costs in America--combine that with the higher quality delivered by automation and the U.S. can be cost-competitive with Asia."

High-speed automation is definitely in high demand and has made significant advances over the last few years--for example, automation and injection molding press cycle times have been greatly reduced. Not only will companies that embrace automation secure their place in the OEM supply chain, they will be much more competitive in the global economy.

"Yushin and Staubi produce some very impressive robotic systems," said David Lennox, vice president of operations for C&J Industries, a custom injection molder and contract manufacturer based in Meadville, Pa. "We currently use Yushin robots on our presses and are expanding our usage of these systems to not only pick product from the molds, but to stage or load into secondary. processes, eliminating human intervention. We are also considering robotics for off-line operations. We are always investigating equipment that is flexible in our custom operations to perform the repetitive operations."

The Speed of Innovation

OEMs want their medical devices to satisfy the needs of their end users: improved patient outcomes, reduced hospital stays and improved recycling of disposable medical products--which are all opportunities for OEMs and their supply chains to develop more innovative products.

"The trend toward creating better patient outcomes has sharpened the focus on the engineering of plastics resins to help products and devices function better," said Smith. "The medical industry wants smart polymers that help products function better, and they also want products and materials that help counter healthcare-acquired infections."

OEMs are outsourcing much of this innovation (including material science, molding technology and assembly) to their manufacturing partners. However, as more control is enforced by the U.S. Food and Drug Administration (FDA), cost structures continue to increase and product margins erode.

"As a result, more emphasis is being placed on new market development and products to meet these evolving needs," said Mike Nowaczyk, vice president of operations at SMC Ltd., a contract manufacturing and molding company in Somerset, Wis. "The old engineering methods and standards need to change, because the cost of the product will not support the value proposition for the OEM or consumer. OEMs must continue to evaluate their own manufacturing portfolio and outsource accordingly to maintain shareholder value."

One way to bring costs down is by using better process controls. After many discussions with customers and potential customers, Raumedic discovered that one of the highest priorities for its clients was more inline process monitoring.

"The feedback we have received is 1) inline process monitoring increases the quality of the product as the molding process is being checked and dimensions are verified inline, and 2) a cost reduction is often seen as many companies complete a 100 percent inspection due to the criticality of the product," said Moore. "If in-line controls can be incorporated that identify critical dimensions and features, the customer can eliminate the incoming inspection and achieve an overall cost reduction, sometimes as high as 30 percent."

Raumedic uses specially designed in-line vision systems to confirm a product maintains critical dimensions.

"Our vision systems depend on the products and their key features," Moore explained. "For some products the vision system will check filling the part (no short shots), dimensions and inspection for imbedded particles. The tolerance range is about +/- 0.002 inches. For short-shot and air-gap control we utilize special pressure/temperature transducers that allow 100 percent in-line control of pressure and temperature within a qualified and validated process window."

Vision systems also can be used to monitor part ejection--a critical step in achieving and maintaining a successful manufacturing process.

"The smaller the components, the more difficult detection becomes as they are ejecting from the mold," stated Dan Tasseff, director of sales and marketing for Flomet, a Deland, Fla.-based custom manufacturer of metal injection molded components. "Vision systems play a major role in assuring that molds are not damaged due to a defective ejection of material."

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Technologies at the Forefront

The trend toward smaller components has a significant impact on various methods of molding and their capabilities, including metal injection molding. The feedstock is a custom blend of polymer and powder metals, where the formulation and particle size is critical to the moldability of the component. The process also requires precise process controls for the molding parameters to achieve the complex geometries of each component.

"For example, thinner walls and tighter tolerances are in higher demand," said Tasseff. "We can mold components with wall thicknesses of .005 to .020 inches (the lower limit for many companies is about .040 inches). Thin walls are especially critical in package configurations where the inside of the package houses a number of miniature sub-assemblies."

Conventional metal tools usually take four to six weeks to produce, but with stereolithography (SL) the complete process from computer-assisted design to fitted injection molds can be completed in eight working days. "As a result, costs and time to market are substantially reduced," said Smith. "Tooling produced on SL systems also offers a number of key technical advantages, including more ways to build complex geometries and tight tolerances."

A recent emphasis in tooling technologies is thermal management. Increasingly complex applications and molding processes require greater innovation in applying heating and cooling technologies to mold design. Traditional heating and cooling is done with either water or oil; cooling lines are created by drilling intersecting straight holes in the mold. Drilling straight holes limits where cooling lines can be placed--the biggest drawback to traditional cooling methods. The water or oil temperature must be controlled with a thermolator to maintain constant temperature as the mold runs and absorbs more heat from the cooling plastic.

In conventional molding, Phillips-Medisize, a provider of injection molding, silicone molding and extrusion based in Hudson, Wis., increasingly has leveraged the use of conformal cooling with additive construction of critical mold components. This technique allows for the manufacture of small, complex geometry cooling circuits that are not possible with computer numerical control or electronic drafting machine machining.

"We have been able to solve sink and other appearance issues with this approach," said Bill Welch, chief technology officer for Phillips-Medisize. "Benefits include better dimensional accuracy and faster cycle times. For example, cycle time with a standard one-cavity is 16.78 seconds; with a conformally cooled four-cavity mold the cycle time is 13.02 seconds, a 22.4 percent improvement."

Another cooling innovation is CO2 spot cooling. Phillips-Medisize uses this innovative technology to solve unique cooling issues, such as molding products that present long, thin core geometries.

"Usually core pins in the mold are too small to accommodate H2O cooling," said Welch. "In addition, the thermal expansion of the coring has to be controlled to avoid breaking the tip of a pin while maintaining a shutoff. The coring forms a .007-inch hole in the part. This part cannot be conventionally molded without the use of CO2 spot cooling. CO2 spot cooling can also be used as a substitute for water when specific areas (hot spots) need cooling. The liquid CO2 flows in through capillary tubes then expands in cooling channels, creating a snow and gas mixture with a temperature of -79[degrees]C. After removing heat the CO2 is exhausted to atmosphere. The use of CO2 spot cooling can reduce surface defects, warpage and long cooling times."

Another innovative process is multi-component injection molding, where hard and soft thermoplastic polymers are combined in one product without post-assembly.

"This is especially effective for applications such as sealing and connecting combinations of different thermoplastics," said Moore. "The soft component reacts chemically with the hard component and can only be separated through destructive force."

Raumedic has developed a unique process for piracy protection (anti-counterfeiting). The technology is the addition of microparticles during the molding process. The incorporated micro-particles provide every product with a customer-specific fingerprint that is undetectable without special equipment.

"The sandwich-type-designed micro-particles can be as small as 5 microns and enable a targeted, adjustable color coding with billions of possible combinations," Moore noted. "The use of special readers or suitable microscopes makes it possible to quickly and reliably verify whether a product is an original in-house product, or the result of a product piracy."

Kaysun Corporation, a provider of critical molding applications for medical, industrial and consumer markets based in Manitowoc, Wis., incorporates in-mold labeling to imbed graphics into the plastic being molded--an effective solution when graphics on the device degrade from cleaning, or wear and tear.

"Graphics are printed onto a thin film and then placed into the mold," said Mario Del Real, sales engineer for Kaysun. "When the plastic is shot into the mold the graphics are imbedded on the backside of the plastic. It takes some skill to perfect the right technique. Methods for holding the film in place prior to molding include applying an electrostatic charge or a vacuum. In-mold labeling can be a cost-effective way to add graphics to a part and eliminate the concern of the graphics wiping off or getting scratched. It also eliminates an assembly step."

A Complex Challenge

The trend toward more complex, miniaturized devices continues to challenge molding technologies. Component designs are becoming more complex as OEMs take advantage of different types of injection molding to reduce the number of parts in an assembly (and the number of steps).

"Today's demand is for smaller components for non-invasive procedures," said Tasseff. "A large percentage of what we are seeing in the market is similar components in design and capability--graspers, cups, end effectors, for example--but with smaller overall dimensions, which translates to tighter tolerances, thinner walls and more complex and precise features."

There is increased demand for micro-sized parts with more capabilities, especially in the spine, orthopedic, arthroscopic, cardiovascular, dental and neurologic markets. Such demand is creating new molding challenges.

"Controlling the shot size is very critical," said Scott Herbert, president of Rapidwerks Inc., a precision injection molding and micromolding provider based in Pleasanton, Calif. "It is also not that easy to create a tool that produces such a small, detailed part."

Micromolding requires advanced equipment, new tooling capability and more controlled science regarding material and material preparation.

"For example, creating a part that is implanted in the body, such as a bone screw, requires intricate detailed complex tooling to create the correct geometry (the lead)," continued Herbert. "The material needs to be prepared in such a way that the process of manufacturing does not degrade the material or create problems with the dimensions."

As medical devices get smaller and more complex with tighter tolerances, designers sometimes turn to more exotic materials, such as PEEK (polyetheretherketone). Although it is more expensive and presents molding challenges, its unique properties continue to draw interest throughout the medical device community.

"C&J recently completed a metal-to-plastic conversion for a large surgical device project," said Mark Fuhrman, director of sales and marketing for C&J Industries. "Even though using PEEK was extremely expensive, the injection molding process enabled our customer to integrate features into the components that eliminated machining and, in some cases, reduced the number of component parts. This ultimately gave the customer a double-digit cost reduction with a better-than-expected return on investment. PEEK provided the mechanical and heat properties required for the metal-to-plastic replacement. In some instances the metal parts were weldments that required machining and anodizing--our customer was able to avoid all three steps with the molded part alternative."

Increased requests by OEMs for the use of high-cavitation molds and automation continue to stretch the limits of the injection molding process. The ability to build and support automated parts handling and inspection equipment is a necessity--they require 24-7 technical support.

"The challenges of higher-cavitation molds are numerous," said Lennox. "When a company like C&J moves from a typical molding operation of 4-8 cavities to 32 and 64 cavities, every process in our manufacturing environment has to change with it. Inspection processes have to be compressed and water delivery systems need more capacity."

The cost of producing bad product increases dramatically when you move to 32 and 64 cavity molds, Lennox added. "Everything you do must be right and checked and verified it's correct the first time to insure zero defects."

A Glimpse of the Future

Medical device companies are approaching cost-reduction process by shortening their supply chains and contracting with vendors/partners that provide multiple manufacturing techniques and processes, materials, development capabilities and deep all-around expertise. Molding companies will continue to be challenged by working with new advanced compounds including biomaterials, anti-microbial formulations, new co-polymers (for example, silicone/polyurethane with increased silicone content) and new silicones (UV-cured silicone).

"The medical industry is shifting toward suppliers with multiple manufacturing capabilities that use automated assembly techniques to combine multiple components in an effort to improve functionality and reduce costs," said Moore.

According to Tasseff, metal injection molders that can adapt to the changes in the market quickly and efficiently will prove to be the leaders in the industry.

"Success and growth will be achieved by being recognized as a solutions provider that has ability to meet the demand in various markets through the development of new and exciting capabilities--thin walls, smaller and highly complex components, etc.," he said.

With the rising costs of overseas manufacturing, longer lead times and quality concerns, the cost to manufacture overseas is starting to lose its advantage.

"Some companies are looking to bring business back from Asia because of the increasing costs in China, quality concerns and costs to ship," said Del Real. "Competitive manufacturing in the U.S. is starting to take hold again and we are seeing this trend in several markets. When you take the entire cost into account, the cost difference may not be great enough to risk especially on new program launches."

Faster time to market is a strong theme for 2012 and certainly will affect manufacturing in the future. OEMs are challenging molding suppliers with unprecedented timing requirements to deliver prototype samples and to be production-ready.

"This challenge is enhanced as we see many large OEMs farming out new product development projects to design firms," Moore explained. "Many of these design firms are looking for quick turnaround times (1-2 weeks) to have parts to check for functionality. In many cases, these 'development projects' do not yet have funding and therefore, the molding company is not only expected to react quickly, but also absorb costs in the start-up phase with no guarantee that the product will be embraced by the OEM."

Overall, the industry has not fully embraced technologies that can streamline production validation, which also speeds time to market, experts noted.

"Over the past 20 years the industry has evolved immensely," noted Smith. "However, there are complex challenges with regulations. Gaining [FDA] 510(k) approvals is becoming a difficult task and is driving companies away from the U.S. market. The industry is troubled with the difficult economic environment and very few venture capitalists are investing in early stage opportunities. It is a tough environment and medical device executives must spend time trying to improve R&D, launch and commercialization processes."

Even with capital investment in the latest technology, speed to market remains hampered by longer FDA approval times. The agency has increased scrutiny of the medical device industry, which directly impacts molding suppliers. OEMs are pressuring vendors to be sure components meet very strict risk-analysis requirements.

"More upfront planning and engagement of the contract manufacturers earlier in the design phase will reduce the chances of unattended product and process failures in the product realization process," said Smith. "Identification of critical design features and failure modes that are supported by in-process investments, and that reduce risk for the OEM, is a crucial piece of the product realization process."

Mark Crawford * Contributing Writer

Mark Crawford is a full-time freelance business and marketing/communications writer based in Madison, Wis. He can be reached at mark.crawford@charter.net.

Information About Plastic

UV-curable coatings for plastics and for wood to be focus of two-part FSCT Virtual Learning Conference.

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At present, plastic products processing industry has become China’s largest industry of light industry, China has become the world’s largest production and consumption of plastic products country. 2012 China’s annual output of more than 1 million tons of plastic products has reached 16 provinces. Guangdong Province, China’s plastics industry is the most important provinces, despite the industry in recent years into the industrial structure, product structure adjustment period, the Guangdong Plastics Industry is still 20 years in a leading position in the country. In 2012 the total output of plastic products 9.19 million tons, accounting for the proportion of 15.9%, total output value close to 400 billion yuan.

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Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Big Bear Lake and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

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Big Bear Lake Plastic Information and Training

Hercules Paint Corp.

ABS plastic is used in many household, plumbing and construction projects. It can take the form of a water pipe or a chair, for instance. If you have ABS material that will be outdoors and exposed to sunlight, it is best to paint the plastic since untreated plastic will be destroyed by the sun's UV rays. Preparing ABS to be painted is easy, and you can use just about any solvent-based paint, but two brands known for their quality paint for ABS materials are Rustoleum and Hercules.

Resources

  • IDES: ABS applications and features
  • Difference between water- and solvent-based paints

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Polymer Sheet Suppliers

Time to learn about: dynamic optimization of extruder barrel temperatures.

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they're made from recycled plastics

Yes, he's heard the career advice line from The Graduate. ("I just want to say one word to you: plastics.")

And yes, he's gotten used to the jokes about his business's name (The Plastic Lumber Co.?).

And no, he doesn't mind them at all.

You see, if you're Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It's not quite as silly as it sounds.

Robbins is president of the Akron company, which takes recycled plastics -- milk jugs are a primary source of raw material -- and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World.

And no doubt there's a desperate need for someone to do something with what the industry calls postconsumer (used) plastics.

With Americans producing 160 million tons of solid waste a year -- that's better than three pounds per person per day -- landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

The problem is that a lot of people have been rubbing on the genie's lamp for a long time. The first reported use of recycled plastics dates back to the 1930s -- a Du Pont chemist with a sense of humor used some postindustrial plastics to make a length of fence -- so the idea is not exactly new.

And Robbins is not exactly without competition. The notepad holders, in-and-out-trays, and trash cans produced by Rubbermaid Inc. are made in large part of recycled plastics. Plus, companies such as Du Pont, Dow, Amoco, Mobil, and Occidental have all begun joint-venture projects aimed at making recycled plastics widely available.

But despite the growing interest, there are two major reasons why the idea of recycled plastics has not caught on -- and Robbins must deal with both.

First, there's no consistent source of raw materials. Recycling is still not mandatory nationally, and even those states or towns with recycling programs don't always require that plastics be left by the curb, believing -- mistakenly -- plastics can't be recycled. (They can. But since traditional recycling methods can't guarantee the purity of recycled resins, recycled plastics are not used in packaging that comes in direct contact with food.)

Cost is the second reason that everything from marina docks to highway dividers is not yet made from recycled plastic. If you use recycled plastics as a substitute for virgin ones, as the carpet industry is doing, you'll save money.

But if you use recycled plastics to replace materials such as wood and concrete, the economics change. Robbins's picnic tables and parking stops cost up to twice as much as those made from traditional materials.

While that's a problem, it's not a insurmountable one, says Robbins, who has worked as everything from a restaurant manager to a stockbroker (see "The Founder," page 4). His sales pitch stresses that since plastic lumber and plastic concrete last longer than their traditional counterparts, they're actually cheaper over the long haul.

Besides, as Robbins points out, the potential market is huge. In 1989, only 250 million pounds of plastics were recycled, yet the demand for materials that plastics could replace was thousands of times greater, according to Robert A. Bennett, associate dean of the college of engineering at the University of Toledo. For example, last year Americans used some 3 billion pounds of treated lumber, and roughly 7.4 billion board feet of wood just to build pallets.

Robbins is not looking to replace all that wood -- just a splinter of it.

And he's convinced his timing is right. Some 20 years after the first Earth Day, taking care of the environment is suddenly fashionable again. Everyone from McDonald's to Dayton Hudson department stores is using seedlings as a sales promotion tool. Time magazine made "Endangered Earth" its planet of the year, and George Bush will tell anyone willing to read his lips that he is "the environmental President."

Even the plastics industry has gotten into the act, creating impressive-sounding task forces (The Council for Solid Waste Solutions) and running commercials during the Sunday morning news shows explaining that it, too, wants a cleaner environment. When you have politicians and Fortune 500 CEOs tripping over themselves to be ecologically correct, it's relatively easy to get people to listen -- for a little while, anyway -- when you tell them you're selling products made out of recycled plastics.

Robbins is making the most of the opportunity. Early on he hired a public-relations firm that has made his company better known than his sales would justify, and the attention is beginning to pay off. "We're getting inquiries from businesses and governmental units we never knew existed."

When he returns those calls and letters, Robbins is quick to stress the advantages his goods offer. Products made from plastic weigh less than concrete (that means fewer injuries and workers' compensation claims), require less maintenance (unlike wood or concrete, they don't need to be repeatedly stained or painted), and are virtually impervious to the weather.

Plus, plastic lumber can be sawed, nailed, drilled, glued, and bolted, just like its wood counterpart.

In 1989, convinced he was onto something, Robbins hired Ken Boersma, who had worked at another plastics company on recycling, to create a proprietary extruding machine, and The Plastic Lumber Co. was born.

* * *

Marketing: Robbins started with a great idea: he'd let his market tell him what his sales, positioning, and pricing strategy should be. Unfortunately, the market is speaking with about as much clarity as was heard from the tower of Babel.

And the message that is getting through is certainly not the one Robbins expected.

Before opening his doors last September, Robbins knew his potential market was huge. For example, anyone with a parking lot might need The Plastic Lumber Co.'s car stops (the rectangular bar that keeps a car from taking up two spaces) and speed bumps. So Robbins tried to narrow the field to places where he'd have the easiest time making the sale.

"I figured we should go after universities and municipalities," says Robbins. "With landfills being close to capacity, government seemed a natural. The universities also seemed a good fit, given the environmental appeal of the product.

"I thought there might be a consumer market as well. I could see selling our picnic tables through hardware stores. And I knew there'd also be a commercial application -- things like pallets -- but I wasn't really going to chase that hard at first."

What happened? Commercial sales now account for virtually all of his revenues.

Why? Because the huge marketing advantage Robbins thought he had -- that he's using only recycled plastics -- produces nothing but yawns when he explains it to schools and government.

Yes, they quickly acknowledge, using recycled components is a good idea. Now, let's talk price.

The moment that happens, Robbins is on the defensive. His parking stops cost about $22.50, or about 50% more before installation, than those made out of concrete. His picnic tables are easily twice the price of their wood counterparts.

But, Robbins argues, those prices are misleading. You must look at the long-term costs of using plastic versus concrete or wood. "Somewhere around 5 to 10 years out, we actually become cheaper, and we get more so every year after that, because there are no maintenance costs."

That may be, but his product is still more expensive initially. Cost savings over a product's lifetime can be a very difficult idea for schools and especially municipalities -- which are used to awarding contracts to the lowest bidder -- to understand.

Robbins's marketing thrust isn't misguided. The biggest company in this tiny field is getting a very large part of its revenues from a municipality. But at $3.5 million in sales, Hammer's Plastic Recycling Corp., in Iowa Falls, Iowa, can afford to have a marketing staff. Hammer's people met continually with city of Chicago park department officials, for instance, to answer their questions, eventually working out a deal for landscape ties for playgrounds and plastic slats for park benches.

But Plastic Lumber Co. is woefully undercapitalized. There's no money for a marketing staff. In fact, there's not much of a staff at all. Robbins and Boersma had a falling out, so the entire company consists of Robbins, his administrative assistant, and the four plant workers who actually turn out his product.

If you're running the plant and front office, and also chasing every sales lead that comes in, you don't have a whole lot of time to spend educating some civil servant about the long-term advantages of plastic lumber. While there are growing signs that states and municipalities may be willing to exempt recycled products from the traditional bidding process, that hasn't happened yet.

Fortunately for Robbins, businesses get the concept right away. Some 80% of The Plastic Lumber Co.'s revenues come from a placement in a building-supply catalog.

But that's not the kind of sales mix Robbins was looking for. For one thing, he's now overly dependent on that one distributor, and for another, selling to businesses just about locks him into commodity status.

When Robbins was punching numbers into his Lotus spreadsheet, trying to forecast potential profit margins, he assumed he would average 20% pretax profits. In part, he'd do that by keeping his costs low -- while Robbins budgeted raw materials cost at 44% of sales, labor was expected to be just 9%. But he also expected he'd fetch a premium price for his products.

First off, he thought he'd get a bit more for shaping that recycled plastic into picnic tables and the like. "After all, every time you punch a hole or screw in a bolt, you're adding value, and people are willing to pay for that," he says. And given the unique nature of his goods, plus the lack of competition in the field -- financing for recycling companies has proven hard to come by -- Robbins figured people would be willing to pay a little extra for something that was environmentally on the side of the angels.

Well, some consumers might. And so might some universities. But businesses tend not to be that altruistic. "Purchasing agents are trained killers" is the way Robbins puts it. So far, pretax margins on the speed bumps and car stops he has sold to commercial accounts -- businesses tend not to buy Robbins's value-added products -- have been lower.

Bothersome as this is, at least Robbins knows there's a market for his paving products. With plastic lumber . . . well, let's quote the business plan: "The plastic lumber market can only be considered in its infancy."

To be honest, no one knows what kind of recycled plastic products -- if any -- the market wants, and that's an important point, because when it comes to recycling, there is plastic and then there is plastic.

Some companies, such as Wellman Inc., headquartered in Shrewsbury, N.J., have chosen to specialize. Wellman deals almost exclusively with polyethylene terephthalate, which is used to make soda bottles. Empty soda bottles are traditionally recycled into things like carpet fibers and the linings of parkas and sleeping bags.

The problem is that the equipment needed both to recycle polyethylene terephthalate and to convert it into usable products is expensive. The Plastic Lumber Co. avoids most of that cost by being less fussy about the plastics it uses. It either buys raw materials or cleaned and sorted scrap, which is then melted down and extruded.

However, since the resulting plastic is a blend -- a catsup bottle, for example, which might be part of the company's raw materials mix, is made up of five to seven different plastics -- it's impossible to predict the quality or strength of the resulting products.

That's why the company focuses on making simple products in which the specific properties of the plastic are not important.

Robbins started by selling mailbox posts and picnic tables because they are relatively easy to make. "We're not all that skilled as craftsmen," he says with a shrug. He'll be more than happy to add to the line -- within the limits of his plastic's quality, of course; making a plastic four-by-four to support a swing set would be out of the question, for example, because its strength would not be up to code. But first he needs the market to tell him what it wants.

Ironically, Robbins is finding himself with more time to listen than he expected. His products turned out to be very difficult to sell during cold weather. Nobody is going to go and put a speed bump on the ground when it is 20 below zero, and very few people go looking for picnic tables when they have to shovel their way out the front door. "I didn't realize the extent to which we would be affected by the weather," he says. "Next winter we will concentrate our marketing efforts on the southern part of the country, and on building inventory."

That assumes that (1) he'll have a better handle by then on who his customers are and what they need and (2) his money will hold out.

* * *

Capital: If Plastic Lumber doesn't make it, it won't be because Robbins overspent on decorating.

As you walk into Robbins's fifth-floor offices in downtown Akron, you have to hurdle the tires strewn about and duck under stunning pictures of elaborate food displays. Robbins sublets from his brother-in-law, a commercial photographer who does a lot of work for area food and tire companies. Says Robbins: "By sharing space with him, I didn't have to worry about going out and buying fax machines and copiers."

The same sense of frugality exists throughout the company. Robbins drives a 1982 Oldsmobile diesel that had been in mothballs. He pays $2 per square foot -- about half the going rate -- for his production facility in an old tire plant that Ohio is trying to turn over to small businesses. And by marrying interest from a CD to a term loan in a linked-deposit program, Robbins has borrowed $154,000 at about prime.

But the money is going quickly, thanks to a combination of lower-than-budgeted sales and cost increases primarily caused by problems with the extruder. "We've had to rebuild the chilling system and the molds a few times," says Robbins. "What has happened, given the cost overruns, is that we've gotten one machine for the price of two."

The upshot: the company lost $55,000 during its first three months. And when sales failed to come close to forecasts this past January and February, Robbins reduced salaries and eliminated his public-relations program and most of his advertising. The Plastic Lumber Co. is still losing money.

With Robbins having contributed about his entire savings, and the banks reluctant to loan any more, what is needed -- and soon -- are additional equity investors. (When the company was formed, Robbins sold stock and options totaling 24% of it to a friend for $50,000.) "We've been putting off looking for outside funding," says Robbins. "The better shape we can get the company in before offering stock, the higher the valuation will be. But we are now starting to hold serious meetings with venture capitalists."

The question is, of course, whether the money will come in time -- and in sufficient amounts. Even if it does, there are other problems. Is it reasonable to expect university administrators and civil servants to be farsighted? Will they pay higher prices today for savings tomorrow?

And what about Robbins's embryonic marketing program? There's little doubt that someday there will be a huge market for products made from recycled plastics, but which products?

And even if Robbins does figure out which products the market wants, can he muster the technical expertise to make them? Good questions all, says Robbins, who remains sanguine nonetheless. "We'll be OK."

We'll see.

-- Research assistance was provided by Leslie Brokaw.


EXECUTIVE SUMMARY

The Company:

The Plastic Lumber Co., Akron

Concept: Recycle plastics into products such as picnic tables, mailbox posts, and speed bumps

Projections: Profits of about $6,000 in 1990, almost $500,000 in 1991; pretax profits of 40% and 44%

Hurdles: Defining market; convincing customers that paying more now for products made with recycled materials will save them money in the long run; overcoming lack of technical expertise


THE FOUNDER

"I've been preparing for this my whole life," says Alan E. Robbins, referring to the company he started last year. Given that he's constantly discussing and/or handling such materials as polypropylene and high-density polyethylene, you'd think he was talking about years of toil in the chemistry lab. He's not.

Robbins, a former industrial-technology major who "finished in the upper 98% of my class; thank heaven for that other 2%" at Miami University in Oxford, Ohio, is talking about how the past 20 years have equipped him to run his own business.

He began work in Oxford running restaurants (good for learning how to manage people) and went on to run a mom-and-pop supermarket (people skills again, inventory control, marketing). From there Robbins worked as a headhunter (telemarketing, selling) and eventually a stockbroker ("great financial training"). Before starting The Plastic Lumber Co., Robbins was director of merchant sales for Rondy & Co., an Ohio-based reprocessor of scrap rubber and plastic.

"Everything I've ever done has led me to running The Plastic Lumber Co.," says Robbins, who is putting his money where his mouth is. In budgeting his salary for the start-up, he took about a 50% pay cut -- to $55,000 a year. Since November, given the company's slower-than-expected start, he's been working for free.


FINANCIALS

Plastic Lumber Co. Operating Statement

1990 1991

Sales $495,000 $2,075,000

Cost of Sales

Raw materials 222,000 913,000

Direct labor 44,500 186,750

Rent 21,132 23,000

Electricity 11,535 48,349

Total Cost of Sales 299,167 1,171,099

Gross Profit 195,833 903,901

Gross profit % 40% 44%

Expenses 1990 1991

Production 53,120 150,568

Marketing 42,000 72,000

General & administrative 55,000 114,684

Finance costs 15,000 14,737

Depreciation 10,529 41,736

Other 13,400 24,000

Total Expenses 189,049 417,725

Net Income 6,784 486,176

(continued)


WHAT THE EXPERTS SAY

FINANCIER

NANCY PFUND

General partner, Hambrecht & Quist, a San Francisco venture capital firm; co-manager of its $17-million Environmental Technology Fund, which has a position in a recycling company

I think Robbins was correct in perceiving there's a tremendous market opportunity here. The concept of the business, broadly defined, is sound; there will be exponential growth in the waste minimization segment of the market.

But I think Robbins has made things difficult for himself by focusing on the lower end of the business. By taking mixed plastics and making something that can't be used for much because of the tensile strength, he's artificially narrowed his business opportunities to the commmodity level. Recycled products with the characteristics of virgin materials -- that's where money will be made. If I were Robbins I would upgrade the technology and therefore the end product.

How do you do that? He needs to get some help where he doesn't have the background or the inclination. He's got marketing contacts and distribution experience; he should weave that into some kind of relationship with a plastics recycler with a little more know-how. He does have a little business there that could feed into the activities of another firm. There are all kinds of options: a co-marketing arrangement, or a subcontractor or OEM relationship. He's certainly got a lot of energy and enthusiasm, which could be put to better use.

One of the common mistakes is to think people are going to buy products just because they're environmentally correct. You can't rely on that kind of altruism. It certainly can help. But people are very dollars-and-cents oriented. Recycled plastics products do not have to be more expensive than what they're replacing, and in the long run they can't be. In the long run they have to be cheaper.

If Robbins is lucky, maybe he can bring in the top line, but I think his costs are going to increase. The company is very thin, and he can't run a business effectively and wear all the hats at the same time. But he does have the option of finding someone who will work with him. He's developed a market and has some customers, which is an asset that should be valuable to someone.

OBSERVER

THOMAS J. PENRICE

Director, Plastic Consulting for Strategic Analysis Inc., a Reading, Pa., firm

I'm very bullish on Robbins's idea and his chances for success. I think his sales forecast is actually quite modest. And there may even come a time when his raw materials cost -- which is relatively high now -- could be negative. As communities collect all this plastic, they're going to need somebody to take it off their hands.

However, there is a major problem. He has seriously underestimated his marketing costs. If he uses the $72,000 he has budgeted (on $2 million of projected sales) to hire a marketing person -- and he'll pay at least that to get someone qualified -- there won't be any budget for mailings and travel. You have to go to the trade shows and network.

Eventually there'll be many viable consumer and industrial applications for recycled plastic products. However, Robbins's company must first survive the next several months. Instead of letting his customers dictate his marketing approach, I would begin by working directly with major producers of plastic resins -- the Dows and Du Ponts -- and work out a deal where they would give him the plastics they can't use in their recycling programs, the co-mingled plastics, and see if they would be willing to buy the picnic tables and the like from him. These companies all have active recycling programs and are eager to promote recycling. Once the applications are demonstrated to be practical and cost effective, however, Robbins has got to reach a broader market.

COMPETITOR

BRIAN HARPER

Technical director, Hammer's Plastic Recycling Corp., Iowa Falls, Iowa, The Plastic Lumber Co.'s largest competitor

They're going to be struggling to stay alive unless they do something clever, and there doesn't seem to be anything clever on the horizon.

First, the company is grossly undercapitalized. And it's not spending the little money it does have on the right things. It's marketing that drives companies that make plastic lumber, yet Robbins has scaled back his marketing efforts to save money. He needs large orders to survive, and without a marketing budget, he's going to be hard pressed to get them.

Even with a marketing budget, he would seem to be in trouble because he doesn't have a marketing strategy. He's going with the flow, and that's a big mistake. There is no inherent market for plastic lumber; you have to create one. I think Robbins believes -- as a lot of companies that are no longer in business once believed -- that his product is so good that people will fight to buy it. That's wrong. It's always been wrong.

But in addition to overestimating sales and underestimating marketing expenses, he has another problem. There is no depth of technology. Ken Boersma has left. Who's going to replace him?

If I were running their company, I'd go out and recruit a good marketing man and a good technology person, but I don't see how Robbins will be able to attract the money he'd need to do it. When potential investors visit the company's offices and see the lack of staff, they're going to conclude the company is close to broke. The venture capitalists won't trust the company with their money, and customers won't trust it with their orders.

Plastic Lumber is where we were four years ago, but we had marketing and we had technology people who allowed us to create new products. They have neither.

CUSTOMER

GLENN TROWBRIDGE

President, National Association of County Park & Recreation Officials; Park & Recreation Director for Clark County (Las Vegas), Nev.

New products have to do something above and beyond what old ones do. There are a hundred manufacturers of picnic tables and speed bumps out there already. If Plastic Lumber came out with, say, a vandal-proof bench you could wipe spray paint off of, now we're dealing with something. But customers already have long-term relationships with manufacturers, and they're not going to set them aside just because somebody says, "Hey, I've got a newer product." I'm approached at least once a month by picnic-table manufacturers; it's an incredibly competitive field.

Robbins will have to prove his claim of extended life expectancy -- he can't just come out and say it costs more but is going to last twice as long. The documentation seems absent at this point.

If the company isn't competing on price it's going to have to convince customers to raise the standards of what they spec -- for instance, to require that benches last six years -- and then the company will have to prove that its product meets those standards. Convincing buyers and architects to stop specifying one product and specify something more stringent, on the basis that it's better for them, is an uphill battle. But that's how the game works.

Big Bear Lake

UV-curable coatings for plastics and for wood to be focus of two-part FSCT Virtual Learning Conference.


San Bernardino Plastic Delrin

Running Springs Plastic Thermoforming

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Running Springs and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Types Of Plastics

Running Springs Plastic Information and Training

You reach out to pick up an apple. You can do it, thanks to brain-based robotics. But since you have a prosthetic hand, you can't feel it. You can't feel it when you hug someone, either. (That's arguably even worse.)

That's the reality for many of the millions of amputees fortunate enough to have access to artificial limbs (many more millions worldwide don't). But Zhenan Bao is out to change all that. The Stanford chemical engineer is working with a team of researchers to develop a new "skin" that could stand in for the real thing and give amputees back sensation. Previously, researchers have been able to offer some sense of touch, but not with flexibility at the same time. Bao's skin, by comparison, would allow amputees to feel even with bendable prosthetics.

The science of how you feel

To get a sense of just how incredible Bao's feat is, consider how your regular sense of touch works: Inside your skin are millions of nerve receptors. These receptors gather information about force, pain, and temperature. The receptors then send electrical impulses to your neurons (nerve cells). The impulses pass rapidly from neuron to neuron, to the spinal cord, and finally to your brain. The brain then has the job of translating the incoming signals. To work properly, Bao's skin had to replicate that entire sequence, all with an adaptable, flexible material that still would be durable enough to avoid interruption of the process.

Bao's solution

Bao came up with a two-layer design of ultra-thin plastic, with the first layer standing in for your nerve receptors and the second layer containing circuits that get the electrical signals to your brain. To get there:

  • The researchers investigated and described how to use plastics and rubbers as pressure sensors, measuring how much natural rebound or spring the molecular structures in those materials provide.
  • Bao and her team indented a waffle pattern into the top layer of thin plastic to compress the "springs" in the material even more, thereby increasing pressure sensitivity.
  • The team inserted carbon nanotubes through the waffled plastic. When you increase pressure on the plastic, the nanotubes are brought closer together. Subsequently, they conduct electricity to sensors better. When you decrease pressure on the plastic, the nanotubes move further apart, and electricity doesn't travel to the sensors as easily.
  • Bao connected the first layer of the "skin" to the second circuit layer.
  • The researchers adapted an optogenetics technique developed by Karl Deisseroth. The technique allows scientists to bioengineer cells to turn "on" and "off" in response to specific light frequencies. Bao was able to translate the electronic signals from the "skin" into light, which then theoretically would activate neurons that would carry the messages to the brain.

One sensing mechanism down, five to go

Bao stresses that the skin is still only in the proof of concept phase, and that much more work is required to get the full touch capability most people naturally have. She still has to develop and incorporate systems that will mimic the remaining five types of biological sensing mechanisms regular skin holds. But already, the basic, two-layer foundation Bao has makes such additions theoretically feasible, and her team is partnering with PARC (of Xerox) to adapt inkjet printing technology that would make the skin practical over a large area. Not only that, but Bao's plastic fabric also should be able to "heal" and power itself. It might take time, but molecule by molecule, it's coming.

Recycled Plastic Sheet Material

Do-It-Yourself: Plastic Molding

mdmoon/iStock/Getty Images

ASTM International, previously known as the American Society for Testing and Materials, is a leading global authority on the development of safety standards for consumer products. Their "D-4236" designation is meant to alert consumers of any chronic health hazards that may result from using art-related supplies. In 1990, the Labeling of Hazardous Art Materials Act, or LHAMA, made it a federal requirement for all such supplies to feature the D-4236 designation on their labels.

Resources

  • Fine Art Tips With Lori McNee: Understanding the Health Standards of Your Art Materials

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San Bernardino Plastic Delrin

Chino FDA Approved Plastics

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Chino and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Plastic Market

Chino Plastic Information and Training

FSCT has announced that its groundbreaking e-learning programs--the Virtual Learning Conferences--will begin in 2005 with a two-part program on UV-Curable Coatings. On March 17, Aaron Lockhart, of Bayer MaterialScience, LLC will present "UV-Curable Coatings I: Coatings for Plastics." The second session, "UV-Curable Coatings II: Coatings for Wood," will be offered on March 31 by Ron Schowengerdt, of PPG Industries.

These courses may be taken individually or as a series. Register by March 10 to receive discounts on the registration rates.

UV-Curable Coatings I: Coatings for Plastics

Thursday, March 17

2:00-3:30 pm (ET)

This session addresses UV-curable coatings chemistry and its potential suitability in end uses where a coating for plastic is needed or desired. Traditionally, elasticity, adhesion, and expense have limited the utilization of UV-curing technology in plastic coatings. However, with the employment of urethane chemistry in UV-curable coatings, these and other concerns are dissolved. Examples of both functional and aesthetic coatings are presented relative to mono- and dual-curing, waterborne and solventborne UV-curable coatings.

Learning Objectives

* Provide a general market status of UV-curable coatings

* Establish an understanding of the UV-curing mechanism

* Address difficulties in coating plastic substrates

* Demonstrate the suitability of UV-curable coatings for both decorative and protective functions over plastics.


Course Instructor

Aaron Lockhart is an associate scientist with Bayer MaterialScience, LLC, in Pittsburgh, PA. Mr. Lockhart received his B.S. Degree in Chemistry from The University of Virginia. As a member of the Business Development-Coatings, Adhesives, and Sealants group, he is responsible for testing and development of one- and two-component waterborne, solventborne, and UV-curable polyurethane raw materials for coatings for plastics. Mr. Lockhart began his professional career with Bayer in 2000.

Who Should Attend

This session is designed for applications development personnel, those responsible for new product design, technology managers, coatings manufacturers, and end-users that develop finished goods that require coatings for plastics.

UV-Curable Coatings II: Coatings for Wood

Thursday, March 31

2:00-3:30 pm (ET)

This course addresses UV-cure wood finishes, beginning with a discussion of the Total System Approach and how it is important in identifying coating needs and outcomes. The basic building blocks of UV-curable coatings are also addressed. In addition, the three types of sprayable UV finishes (solvent-based, water-based and high-solids) and the three types of sprayable stains (solvent-based, 100% solids UV and water-based) are covered. A presentation of application and curing equipment along with the typical line layout to prefinish architectural moldings completes this session.

Learning Objectives

* Learn about sprayable UV finishes for wood

* Learn about equipment used in applying coatings to a wood substrate

* Gain an understanding of the selection process for combining the appropriate equipment and coatings for production

Course Instructor

Ron Schowengerdt is a senior chemist at PPG Industries, Oak Creek, WI. He has done extensive work on spray, vacuum, and wood coating applications. Very knowledgeable about UV-curable coatings for wood, Mr. Schowengerdt is heavily involved in the furniture and kitchen cabinet industries.

Who Should Attend

The course is designed for applications development personnel, those responsible for new product design, technology managers, coatings manufacturers, and end-users that develop finished goods that require coatings for wood.

Registration

Early Bird Fees: Register by March 10 for either course to receive the discounted rate, per course, of: FSCT member--$349; Nonmember--$399.

Regular Fees: After March 10, the registration fees are: FSCT member--$399; Nonmember--$449.

Only one fee is charged per location, regardless of how many participate.

To register, visit www.coatingstech.org/Programs/Shows/Schedule.cfm; or call: 800.651.7916 from 6:00 am to 6:00 pm Mountain Standard Time.

For information, contact FSCT, 492 Norristown Rd., Blue Bell, PA 19422-2350; 610.940.0777; fax: 610.940.0292; email:fsct@coatingstech.org.

Polycarbonate Plastic Material Properties

The Slow, Sad, and Ultimately Predictable Decline of 3-D Printing

Even if that marker ink is designed to be permanent, it doesn't have to be. Words doodled on a container lid or scribble marks on a plastic tumbler used to hold markers are equally removable using basic items you likely already have around the house, such as citrus cleaners, rubbing alcohol or a dry-erase marker. Test the cleaning solutions in an inconspicuous area first to make sure they don't discolor the plastic.

(Ray Robert Green/Demand Media)

Resources

  • One Good Thing by Jillee: The Many Uses of Magic Erasers

Chino

Plastics!, Marketing Methods Article


San Bernardino Plastic Delrin

San Bernardino Plastic Delrin

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the San Bernardino and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Plastic

San Bernardino Plastic Information and Training

In 1904, electrical experts from around the world gathered in St. Louis. Noting that different countries had different names and units for electrical gear, they came up with the idea of creating an international industry standard so that machines made in one country could run on another country's power source. A century later, a Geneva-based group called the International Organization for Standardization, or ISO, continues that work; over the years, it has established more than 15,000 standards for everything from screw threads and the dimensions of freight containers to the JPEG digital-photo format.

More recently, ISO has been moving into a new area: setting standards for nearly every aspect of a business's operations. At last count, in 2003, more than 600,000 companies worldwide had been certified to ISO's management standards. Moreover, many of the world's largest enterprises, such as Ford, Northrop Grumman, and some branches of the federal government, demand that many of their suppliers be certified.

And therein lies a problem for entrepreneurs. Getting an ISO certification is expensive and time-consuming. What's more, doing so requires codifying nearly every aspect of business operations -- something that runs counter to the style of a fast-moving entrepreneurial organization. But if you don't go through the process, you often can't work for the big guys. "The larger customers always have it in their RFPs -- are you ISO certified?" says Eric Vetrano, senior VP of operations at Redemtech, a tech outsourcer in Columbus, Ohio. "We got shut out a few times since we didn't have a certification." Redemtech has since remedied that, obtaining its ISO 14001 certification earlier this year.

ISO began setting management standards in 1987, beginning with a framework of rules known as ISO 9000, which governed the production-line operations of major manufacturers. In 2000, the organization broadened the rules to apply to service companies as well, covering everything from hiring to market research. In 1996, it introduced a set of environmental policies known as ISO 14000, and the organization is currently considering new standards for safety, corporate social responsibility, and financial planning. To qualify for either 9000 or 14000 certification, a company must write a specific, step-by-step guide for each process, and then demonstrate that it follows the procedure. Such management rules, says Alan Bryden, ISO's secretary-general, are "distillations of good management practice worldwide for the way an organization accomplishes its work."

But can something as ephemeral as good management be distilled, analyzed, and measured like a manufacturing process? Peter Kolesar, a quality expert at Columbia Business School's Deming Center, isn't so sure. "When you try to make a simple parallel between blowing plastic bottles for detergent and running one-of-a-kind advertising campaigns, the ideas don't carry over in this nice, mechanistic way," Kolesar says.

Certification also requires a lot of time and money, which can be especially hard on entrepreneurial companies. John Huey learned just how involved the process was when he directed the ISO certification for the division of Delaware North Companies that manages guest services in tourist spots like Yosemite and Sequoia national parks. First, Huey drafted an environmental-management policy. Then, he documented the company's environmental impact, tracking water use, energy use, and food recycling. Next, he devised a plan to reduce waste, researched legal requirements for pollution and contracts, trained employees, brought in a consultant to prepare for the compliance audit, and conducted his own preliminary audit.

And still, there was more work to be done. Huey shipped 300 pages of documents to a third-party auditor for a "desk audit" (ISO doesn't certify companies itself -- 750 or so independent firms handle that) and flew the auditor to each of the five sites he was certifying. The auditor spent a day or so in each spot, interviewing employees, reviewing Delaware North's adherence to ISO, and noting any infractions. Two months later, Huey had to fly the auditor in again to confirm that the infractions had been corrected, re-interview staffers, and re-review documents. Finally, in summer 2001, 18 months and about $115,000 after the process began, the sites were certified.

The problem is, it can help drive a company to a plateau level of performance, but it will keep it at that level and, in fact, stifle improvement.

The payoff? That's a tough one. The certification probably helped Delaware North win some contracts and certainly burnished its environmental standards. Employee morale also rose, as workers took pride in their newfound status as a certified environmentally friendly operation. But as for concrete financial rewards, there has been no spike in sales, Huey says. Shiv Krishnan, CEO of Indus Corp., an IT outsourcer based in Vienna, Va., made an even bigger commitment to ISO: He spent $1 million to get his $75 million company into shape in 2003. He saw direct results, however-he landed a lucrative federal contract.

Whose experience is more typical? Three years ago, ISO's own journal, ISO Management Systems, published a study that tracked the effects of ISO 9000 certification on public companies over a 10-year period. The authors concluded that firms that were certified tended to do better than firms that were not. But they also wrote that certification "is more often a necessary condition to maintain current [financial] performance rather than a sure-fire way to improve performance." A 2002 study by the journal Total Quality Management was more pointed, finding that "ISO 9000 certification has a very limited impact on financial performance, as measured by return on assets; however, this effect dissipates quickly over time."

Nor does certification necessarily lead to a boost in quality. "There's a belief that ISO will bring a company to a standard level of performance, like a UL sticker on an electrical appliance," says Bill Robinson, who oversaw more than 50 ISO registrations at Lucent Technologies. "The problem is, it can help drive a company to a plateau level of performance, but it will keep it at that level and, in fact, stifle improvement."

Now Robinson oversees quality at EasyLink Services, a Piscataway, N.J., electronic-document company. And rather than going after ISO certifications, he prefers to work with Six Sigma, the quality system popularized by Jack Welch at General Electric. Arunas Chesonis, CEO of telecom company Paetec Communications, based in Rochester, N.Y., is also de-emphasizing ISO in favor of Six Sigma, in part because GE is both an investor and a customer. He began instituting ISO soon after starting Paetec in 1998. The standards, he says, were "a pretty powerful training tool" for new employees and signaled to potential customers "that we were the type of company that was focused on quality and process improvement." But now that his company is approaching $500 million in sales, Chesonis wants to layer Six Sigma on top of ISO. "ISO is really not one of the better systems for process improvement," he says.

Which begs the question: If an organization doesn't set the standard in its own field, why should it be able to dictate standards in yours?

Staff writer Stephanie Clifford can be reached at sclifford@inc.com.

Abs Plastic Products

How to Paint ABS Plastic

Introduction

China XD Plastics (NASDAQ:CXDC) is a Chinese manufacturer of plastics for auto parts found in the likes of Audi (OTCPK:AUDVF), Toyota (NYSE:TM) and Volkswagen (OTCPK:VLKAY) (OTCPK:VLKAF) in China, as well as local Chinese auto brands. With $1 billion in revenues and $2 billion expected for 2017, CXDC continues to benefit from increasing auto penetration rates in China, substitution of more expensive imported products and Chinese car exports. This report will argue that CXDC deserves to trade like a mid-cap stock at market multiples based on backers like Morgan Stanley (25% of the company), bondholders such as Fidelity Investments and its competitive edge. Car manufactures in China grant product certifications and integrate with the most reputable and biggest suppliers. CXDC is China's number one in production capacity and certifications.

CXDC Operations & Barriers to Entry

I have to thank the CFO of CXDC, Taylor Zhang, who was forthcoming on the phone and generous with his time for the following explanation of why CXDC is not simply a peddler of plastic pellets.

For one, the operations of CXDC are highly integrated with that of its customers, which include distributors, auto part manufactures (AP) and original equipment manufacturers (OEM). A typical sale involves an OEM (Audi for example) sending CXDC the technical requirements of auto parts to be manufactured by the AP. These requirements will include a long list of plastic specifications such as impact and heat resistance, which varies considerably between bumpers and dashboards, for example. CXDC will then contact and provide the AP with the plastic specifications and work the initial R&D trials with the AP to make sure it meets the OEM's requirements. In the later stages, CXDC handles the rest of the R&D process, and once finished, sells the pellets to the AP through a distributor, which handles inventory and overall logistics for the AP. CXDC will only recognize revenue when the AP has received a batch from the distributor, not when CXDC ships to the distributor, minimizing the risk of stuffing the channel. The following chart describes the time consuming (1.5 to 2 years) process involved in earning a product certification from the OEM and before delivery of the product. As shown, order fulfillment implies a close relationship and constant contact between CXDC, the OEM, AP and distributor and forges business ties that are not conducive to simply shopping around for the cheapest product.

Market Share & Barriers to Entry

In 2013, Japanese car makers Toyota, Honda (NYSE:HMC), Nissan (OTCPK:NSANY) (OTCPK:NSANF) and Mazda (OTCPK:MZDAY) had to recall more than 3 million vehicles worldwide to replace defective air bag inflators susceptible to catching fire. By May 2015, this has grown to become the biggest automotive recall in U.S. history. The plastic air bag inflators were made by Japanese auto parts supplier Takata Corp. (OTCPK:TKTDY).

Unlike modified plastics for electronics and appliances where price is the determinant factor, technical performance is the driving factor in the automotive industry. Size matters and reputable car brands seek the most established firms and vote by granting product certifications. CXDC is believed to have the most certifications in China. The company is certified and utilized by 8 of the top 10 auto OEMs in China and supplies to 25 brands and 80+ vehicle models. CXDC is also China's #1 producer of auto modified plastics by production capacity and #2 by sales volume, with a 36% market share in the Northeast, China's main auto manufacturing region.

According to Frost & Sullivan, multinational corporations, which for the most part import high cost products relative to Chinese products, are expected to continue losing market share from 57% in 2008 to 26% by 2017. During the same period, large established domestic producers like CXDC with a long history of expertise in product certifications and local production are expected to increase market share from 43% to 74% in a growing market.

Conservative Leverage & Growing Market

CXDC has grown GAAP revenues by more than 50% and earnings by close to 100% annually since listing on the NASDAQ in 2009. Growth has been driven by increasing market share at the expense of dwindling imports (see graph above), as well as growing auto penetration rates which have increased from 4% in 2008 to 8% in 2012 and are expected to reach 15% by 2017. This will still be well below 78% in the U.S. and 52% in Europe. Hold on to this thought when the U.S. media reports Chinese cyclical auto slowdowns. Unless the Chinese revert to riding bicycles, secular growth is a fair assumption. Plastic use per vehicle in China is also expected to increase to 152 kg per car by this year from 67 kg in 2005, but will still be below levels in Europe (250 kg) and the U.S. (200 kg). Use of plastic in cars is in fact expected to increase worldwide in order to reduce car weight, which lowers CO2 emissions. Electric cars, also good for the environment, are a godsend. That's not me going granola. Electric vehicles use 15% more plastic than traditional vehicles to compensate for the added weight of the battery. While the company is dabbling in the 3-D, bio-plastic, aircraft and high-speed rail market, focus will remain on the growing auto sector. China became the biggest car market in the world in 2009, surpassing the U.S. in both manufacturing and consumption. With more than 300 million motorists, China has about the same number of licensed drivers as there are people in the U.S. Exports will follow. As stated by Chrysler's (NYSE:FCAU) CEO, "future plans for the export market are significant" and the risks to U.S. and European firms are "enormous".

For 2015, the company expects similar revenue and profit numbers as in 2014, having reached full capacity since 2013. Capital expenditures underway, however, will add 80% of additional capacity by 2017 as well as higher margin products, says the company. CXDC has overshot sales guidance every year since 2009. If the economics hold, CXDC could earn more than $220 million in net income in 2017 on revenue of $2 billion (see table below). With $330 in cash from a bond offering last year and adequate leverage ratios on a fully converted basis, the company should have no problem meeting planned investments.

Then Why Does CXDC Trade for 3.4x 2015 & 1.8x 2017 Earnings?

At $409 million for the whole company under a fully converted basis ($304 million market cap counting only shares outstanding) or $6.20 per share, CXDC trades for 3.4x 2015 net income. If the economics hold, the company trades for 1.8x 2017 net income.

What could possibly explain such an absurd valuation? It all goes back to the 2010 fiasco surrounding shady Chinese reverse merger listings such as China Orient Paper. A reverse merger is a common practice that involves a private company bypassing the expense and scrutiny of an IPO by merging with a smaller company already listed. Judging from the 60% drop in the Bloomberg Chinese Reverse Merger Index ((CHINARTO)) since 2010, average investors are convinced that all Chinese reverse mergers are listed to defraud.

The Case for Chinese Reverse Mergers

Since the much published demise of China Orient Paper, however, much has come to light to disprove the bias against Chinese reverse mergers. Most prominently among the studies is perhaps the one published in November of 2013 by Stanford Graduate School of business. The report, which compares Chinese and American reverse mergers, concluded the following: (1) The majority of American firms were small and never managed to migrate to NASDAQ (where CXDC trades); (2) Chinese firms chose the U.S. not only for the reputation conferred by a U.S. listing or for savings over an IPO that could cost 12% of capital but also because the Chinese market was corrupt. Many local governments demanded a share of the company in exchange for authorizing a listing; (3) Chinese reverse mergers were better capitalized and have had better operating results than American reverse mergers. In conclusion, it would be ironic if CXDC ended up actually deserving a better valuation than its American counterparts. The fact is reverse mergers make sense and not all list to defraud. Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B), after all, was a reverse merger in the 60s.

Anonymous Analysts Make a Mock of Market Prices

Chinese reverse mergers have sprung not a cottage but a wide spread industry in Asian markets, with anonymous bloggers riding on the coattails of legitimate short sellers like Muddy Waters Research which uncovered China Orient Paper. The practice, to quote from Bloomberg, goes something like this: "An anonymous researcher releases a report questioning the accounts of a publicly traded company. Investors catch wind of it and sell. The targeted firm denies the allegations, but by then the share-price damage is already done." Often times, as is the case with CXDC, these anonymous research reports have arithmetic errors and can only be traced back to Gmail addresses. This practice has added relevance to CXDC because it led to bot-filled Yahoo Finance headlines in the style of "have you been injured in a car accident?", that in the case of CXDC read "SHAREHOLDER ALERT: Levi & Korsinsky, LLP Reminds Investors of Class Action Against China XD Plastics Company Ltd. and Its Board of Directors and a Lead Plaintiff Deadline of September 15, 2014". I counted over ten bot-listed law firms advertising for business this way. All claims rest exclusively on the one research piece written by the anonymous short seller.

After CXDC sought counsel for defamation, the short seller was contacted by Shearman & Sterling LLP and the 2,300 word report was trimmed down to 1,500 words. What remains is a watered down accusation that CXDC does not invest enough in R&D and has suspiciously high margins compared to Kingfa, another Chinese company in the same sector. Going through Kingfa's financials from 2010 to 2013, however, reveals both differences can be accounted for by the fact that Kingfa is in a different market segment and trades raw materials (20% of revenue), which is a notoriously low margin (4%) high volume business. A closer comparison would have been Shanghai Pret Composites, China's third biggest local supplier of modified plastics for automotive applications. When compared to this company, CXDC's 5% gross margin difference can be accounted for by various reasons, including the fact that Shanghai Pret Composites also supplies to the communications and electrical industry while CXDC is focused on the auto sector.

Smart Money Backs CXDC

CXDC bulls include Scott Black, president of Delphi Management, a leading money management firm he founded in 1980 that counts Michael Bloomberg among its clients. As he had for the past twelve years, Scott Black found the time to participate in Barron's 2011 yearly roundtable alongside 10 other regular panelists, including peers Mario Gabelli, Bill Gross, Abby Joseph Cohen and Marc Faber. During the roundtable, the gurus compete and pitch their best investment ideas for the coming year, putting their firm's reputation on the line. Barron's then tallies the results and ranks them for accountability the following year. In 2011, Scott Black presented CXDC among his top picks a year after China Orient Paper.

Seven months after Scott Black's recommendation Morgan Stanley would invest $100 million in the company through the third Morgan Stanley Private Equity Asia fund (MSPEA III) at a $400 million valuation. Three years later, CEO of MSPEA Chin Chou, commenting on the success in raising $1.7 billion (target was $1.5 billion) for the fourth and final MSPEA fund, would attribute this to the track record and strong performance of the first three funds. According to Chou, these funds benefited from what he called "the most attractive entry prices we have seen in the last 10 years". The Reuters article states a source with knowledge of the firm putting the net returns for the first three MSPEA funds above 20% per year.

Keep in mind the scrutiny that a company undergoes before a Morgan Stanley private equity fund is ready to part with $100 million. Now add two Morgan Stanley board seats, KPMG as auditor and the first Chinese industrial company to issue bonds that trade in the U.S. Among the buyers of the bonds issued in 2014 were Fidelity Investments, Morgan Stanley, UBS and other banks.

I tried to find institutional bears on the company but could not find any.

Shareholders

CXDC is controlled by its founder, Chairman and CEO Jie Han who owns about 50% of the company. Morgan Stanley follows with 25% in preferred D convertible shares through MSPEA III (all figures are under a fully converted basis). As I write this, MSPEA fund III is probably drawing plans for a tender offer of CXDC only to relist it in Hong Kong or China at market multiples in two to three years and continue raking up 20% yearly returns as with previous investments. The remaining 25% is the float and is held mostly by institutional investors, including Renaissance Technologies, CALPERS and Invesco. The top ten institutional investors hold about 50% of the float, according to the latest 13-Fs. These investors are unlikely to go along with a low ball tender offer for fiduciary reasons. But the opportunity is there and an offer at a 50% premium over the current market price of around $6 would be a low risk, high reward proposition for any buyer and represent $9 per share. Shares traded for $13 at one point last year before the dubious class action lawsuit.

Upside Between 200% and 600% from Current Prices

If CXDC had chosen to list in China instead of in the U.S. through a reverse merger, it would be valued at 20x 2014 earnings. This is the Shanghai Stock Exchange multiple as of May 18 and represents a $2.4 billion valuation for CXDC or 6 times the current price. If CXDC was a Russell 2000 company, it would be worth 23x 2014 earnings or $2.8 billion. This is 7 times the current valuation despite arguably better growth prospects in China than in the U.S.

The numbers in the table above do not account for near double of the earnings in 2017 if the economics hold.

Conclusion: CXDC Deserves Market Multiples

I have tried to abstain from bringing up any Buffett maxims but will succumb in the finish line (only if he wasn't so damn right all the time). You have heard about the punch card with twenty lifetime investment ideas. CXDC deserves a punch. Chinese reverse mergers have proved to be better stewards of capital than American reverse mergers. Most of the fraudulent claims by an anonymous short seller have been taken back and what remains has been disproved. And yet because of inertia CXDC continues to trade at $6.20 per share, which implies a ridiculous PE of 3.4x (1.8x 2018 expected earnings). What you are left with is a Morgan Stanley-backed (25%) leading Chinese company that has grown GAAP revenues by more than 50% and earnings by close to 100% annually since listing on the NASDAQ in 2009. The company could double earnings again in 2017 after the new plants come online. Despite impressive numbers, there is plenty of growth left with only 15% of Chinese expected to own a car by 2017. Exports will also follow. Not all manufacturers of modified plastics will benefit. Local market leaders like CXDC with the scope to integrate operations with auto parts manufacturers, distributors and OEMs will continue to thrive at the expense of smaller local players and imports. At around $6.20 per share, CXDC is absurdly valued. I would not sell at $12.

Disclosure: The author is long CXDC.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

San Bernardino

GM Will Win With Mechanical Engineering, Not Financial Engineering (Video) - General Motors Company (NYSE:GM)


San Bernardino Plastic Delrin

Chino Hills Medical Plastic

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Chino Hills and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Types Of Plastics

Chino Hills Plastic Information and Training

Panera Bread (NASDAQ:PNRA) is one of the fastest-growing and most successful casual food chains in operation to date. I was a former Panera addict, hooked on soup in a bread bowl and panini sandwiches to start off my lunches during the weekend.

From its website, "Panera Bread is expanding quickly across North America, operating 1,652 company-owned and franchise-operated bakery-cafes in 44 states and in Ontario, Canada as of December 25, 2012, under the Panera Bread®, Saint Louis Bread Co.® and Paradise Bakery & Café® names. With the single goal of making great bread broadly available to consumers across America, Panera Bread freshly bakes more bread each day than any bakery-cafe concept in the country. Every day, at every location, trained bakers craft and bake each loaf from scratch, using the best ingredients to ensure the highest quality breads. "

Panera has become extremely popular, on the heels of Cosi's (NASDAQ:COSI) lackluster performance stock-wise and business-wise over the past few years. Panera has shown incredibly strong growth over the last 10 years, yielding four or five-baggers for investors that were able to purchase at the right times.

Both companies pride themselves on their freshly baked breads, and "comfort food" that includes lite fare like soups, sandwiches, paninis and coffee drinks. Often, stores are set up to give off feelings of warmth; a lot include fireplaces and living room-like furniture in the place of where plastic booths and chairs would be.

Here's Panera's vitals, as of March 15, 2013:

Range 164.21 - 164.21
52 week 135.40 - 175.26
Open 164.21
Vol / Avg. 0.00/654,019.00
Mkt cap 4.88B
P/E

27.88

Div/yield -
EPS 5.89
Shares 29.74M
Beta 0.89
Inst. own 85%

Panera, on the surface, appears to be almost a perfect opportunity at an investment in a steadily growing company. However, here's a reason I'd be taking profits or opening a short position in Panera. Here's a couple of Panera's dirty little secrets:

Panera's Food is Perceived As Healthy, But is Really Far From It

Paired with the feeling of comfort food, Panera boasts on its website about the quality of the ingredients it uses. It talks about its antibiotic-free chicken and quality ingredients. The general sentiment of Panera patrons is that they're getting fresh-made food that's healthy for them. People don't see it along the same lines as fast food, and that's one of the reasons it's becoming so popular. Panera has consciously worked to move away from the stigmas of fast food, similar to the way Subway has done, and it's paid dividends.

Panera does bake the breads and bakery items fresh every night. I've seen the bakers come and go before open and after close. There is no doubt about how fresh those items are, and I'm not contesting that.

It's just that the "everything is fresh and healthy at Panera" reality of the situation is a bit different. Take the soups, for example. Soup is great comfort food, but anyone who peeks over the counter while waiting for their food sees that the "homemade" soups, while made by Panera somewhere, aren't made on site; they're reheated on site. I've noticed them being pulled from and put into thermalizers, which means they're shipped to your local store frozen. A thermalizer for soup works exactly the same way you steam your frozen broccoli sides from the grocery store in boiling water. It's a big huge vat of boiling water that thaws out and then heats soups before it is moved on to the serving line.

While perusing the Panera nutrition facts, I was absolutely floored when I discovered some of the commonly ordered menu items at Panera appear to be absolutely horrible for you. Here's a couple of eye-popping examples:

(All Facts from Panera's Nutrition .pdf)

ITEM Calories Sodium (MG) Carbs (G) Fat
Sourdough Bread Bowl 660 1340 131 3
Whole Paninis 710-980 1190-2460 67-103 26-39
Whole Signature Sandwiches 690-980 940-2820 39-95 22-55
Large Pastas 680-980 1250-2470 75-88 24-61
Whole Hand-Tossed Salads 380-790 480-1620 15-49 11-54

The "You Pick 2" is the most common thing I've seen people eat during lunchtime at my local Panera. When combining a soup & salad, sandwich & salad, or sandwich & soup combination -- in addition to a side and a drink -- it is a bit too easy to come up with combinations that easily yield 1,000+ calories, 2,000+mg of sodium, 40+ g of fat and 100+ g of carbohydrates. Yes, there are healthier choices you could make, but more often than not the customers I witness ordering lunches while I'm there just seem to assume that everything is healthy. The fact is, I've had healthier lunches at McDonald's.

This is going to be an issue that comes up in the future; the inevitable equating of Panera with healthy food is going to have to be addressed. The company has one shot to avoid this, and it's being proactive about this before the general public finds out on its own and a "Super Size Me" like shadow is inevitably cast over the quality of food at the company.

Panera, Like Many Others, is Still Susceptible to Big Market Changes

I just used this same argument in my analysis of Yum Brands (NYSE:YUM). Yum has a very similar Beta (0.83 vs. 0.89) and a very similar institutional ownership percentage (79% vs. 85%). In my latest article about Yum, I wrote:

As I pointed out in my last macro-view article entitled "The End is Near : Why the Bull Market is Finished," I contend that we are in the extreme late stages of this bull run that began in 2009 and that we're due for a correction; whether it be before another run-up or the beginning of a serious recession-style pullback.

As I said about Yum, with Panera's tendency to move in close correlation with the market in general, this is bearish news if you're like me and your macro-view on the market suggests a correction coming up. Even Cramer, earlier this week, warned investors not to nosedive into stocks. From CNBC:

If you're not already in stocks, Cramer thinks now is not the time to dive in.

There are developments in the market that he doesn't like.

"I see people all over the place right now trying to join me in the bull camp," Cramer explained. "I see people coming onto CNBC saying they were wrong; now they like the market."

Too many bulls gives Cramer pause.

"I'm seeing investors reach and chase, and as a result they've now driven the Dow Jones Industrial Average higher for eight straight days." There haven't been nine straight days of gains in the Dow since 1996.

Panera is Trading at an Aggressive P/E Ratio & Technicals Indicate a Price Dip

Panera's P/E ratio in the 20s commands consistent growth; anything short of that is going to lead to trouble for the stock. To date, the company has been opening up to 200 stores a year and has been growing sales between 10-15% per annum. If this growth does not stay very consistent, you can expect a pullback on Panera's share price.

The technicals are calling for a near-term pullback on the price as well. If you examine the chart below, you'll realize that you don't need to be a charting expert to see we are topping out again for a near-term pullback to the $155 support level. The stochastics and candlesticks together support this theory.

With the price hitting these four months of continued identical volatility, the moving averages start to creep closer and closer to one another. Like isobars dictating wind speeds on a weather map, the closer the moving averages get, the more potential for downward volatility; especially if the 50 day crosses under the 200 day.

Standing on Shaky Ground

It's going to be the position of this investor to either stay away or go short on Panera. My main argument is that the stock has been overbought and with its P/E ratio we have shifted to more risk for less reward. I'd contend that people who have been in Panera for years have already made a profit and that it's time to take some off the table. Opening a long position at this stage in the game appears risky to me.

As always, best of luck to all investors.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in PNRA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Plastic ABS

The continuing education: from OEMs, the message for molders is simple: know more. Do more. Do it faster.

It all started with a Saab cup holder.

I happen to own a 2004 model, a family car with a turbo (don't ask). Way back in December, before everyone started wondering if 3-D printing was on the deadpool, I tested out a MakerBot Replicator Mini for a few weeks. It was a heady time printing out Darth Vadar replicas from Thingiverse and experimenting with my own concoctions. Then, I tried to print something I actually needed, something that would save me a few hundred dollars or a trip to the junkyard.

As my dad used to say, that's when I noticed there was trouble with a capital T.

As recently as May 2015, 3-D printing was championed as a savior of all things. Last Friday, Newsweek magazine finally broke the ice. Maybe that should be: It shattered the ice, squished it into the ground, and sprayed it off the showroom floor with a hose. MakerBot recently whittled down its work force and the stock price of parent company Stratasys has plummeted. It's like someone sucked all of the momentum out of the maker industry and pulled the plug, then bought a new plastic plug at Walmart.

What happened? I often think of that Saab part as a good model of what went wrong. (By the way, I promise not to use any metaphors for 3-D printing from now on.) For starters, I really wanted to print the cup holder. I even asked a well-known Thingiverse designer for help, and was going to pay him, but he said the part was too complex. Wait, what? Too complex for a well-known designer? He even used the word "hassle" in his email back to me. The part is not something you'd use on a NASA spaceship. It does have a spring attached to two pieces of plastic that fold together.

What about a water bottle cage for my bike? Shouldn't be a big problem. There are plenty of designs. But when I actually printed one of them, it broke on my first ride. Also, a much more important piece of data: A water bottle cage costs about $4 at Amazon.com but even a relatively short spool of filament costs $65. The math doesn't compute. And, it doesn't make sense to spend the time.

From that experience, I knew something was wrong. As the Newsweek article notes, you can print only so many Yoda heads before you wonder why you bought the device. A 3-D printer won't magically terraform anything right before your eyes, and it even has problems with slightly complex car parts. I even remember my nephew, who is working as an intern for me this year, saying the industry needs to figure out this problem. It's fun for a while, but eventually you realize you need to do something practical after paying almost $1,000 for the product.

I believe there's a few lessons for anyone following trends. Here they are.

1. Make sure you try it yourself.

One of the main reason 3-D printing was mostly about the hype was due to the fact that many of the people writing about the field had never actually printed anything. Ironically, it's because it's so complex. I'll admit that it took me a few days to print out my first Darth Vadar toy, especially since there's some trickery with how you connect your laptop over Wi-Fi to even make your first Yoda head. And, when I printed out a Ford Mustang, it took me a few tries before the final model looked anything like the car I remember from my youth. Even then, it had one tire that looked flat. This did not turn me into a superfan. I'm still optimistic and love the idea of local manufacturing and the market is still ripe. I stand by this feature in Inc. magazine. But I'm not exactly on the fast train anymore. It's more like I'm on the bandwagon, bouncing along over rough terrain and mindful of how slow a bandwagon usually goes.

2. Ask hard questions.

3-D printing isn't totally dead, but it was always a little suspect. Even in the early days, I remember asking questions about the cost of materials, the practical applications for small business, and why anyone would ever want to print their food or in chocolate. Some of the answers were acceptable, some were more like the wizard behind the curtain pulling a lever and hoping you don't notice. If you were paying attention to what people said about 3-D printing back in 2014, you know it was always speculative. The official Gartner prediction was that the 34,010 printers sold in 2012 would somehow turn into 2.1 million units sold by 2018. That is not going to happen. It's really hard to sell a product that barely even exists anymore.

3. Talk to the outsiders.

This is the toughest one for me, because when you want to find out about a trend, the default approach is to look for people who are insiders. Analysts, designers, 3-D printing companies, and makers all had wonderful things to say about 3-D printing in 2014. I remember talking to a Ford spokesperson way back in 2012 or 2013 during a plant tour when he showed me the multimillion-dollar prototyping machines they use to make actual car parts. He was an outsider. I still remember the look he gave me when I asked about 3-D printing. It wasn't derision. It was more like he was challenging me to look around. They were using multimillion-dollar prototyping machines that make actual car parts. They had dozens of people working in that department. That spokesperson likely had the best viewpoint on consumer-level 3-D printing. His view was "wait and see" and that's still true. At the time, I doubt Ford was ready to install a bunch of MakerBot machines that would help it make the parts for the next Fusion. It was a burgeoning industry and still is. That's the only way to view it.

4. Do the math.

I mentioned the water-bottle cage. One huge lesson about any new trend is you need to get out a calculator and do the math. 3-D printing used the "razor and razor blade" approach to building an industry. Ask anyone who has decided to put a 3-D printer in a back closet about the one thing that ruined the experience and you will hear about the expenses. You have to add up the costs of a new product and the materials and compare that to your current process. Is making a plug cheaper than buying one at Walmart? That can be difficult, but maybe the math will reveal something. I see this same problem with virtual reality headsets. You can make one out of cardboard or you can pay $799 for the  HTC Vive. Someone needs to do some of the math here. What do the games cost? What do the parts cost? How rewarding is the experience compared to what you can do if you  go to Best Buy for five minutes? How many companies are making the games? Before you jump on any bandwagon, it's best to take a close look at the seating, the wheels, and the bumps in the road.

Chino Hills

The World's Top Chemical Companies


San Bernardino Plastic Delrin

Upland Plastic Manufacturers

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Upland and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Plastic HDPE

Upland Plastic Information and Training

NEW YORK -- Reportlinker.com announces that a new market research report related to the Industrial equipment industry is available in its catalogue.

World Industrial Fasteners

http://www.reportlinker.com/p096694/World-Industrial-Fasteners. html

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Global demand to grow 4.8% yearly through 2012

Global demand for industrial fasteners is projected to increase 4.8 percent annually to $66 billion in 2012. Fastener demand, which reached $52 billion in 2007, grew nearly 9 percent annually since 2002. Although part of this growth is inflationary in nature, especially since 2005, real gains in demand have been fueled by increases in world economic growth, increased fixed investment activity and greater manufacturing production. Although future market gains will be somewhat constrained by the use of new materials and manufacturing methods that reduce the numbers of fasteners required, global gains in motor vehicle production and greater demand for aerospace grade fasteners required for aircraft will contribute to growth.

Asia/Pacific, Western Europe are net exporters

Although many countries engage in the production of fasteners, few are net exporters. For example, the US is a major global supplier of high end fastener products, but is a net importer of fasteners overall. Countries in the Asia/Pacific region are the largest net exporters of fasteners to the rest of the world, followed by Western Europe. Taiwan, Japan and China lead the Asia/Pacific region and the world in net fastener exports. Germany (whose net export position matched China's in 2007), Italy and Switzerland contribute the most to Western Europe's position as a net exporter. China will soon overtake Japan as the world's second-largest net exporting country, after Taiwan.


Emerging economies to outpace developed world

Growing manufacturing economies and increases in fixed investment among the world's emerging economies will bring more rapid growth in fastener demand in these regions relative to the world's more mature, industrialized nations. Consequently, fastener demand growth in the Asia/Pacific, Africa/Mideast, Eastern Europe and Latin America will outpace demand growth in the US, Japan and Western Europe. China is expected to show the greatest gains in fastener demand of any other country, and is expected to become the world's secondlargest market for fasteners, after the US, before 2012. Market growth will also be strong in India, Thailand, Taiwan and Russia. Sales growth will be stimulated by favorable economic conditions and higher income levels leading to a rise in manufacturing activity and consumer expenditures for durable goods. Although countries with emerging economies will be the fastest growing markets for fasteners, the more developed economies -- such as the US, Canada, Japan and most of Western Europe -- will remain the most intensive users of fastening products, reflecting the advanced industrial and technological nature of their economies.

Motor vehicles still most important end-use sector

Consumption of industrial fasteners by the world's original equipment manufacturers (OEMs) represented 84 percent of total global fastener demand, with maintenance, repair and overhaul (MRO) applications accounting for the balance. Among OEMs, motor vehicle manufacturers consume the most fasteners, accounting for 35 percent of global demand in 2007. Electrical & electronic equipment and industrial machinery are also important OEM markets. Additionally, demand for aerospace-grade fasteners is expected to grow at a healthy pace, approaching $5 billion in 2012.

Study coverage

This new study, World Industrial Fasteners, presents historical demand data (1997, 2002 and 2007) and forecasts for 2012 and 2017 by market sector, fastener type, world region and for 29 countries. The study also assesses key market drivers and technologies, evaluates market shares and profiles 41 global competitors.

INTRODUCTION

I. EXECUTIVE SUMMARY

II. MARKET ENVIRONMENT

General

World Economic Overview

Recent Historical Trends

Macroeconomic Outlook

World Gross Fixed Investment Outlook

World Manufacturing Outlook

World Motor Vehicle Production Trends

Aerospace Equipment Manufacturing Trends

Pricing Patterns

Technology

Industrial Fastener Technology

New Fastening Technologies

Plastic Fasteners

Competitive Joining Technologies

Legal & Regulatory Environment

III. WORLD SUPPLY & DEMAND

General

World Industrial Fastener Markets

Regional Demand

Demand by Product

Standard Fasteners

Externally Threaded

Internally Threaded

Nonthreaded

Application-Specific

Aerospace-Grade

Demand by Market

Original Equipment Manufacturing

Motor Vehicles

Electrical & Electronic Equipment

Industrial Machinery

Fabricated Metal Products

Other OEM

MRO & Other

World Industrial Fastener Production

International Trade Flows

IV. NORTH AMERICA

General

Supply & Demand

United States

Canada

Mexico

V. WESTERN EUROPE

General

Supply & Demand

Germany

France

United Kingdom

Italy

Spain

Belgium

Netherlands

Other Western Europe

Austria

Sweden

Switzerland

All Other

VI. ASIA/PACIFIC

General

Supply & Demand

Japan

China

South Korea

India

Taiwan

Thailand

Australia

Other Asia/Pacific

Malaysia

Indonesia

All Other

VII. OTHER REGIONS

Latin America

General

Supply & Demand

Brazil

Other Latin America

Eastern Europe

General

Supply & Demand

Russia

Other Eastern Europe

Poland

Czech Republic

All Other

Africa/Mideast

General

Supply & Demand

Turkey

South Africa

Other Africa/Mideast

VIII. INDUSTRY STRUCTURE

General

Industry Composition

Market Share

Illinois Tool Works

Acument Global Technologies

Precision Castparts

Alcoa

Link Solutions for Industry

Nippon Industrial Fastener

Emhart Teknologies (Black & Decker)

Koninklijke Nedschroef

Other Leaders

Product Development & Manufacturing

Marketing & Distribution

Cooperative Agreements

Financial Requirements

Mergers & Acquisitions

Company Profiles

A-1 Technologies, see Link Solutions for Industry

Acument Global Technologies

Agrati (A.) SpA

Air Industries Corporation, see Precision Castparts

Alcoa Incorporated

Altenloh, Brinck & Company KG

Atlas Bolt & Screw Company, see Marmon Group

Avibank Manufacturing, see Precision Castparts

AVK Industrial Products, see Precision Castparts

Black & Decker Corporation

Boellhoff GmbH

Bufab AB

Cherry Aerospace, see Precision Castparts

Chun Yu Group

Deerwood Fasteners International, see Marmon Group

Doncasters Group Limited

Emhart Teknologies, see Black & Decker

FACIL & Cie GCV, see KAMAX-Werke Rudolf Kellermann GmbH & Company KG and Raymond (A.) Group

FastenTech Incorporated, see Doncasters Group Limited

Ferry Cap & Set Screw, see Doncasters Group

Finnveden AB

Fontana Luigi SpA

Gem-Year Industrial Company Limited

Hilti AG

Hi-Shear Corporation, see Link Solutions for Industry Ifastgroupe

Illinois Tool Works Incorporated

Infasco, see Ifastgroupe

Infasco Nut, see Ifastgroupe

Ingersoll Fasteners, see Ifastgroupe

KAMAX-Werke Rudolf Kellermann GmbH & Company

Knipping, see Link Solutions for Industry

Koninklijke Nedschroef Holding NV

Link Solutions for Industry

MacLean-Fogg Company

Marmon Group Incorporated

McKechnie Aerospace

Melrose plc

MNP Corporation

Monadnock Company, see Link Solutions for Industry

Monogram Aerospace Fasteners, see TriMas

Nelson Stud Welding Incorporated, see Doncasters Group Limited

Nippon Industrial Fastener Company

Nitto Seiko Company Limited

NYLOK Corporation, see Marmon Group

Park-Ohio Holdings Corporation

PennEngineering & Manufacturing Corporation

Piolax Incorporated

Precision Castparts Corporation

PSM International

Raymond (A.) Group

Robertson Incorporated, see Marmon Group

San Shing Fastech Corporation

SFS Holding AG

Shanghai Prime Machinery Company Limited

Shur-Lok Group, see Precision Castparts

Specialty Bar Products Company, see Doncasters Group

Specialty Bolt & Stud Incorporated, see Marmon Group

SPS Greer Stop Nut Incorporated, see Precision Castparts

SPS Technologies Incorporated, see Precision Castparts

Sundram Fasteners Limited

Sure-Drive USA Incorporated, see Marmon Group

Textron Incorporated

Tong Hwei Enterprise Company Limited

Topura Company Limited

Trifast plc

TriMas Corporation

TRW Automotive Holdings Corporation

TT electronics plc

Unbrako Engineered Fasteners, see Precision Castparts

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table

SECTION II -- MARKET ENVIRONMENT

1 World Gross Domestic Product by Region

2 World Gross Fixed Investment by Region

3 World Manufacturing Value-Added by Region

4 World Motor Vehicle Production by Region

5 World Aerospace Equipment Shipments by Region

6 World Industrial Fastener Price Deflators

7 World Plastic Fastener Demand

8 World Adhesives Demand by Region

SECTION III -- WORLD SUPPLY & DEMAND

1 World Industrial Fastener Demand by Region

2 World Industrial Fastener Demand by Product

3 World Externally Threaded Fastener Demand by Region

4 World Internally Threaded Fastener Demand by Region

5 World Nonthreaded Fastener Demand by Region

6 World Application-Specific Fastener Demand by Region

7 World Aerospace-Grade Fastener Demand by Region

8 World Industrial Fastener Demand by Market

9 World Motor Vehicle Fastener Demand by Region

10 World Electrical & Electronic Equipment Fastener Demand by Region

11 World Industrial Machinery Fastener Demand by Region

12 World Fabricated Metal Product Fastener Demand by Region

13 World Other OEM Fastener Demand by Application & Region

14 World MRO & Other Industrial Fastener Demand by Region

15 World Industrial Fastener Shipments by Region

16 Industrial Fastener Net Exports by Region

SECTION IV -- NORTH AMERICA

1 North America Industrial Fastener Supply & Demand

2 North America Industrial Fastener Demand by Product & Market

3 United States Industrial Fastener Supply & Demand

4 United States Industrial Fastener Demand by Product & Market

5 Canada Industrial Fastener Supply & Demand

6 Canada Industrial Fastener Demand by Product & Market

7 Mexico Industrial Fastener Supply & Demand

8 Mexico Industrial Fastener Demand by Product & Market

SECTION V -- WESTERN EUROPE

1 Western Europe Industrial Fastener Supply & Demand

2 Western Europe Industrial Fastener Demand by Product & Market

3 Germany Industrial Fastener Supply & Demand

4 Germany Industrial Fastener Demand by Product & Market

5 France Industrial Fastener Supply & Demand

6 France Industrial Fastener Demand by Product & Market

7 United Kingdom Industrial Fastener Supply & Demand

8 United Kingdom Industrial Fastener Demand by Product & Market

9 Italy Industrial Fastener Supply & Demand

10 Italy Industrial Fastener Demand by Product & Market

11 Spain Industrial Fastener Supply & Demand

12 Spain Industrial Fastener Demand by Product & Market

13 Belgium Industrial Fastener Supply & Demand

14 Belgium Industrial Fastener Demand by Product & Market

15 Netherlands Industrial Fastener Supply & Demand

16 Netherlands Industrial Fastener Demand by Product & Market

17 Other Western Europe Industrial Fastener Supply & Demand

18 Other Western Europe Industrial Fastener Demand by Product & Market

19 Other Western Europe Industrial Fastener Supply & Demand by Country

SECTION VI -- ASIA/PACIFIC

1 Asia/Pacific Industrial Fastener Supply & Demand

2 Asia/Pacific Industrial Fastener Demand by Product & Market

3 Japan Industrial Fastener Supply & Demand

4 Japan Industrial Fastener Demand by Product & Market

5 China Industrial Fastener Supply & Demand

6 China Industrial Fastener Demand by Product & Market

7 South Korea Industrial Fastener Supply & Demand

8 South Korea Industrial Fastener Demand by Product & Market

9 India Industrial Fastener Supply & Demand

10 India Industrial Fastener Demand by Product & Market

11 Taiwan Industrial Fastener Supply & Demand

12 Taiwan Industrial Fastener Demand by Product & Market

13 Thailand Industrial Fastener Supply & Demand

14 Thailand Industrial Fastener Demand by Product & Market

15 Australia Industrial Fastener Supply & Demand

16 Australia Industrial Fastener Demand by Product & Market

17 Other Asia/Pacific Industrial Fastener Supply & Demand

18 Other Asia/Pacific Industrial Fastener Demand by Product & Market

19 Other Asia/Pacific Industrial Fastener Supply & Demand by Country

SECTION VII -- OTHER REGIONS

1 Latin America Industrial Fastener Supply & Demand

2 Latin America Industrial Fastener Demand by Product & Market

3 Brazil Industrial Fastener Supply & Demand

4 Brazil Industrial Fastener Demand by Product & Market

5 Other Latin America Industrial Fastener Supply & Demand

6 Other Latin America Industrial Fastener Demand by Product & Market

7 Eastern Europe Industrial Fastener Supply & Demand

8 Eastern Europe Industrial Fastener Demand by Product & Market

9 Russia Industrial Fastener Supply & Demand

10 Russia Industrial Fastener Demand by Product & Market

11 Other Eastern Europe Industrial Fastener Supply & Demand

12 Other Eastern Europe Industrial Fastener Demand by Product & Market

13 Other Eastern Europe Industrial Fastener Supply & Demand by Country

14 Africa/Mideast Industrial Fastener Supply & Demand

15 Africa/Mideast Industrial Fastener Demand by Product & Market

16 Turkey Industrial Fastener Supply & Demand

17 Turkey Industrial Fastener Demand by Product & Market

18 South Africa Industrial Fastener Supply & Demand

19 South Africa Industrial Fastener Demand by Product & Market

20 Other Africa/Mideast Industrial Fastener Supply & Demand

21 Other Africa/Mideast Industrial Fastener Demand by Product & Market

SECTION VIII -- INDUSTRY STRUCTURE

1 Industrial Fastener Sales for Selected Manufacturers, 2007

2 Selected Cooperative Agreements

3 Selected Acquisitions & Divestitures

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT

1 World Manufacturing Value-Added by Region, 2007

2 Relationship Between Per Capita Industrial Fastener Demand

& Per Capita Manufacturing Value-Added, 2007

3 World Industrial Fastener Price Deflators, 1997-2017

4 World Plastic Fastener Demand, 1997-2017

SECTION III -- WORLD SUPPLY & DEMAND

1 World Industrial Fastener Demand by Region, 2007

2 Share of Industrial Fastener Demand Growth by Region, 2007-2012

3 World Industrial Fastener Demand by Product, 2007

4 World Industrial Fastener Demand by Market, 2007

5 World Industrial Fastener Shipments by Region, 2007

SECTION IV -- NORTH AMERICA

1 North America Fastener Demand by Country, 2007

SECTION V -- WESTERN EUROPE

1 Western Europe Industrial Fastener Demand by Country, 2007

SECTION VI -- ASIA/PACIFIC

1 Asia/Pacific Industrial Fastener Demand by Country, 2007

SECTION VII -- OTHER REGIONS

1 Eastern Europe Industrial Fastener Demand by Country, 2007

2 Africa/Mideast Industrial Fastener Demand by Country, 2007

SECTION VIII -- INDUSTRY STRUCTURE

1 World Industrial Fastener Market Share by Company, 2007

To order this report:

World Industrial Fasteners

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More market research reports here!

Plastic Types

When You Don’t Recycle Plastic, This is Where It Ends Up

Panera Bread (NASDAQ:PNRA) is one of the fastest-growing and most successful casual food chains in operation to date. I was a former Panera addict, hooked on soup in a bread bowl and panini sandwiches to start off my lunches during the weekend.

From its website, "Panera Bread is expanding quickly across North America, operating 1,652 company-owned and franchise-operated bakery-cafes in 44 states and in Ontario, Canada as of December 25, 2012, under the Panera Bread®, Saint Louis Bread Co.® and Paradise Bakery & Café® names. With the single goal of making great bread broadly available to consumers across America, Panera Bread freshly bakes more bread each day than any bakery-cafe concept in the country. Every day, at every location, trained bakers craft and bake each loaf from scratch, using the best ingredients to ensure the highest quality breads. "

Panera has become extremely popular, on the heels of Cosi's (NASDAQ:COSI) lackluster performance stock-wise and business-wise over the past few years. Panera has shown incredibly strong growth over the last 10 years, yielding four or five-baggers for investors that were able to purchase at the right times.

Both companies pride themselves on their freshly baked breads, and "comfort food" that includes lite fare like soups, sandwiches, paninis and coffee drinks. Often, stores are set up to give off feelings of warmth; a lot include fireplaces and living room-like furniture in the place of where plastic booths and chairs would be.

Here's Panera's vitals, as of March 15, 2013:

Range 164.21 - 164.21
52 week 135.40 - 175.26
Open 164.21
Vol / Avg. 0.00/654,019.00
Mkt cap 4.88B
P/E

27.88

Div/yield -
EPS 5.89
Shares 29.74M
Beta 0.89
Inst. own 85%

Panera, on the surface, appears to be almost a perfect opportunity at an investment in a steadily growing company. However, here's a reason I'd be taking profits or opening a short position in Panera. Here's a couple of Panera's dirty little secrets:

Panera's Food is Perceived As Healthy, But is Really Far From It

Paired with the feeling of comfort food, Panera boasts on its website about the quality of the ingredients it uses. It talks about its antibiotic-free chicken and quality ingredients. The general sentiment of Panera patrons is that they're getting fresh-made food that's healthy for them. People don't see it along the same lines as fast food, and that's one of the reasons it's becoming so popular. Panera has consciously worked to move away from the stigmas of fast food, similar to the way Subway has done, and it's paid dividends.

Panera does bake the breads and bakery items fresh every night. I've seen the bakers come and go before open and after close. There is no doubt about how fresh those items are, and I'm not contesting that.

It's just that the "everything is fresh and healthy at Panera" reality of the situation is a bit different. Take the soups, for example. Soup is great comfort food, but anyone who peeks over the counter while waiting for their food sees that the "homemade" soups, while made by Panera somewhere, aren't made on site; they're reheated on site. I've noticed them being pulled from and put into thermalizers, which means they're shipped to your local store frozen. A thermalizer for soup works exactly the same way you steam your frozen broccoli sides from the grocery store in boiling water. It's a big huge vat of boiling water that thaws out and then heats soups before it is moved on to the serving line.

While perusing the Panera nutrition facts, I was absolutely floored when I discovered some of the commonly ordered menu items at Panera appear to be absolutely horrible for you. Here's a couple of eye-popping examples:

(All Facts from Panera's Nutrition .pdf)

ITEM Calories Sodium (MG) Carbs (G) Fat
Sourdough Bread Bowl 660 1340 131 3
Whole Paninis 710-980 1190-2460 67-103 26-39
Whole Signature Sandwiches 690-980 940-2820 39-95 22-55
Large Pastas 680-980 1250-2470 75-88 24-61
Whole Hand-Tossed Salads 380-790 480-1620 15-49 11-54

The "You Pick 2" is the most common thing I've seen people eat during lunchtime at my local Panera. When combining a soup & salad, sandwich & salad, or sandwich & soup combination -- in addition to a side and a drink -- it is a bit too easy to come up with combinations that easily yield 1,000+ calories, 2,000+mg of sodium, 40+ g of fat and 100+ g of carbohydrates. Yes, there are healthier choices you could make, but more often than not the customers I witness ordering lunches while I'm there just seem to assume that everything is healthy. The fact is, I've had healthier lunches at McDonald's.

This is going to be an issue that comes up in the future; the inevitable equating of Panera with healthy food is going to have to be addressed. The company has one shot to avoid this, and it's being proactive about this before the general public finds out on its own and a "Super Size Me" like shadow is inevitably cast over the quality of food at the company.

Panera, Like Many Others, is Still Susceptible to Big Market Changes

I just used this same argument in my analysis of Yum Brands (NYSE:YUM). Yum has a very similar Beta (0.83 vs. 0.89) and a very similar institutional ownership percentage (79% vs. 85%). In my latest article about Yum, I wrote:

As I pointed out in my last macro-view article entitled "The End is Near : Why the Bull Market is Finished," I contend that we are in the extreme late stages of this bull run that began in 2009 and that we're due for a correction; whether it be before another run-up or the beginning of a serious recession-style pullback.

As I said about Yum, with Panera's tendency to move in close correlation with the market in general, this is bearish news if you're like me and your macro-view on the market suggests a correction coming up. Even Cramer, earlier this week, warned investors not to nosedive into stocks. From CNBC:

If you're not already in stocks, Cramer thinks now is not the time to dive in.

There are developments in the market that he doesn't like.

"I see people all over the place right now trying to join me in the bull camp," Cramer explained. "I see people coming onto CNBC saying they were wrong; now they like the market."

Too many bulls gives Cramer pause.

"I'm seeing investors reach and chase, and as a result they've now driven the Dow Jones Industrial Average higher for eight straight days." There haven't been nine straight days of gains in the Dow since 1996.

Panera is Trading at an Aggressive P/E Ratio & Technicals Indicate a Price Dip

Panera's P/E ratio in the 20s commands consistent growth; anything short of that is going to lead to trouble for the stock. To date, the company has been opening up to 200 stores a year and has been growing sales between 10-15% per annum. If this growth does not stay very consistent, you can expect a pullback on Panera's share price.

The technicals are calling for a near-term pullback on the price as well. If you examine the chart below, you'll realize that you don't need to be a charting expert to see we are topping out again for a near-term pullback to the $155 support level. The stochastics and candlesticks together support this theory.

With the price hitting these four months of continued identical volatility, the moving averages start to creep closer and closer to one another. Like isobars dictating wind speeds on a weather map, the closer the moving averages get, the more potential for downward volatility; especially if the 50 day crosses under the 200 day.

Standing on Shaky Ground

It's going to be the position of this investor to either stay away or go short on Panera. My main argument is that the stock has been overbought and with its P/E ratio we have shifted to more risk for less reward. I'd contend that people who have been in Panera for years have already made a profit and that it's time to take some off the table. Opening a long position at this stage in the game appears risky to me.

As always, best of luck to all investors.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in PNRA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Upland

The Basics of Stretch Blow Molding PET Containers.


San Bernardino Plastic Delrin

Colton ABS Plastic Manufacturing Process

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they’re made from recycled plastics

Yes, he’s heard the career advice line from The Graduate. (“I just want to say one word to you: plastics.”)

You see, if you’re Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It’s not quite as silly as it sounds.

Robbins is president of a company, which takes recycled plastics — milk jugs are a primary source of raw material — and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World. In many areas in the country, especially the Colton and areas near by, recycling has become much more popular.

And no doubt there’s a desperate need for someone to do something with what the industry calls post-consumer (used) plastics. Recycled plastic materials are in demand.

With Americans producing 160 million tons of solid waste a year — that’s better than three pounds per person per day — landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

Online Plastics

Colton Plastic Information and Training

mdmoon/iStock/Getty Images

ASTM International, previously known as the American Society for Testing and Materials, is a leading global authority on the development of safety standards for consumer products. Their "D-4236" designation is meant to alert consumers of any chronic health hazards that may result from using art-related supplies. In 1990, the Labeling of Hazardous Art Materials Act, or LHAMA, made it a federal requirement for all such supplies to feature the D-4236 designation on their labels.

Resources

  • Fine Art Tips With Lori McNee: Understanding the Health Standards of Your Art Materials

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Polymer Sheet Suppliers

PLASTIC RECYCLING PROCESS: THE NEED AND BENEFITS!

Alan Robbins is betting everything he owns that the world will pay more for picnic tables, mailbox posts, and speed bumps if they're made from recycled plastics

Yes, he's heard the career advice line from The Graduate. ("I just want to say one word to you: plastics.")

And yes, he's gotten used to the jokes about his business's name (The Plastic Lumber Co.?).

And no, he doesn't mind them at all.

You see, if you're Alan E. Robbins, 43, a sense of humor comes in handy.

You need one, given what he wants to do with the rest of his life. Robbins, a charming father of five, wants to make wood obsolete. Maybe concrete, too.

It's not quite as silly as it sounds.

Robbins is president of the Akron company, which takes recycled plastics -- milk jugs are a primary source of raw material -- and turns them into everything from mailbox posts, picnic tables, and speed bumps to retaining walls at Sea World.

And no doubt there's a desperate need for someone to do something with what the industry calls postconsumer (used) plastics.

With Americans producing 160 million tons of solid waste a year -- that's better than three pounds per person per day -- landfills are beginning to overflow. And while plastics account for only 7% of those garbage heaps by weight, they make up 13% of their volume. Anything, even a mailbox post, that can reduce that amount of trash is something to be wished for.

The problem is that a lot of people have been rubbing on the genie's lamp for a long time. The first reported use of recycled plastics dates back to the 1930s -- a Du Pont chemist with a sense of humor used some postindustrial plastics to make a length of fence -- so the idea is not exactly new.

And Robbins is not exactly without competition. The notepad holders, in-and-out-trays, and trash cans produced by Rubbermaid Inc. are made in large part of recycled plastics. Plus, companies such as Du Pont, Dow, Amoco, Mobil, and Occidental have all begun joint-venture projects aimed at making recycled plastics widely available.

But despite the growing interest, there are two major reasons why the idea of recycled plastics has not caught on -- and Robbins must deal with both.

First, there's no consistent source of raw materials. Recycling is still not mandatory nationally, and even those states or towns with recycling programs don't always require that plastics be left by the curb, believing -- mistakenly -- plastics can't be recycled. (They can. But since traditional recycling methods can't guarantee the purity of recycled resins, recycled plastics are not used in packaging that comes in direct contact with food.)

Cost is the second reason that everything from marina docks to highway dividers is not yet made from recycled plastic. If you use recycled plastics as a substitute for virgin ones, as the carpet industry is doing, you'll save money.

But if you use recycled plastics to replace materials such as wood and concrete, the economics change. Robbins's picnic tables and parking stops cost up to twice as much as those made from traditional materials.

While that's a problem, it's not a insurmountable one, says Robbins, who has worked as everything from a restaurant manager to a stockbroker (see "The Founder," page 4). His sales pitch stresses that since plastic lumber and plastic concrete last longer than their traditional counterparts, they're actually cheaper over the long haul.

Besides, as Robbins points out, the potential market is huge. In 1989, only 250 million pounds of plastics were recycled, yet the demand for materials that plastics could replace was thousands of times greater, according to Robert A. Bennett, associate dean of the college of engineering at the University of Toledo. For example, last year Americans used some 3 billion pounds of treated lumber, and roughly 7.4 billion board feet of wood just to build pallets.

Robbins is not looking to replace all that wood -- just a splinter of it.

And he's convinced his timing is right. Some 20 years after the first Earth Day, taking care of the environment is suddenly fashionable again. Everyone from McDonald's to Dayton Hudson department stores is using seedlings as a sales promotion tool. Time magazine made "Endangered Earth" its planet of the year, and George Bush will tell anyone willing to read his lips that he is "the environmental President."

Even the plastics industry has gotten into the act, creating impressive-sounding task forces (The Council for Solid Waste Solutions) and running commercials during the Sunday morning news shows explaining that it, too, wants a cleaner environment. When you have politicians and Fortune 500 CEOs tripping over themselves to be ecologically correct, it's relatively easy to get people to listen -- for a little while, anyway -- when you tell them you're selling products made out of recycled plastics.

Robbins is making the most of the opportunity. Early on he hired a public-relations firm that has made his company better known than his sales would justify, and the attention is beginning to pay off. "We're getting inquiries from businesses and governmental units we never knew existed."

When he returns those calls and letters, Robbins is quick to stress the advantages his goods offer. Products made from plastic weigh less than concrete (that means fewer injuries and workers' compensation claims), require less maintenance (unlike wood or concrete, they don't need to be repeatedly stained or painted), and are virtually impervious to the weather.

Plus, plastic lumber can be sawed, nailed, drilled, glued, and bolted, just like its wood counterpart.

In 1989, convinced he was onto something, Robbins hired Ken Boersma, who had worked at another plastics company on recycling, to create a proprietary extruding machine, and The Plastic Lumber Co. was born.

* * *

Marketing: Robbins started with a great idea: he'd let his market tell him what his sales, positioning, and pricing strategy should be. Unfortunately, the market is speaking with about as much clarity as was heard from the tower of Babel.

And the message that is getting through is certainly not the one Robbins expected.

Before opening his doors last September, Robbins knew his potential market was huge. For example, anyone with a parking lot might need The Plastic Lumber Co.'s car stops (the rectangular bar that keeps a car from taking up two spaces) and speed bumps. So Robbins tried to narrow the field to places where he'd have the easiest time making the sale.

"I figured we should go after universities and municipalities," says Robbins. "With landfills being close to capacity, government seemed a natural. The universities also seemed a good fit, given the environmental appeal of the product.

"I thought there might be a consumer market as well. I could see selling our picnic tables through hardware stores. And I knew there'd also be a commercial application -- things like pallets -- but I wasn't really going to chase that hard at first."

What happened? Commercial sales now account for virtually all of his revenues.

Why? Because the huge marketing advantage Robbins thought he had -- that he's using only recycled plastics -- produces nothing but yawns when he explains it to schools and government.

Yes, they quickly acknowledge, using recycled components is a good idea. Now, let's talk price.

The moment that happens, Robbins is on the defensive. His parking stops cost about $22.50, or about 50% more before installation, than those made out of concrete. His picnic tables are easily twice the price of their wood counterparts.

But, Robbins argues, those prices are misleading. You must look at the long-term costs of using plastic versus concrete or wood. "Somewhere around 5 to 10 years out, we actually become cheaper, and we get more so every year after that, because there are no maintenance costs."

That may be, but his product is still more expensive initially. Cost savings over a product's lifetime can be a very difficult idea for schools and especially municipalities -- which are used to awarding contracts to the lowest bidder -- to understand.

Robbins's marketing thrust isn't misguided. The biggest company in this tiny field is getting a very large part of its revenues from a municipality. But at $3.5 million in sales, Hammer's Plastic Recycling Corp., in Iowa Falls, Iowa, can afford to have a marketing staff. Hammer's people met continually with city of Chicago park department officials, for instance, to answer their questions, eventually working out a deal for landscape ties for playgrounds and plastic slats for park benches.

But Plastic Lumber Co. is woefully undercapitalized. There's no money for a marketing staff. In fact, there's not much of a staff at all. Robbins and Boersma had a falling out, so the entire company consists of Robbins, his administrative assistant, and the four plant workers who actually turn out his product.

If you're running the plant and front office, and also chasing every sales lead that comes in, you don't have a whole lot of time to spend educating some civil servant about the long-term advantages of plastic lumber. While there are growing signs that states and municipalities may be willing to exempt recycled products from the traditional bidding process, that hasn't happened yet.

Fortunately for Robbins, businesses get the concept right away. Some 80% of The Plastic Lumber Co.'s revenues come from a placement in a building-supply catalog.

But that's not the kind of sales mix Robbins was looking for. For one thing, he's now overly dependent on that one distributor, and for another, selling to businesses just about locks him into commodity status.

When Robbins was punching numbers into his Lotus spreadsheet, trying to forecast potential profit margins, he assumed he would average 20% pretax profits. In part, he'd do that by keeping his costs low -- while Robbins budgeted raw materials cost at 44% of sales, labor was expected to be just 9%. But he also expected he'd fetch a premium price for his products.

First off, he thought he'd get a bit more for shaping that recycled plastic into picnic tables and the like. "After all, every time you punch a hole or screw in a bolt, you're adding value, and people are willing to pay for that," he says. And given the unique nature of his goods, plus the lack of competition in the field -- financing for recycling companies has proven hard to come by -- Robbins figured people would be willing to pay a little extra for something that was environmentally on the side of the angels.

Well, some consumers might. And so might some universities. But businesses tend not to be that altruistic. "Purchasing agents are trained killers" is the way Robbins puts it. So far, pretax margins on the speed bumps and car stops he has sold to commercial accounts -- businesses tend not to buy Robbins's value-added products -- have been lower.

Bothersome as this is, at least Robbins knows there's a market for his paving products. With plastic lumber . . . well, let's quote the business plan: "The plastic lumber market can only be considered in its infancy."

To be honest, no one knows what kind of recycled plastic products -- if any -- the market wants, and that's an important point, because when it comes to recycling, there is plastic and then there is plastic.

Some companies, such as Wellman Inc., headquartered in Shrewsbury, N.J., have chosen to specialize. Wellman deals almost exclusively with polyethylene terephthalate, which is used to make soda bottles. Empty soda bottles are traditionally recycled into things like carpet fibers and the linings of parkas and sleeping bags.

The problem is that the equipment needed both to recycle polyethylene terephthalate and to convert it into usable products is expensive. The Plastic Lumber Co. avoids most of that cost by being less fussy about the plastics it uses. It either buys raw materials or cleaned and sorted scrap, which is then melted down and extruded.

However, since the resulting plastic is a blend -- a catsup bottle, for example, which might be part of the company's raw materials mix, is made up of five to seven different plastics -- it's impossible to predict the quality or strength of the resulting products.

That's why the company focuses on making simple products in which the specific properties of the plastic are not important.

Robbins started by selling mailbox posts and picnic tables because they are relatively easy to make. "We're not all that skilled as craftsmen," he says with a shrug. He'll be more than happy to add to the line -- within the limits of his plastic's quality, of course; making a plastic four-by-four to support a swing set would be out of the question, for example, because its strength would not be up to code. But first he needs the market to tell him what it wants.

Ironically, Robbins is finding himself with more time to listen than he expected. His products turned out to be very difficult to sell during cold weather. Nobody is going to go and put a speed bump on the ground when it is 20 below zero, and very few people go looking for picnic tables when they have to shovel their way out the front door. "I didn't realize the extent to which we would be affected by the weather," he says. "Next winter we will concentrate our marketing efforts on the southern part of the country, and on building inventory."

That assumes that (1) he'll have a better handle by then on who his customers are and what they need and (2) his money will hold out.

* * *

Capital: If Plastic Lumber doesn't make it, it won't be because Robbins overspent on decorating.

As you walk into Robbins's fifth-floor offices in downtown Akron, you have to hurdle the tires strewn about and duck under stunning pictures of elaborate food displays. Robbins sublets from his brother-in-law, a commercial photographer who does a lot of work for area food and tire companies. Says Robbins: "By sharing space with him, I didn't have to worry about going out and buying fax machines and copiers."

The same sense of frugality exists throughout the company. Robbins drives a 1982 Oldsmobile diesel that had been in mothballs. He pays $2 per square foot -- about half the going rate -- for his production facility in an old tire plant that Ohio is trying to turn over to small businesses. And by marrying interest from a CD to a term loan in a linked-deposit program, Robbins has borrowed $154,000 at about prime.

But the money is going quickly, thanks to a combination of lower-than-budgeted sales and cost increases primarily caused by problems with the extruder. "We've had to rebuild the chilling system and the molds a few times," says Robbins. "What has happened, given the cost overruns, is that we've gotten one machine for the price of two."

The upshot: the company lost $55,000 during its first three months. And when sales failed to come close to forecasts this past January and February, Robbins reduced salaries and eliminated his public-relations program and most of his advertising. The Plastic Lumber Co. is still losing money.

With Robbins having contributed about his entire savings, and the banks reluctant to loan any more, what is needed -- and soon -- are additional equity investors. (When the company was formed, Robbins sold stock and options totaling 24% of it to a friend for $50,000.) "We've been putting off looking for outside funding," says Robbins. "The better shape we can get the company in before offering stock, the higher the valuation will be. But we are now starting to hold serious meetings with venture capitalists."

The question is, of course, whether the money will come in time -- and in sufficient amounts. Even if it does, there are other problems. Is it reasonable to expect university administrators and civil servants to be farsighted? Will they pay higher prices today for savings tomorrow?

And what about Robbins's embryonic marketing program? There's little doubt that someday there will be a huge market for products made from recycled plastics, but which products?

And even if Robbins does figure out which products the market wants, can he muster the technical expertise to make them? Good questions all, says Robbins, who remains sanguine nonetheless. "We'll be OK."

We'll see.

-- Research assistance was provided by Leslie Brokaw.


EXECUTIVE SUMMARY

The Company:

The Plastic Lumber Co., Akron

Concept: Recycle plastics into products such as picnic tables, mailbox posts, and speed bumps

Projections: Profits of about $6,000 in 1990, almost $500,000 in 1991; pretax profits of 40% and 44%

Hurdles: Defining market; convincing customers that paying more now for products made with recycled materials will save them money in the long run; overcoming lack of technical expertise


THE FOUNDER

"I've been preparing for this my whole life," says Alan E. Robbins, referring to the company he started last year. Given that he's constantly discussing and/or handling such materials as polypropylene and high-density polyethylene, you'd think he was talking about years of toil in the chemistry lab. He's not.

Robbins, a former industrial-technology major who "finished in the upper 98% of my class; thank heaven for that other 2%" at Miami University in Oxford, Ohio, is talking about how the past 20 years have equipped him to run his own business.

He began work in Oxford running restaurants (good for learning how to manage people) and went on to run a mom-and-pop supermarket (people skills again, inventory control, marketing). From there Robbins worked as a headhunter (telemarketing, selling) and eventually a stockbroker ("great financial training"). Before starting The Plastic Lumber Co., Robbins was director of merchant sales for Rondy & Co., an Ohio-based reprocessor of scrap rubber and plastic.

"Everything I've ever done has led me to running The Plastic Lumber Co.," says Robbins, who is putting his money where his mouth is. In budgeting his salary for the start-up, he took about a 50% pay cut -- to $55,000 a year. Since November, given the company's slower-than-expected start, he's been working for free.


FINANCIALS

Plastic Lumber Co. Operating Statement

1990 1991

Sales $495,000 $2,075,000

Cost of Sales

Raw materials 222,000 913,000

Direct labor 44,500 186,750

Rent 21,132 23,000

Electricity 11,535 48,349

Total Cost of Sales 299,167 1,171,099

Gross Profit 195,833 903,901

Gross profit % 40% 44%

Expenses 1990 1991

Production 53,120 150,568

Marketing 42,000 72,000

General & administrative 55,000 114,684

Finance costs 15,000 14,737

Depreciation 10,529 41,736

Other 13,400 24,000

Total Expenses 189,049 417,725

Net Income 6,784 486,176

(continued)


WHAT THE EXPERTS SAY

FINANCIER

NANCY PFUND

General partner, Hambrecht & Quist, a San Francisco venture capital firm; co-manager of its $17-million Environmental Technology Fund, which has a position in a recycling company

I think Robbins was correct in perceiving there's a tremendous market opportunity here. The concept of the business, broadly defined, is sound; there will be exponential growth in the waste minimization segment of the market.

But I think Robbins has made things difficult for himself by focusing on the lower end of the business. By taking mixed plastics and making something that can't be used for much because of the tensile strength, he's artificially narrowed his business opportunities to the commmodity level. Recycled products with the characteristics of virgin materials -- that's where money will be made. If I were Robbins I would upgrade the technology and therefore the end product.

How do you do that? He needs to get some help where he doesn't have the background or the inclination. He's got marketing contacts and distribution experience; he should weave that into some kind of relationship with a plastics recycler with a little more know-how. He does have a little business there that could feed into the activities of another firm. There are all kinds of options: a co-marketing arrangement, or a subcontractor or OEM relationship. He's certainly got a lot of energy and enthusiasm, which could be put to better use.

One of the common mistakes is to think people are going to buy products just because they're environmentally correct. You can't rely on that kind of altruism. It certainly can help. But people are very dollars-and-cents oriented. Recycled plastics products do not have to be more expensive than what they're replacing, and in the long run they can't be. In the long run they have to be cheaper.

If Robbins is lucky, maybe he can bring in the top line, but I think his costs are going to increase. The company is very thin, and he can't run a business effectively and wear all the hats at the same time. But he does have the option of finding someone who will work with him. He's developed a market and has some customers, which is an asset that should be valuable to someone.

OBSERVER

THOMAS J. PENRICE

Director, Plastic Consulting for Strategic Analysis Inc., a Reading, Pa., firm

I'm very bullish on Robbins's idea and his chances for success. I think his sales forecast is actually quite modest. And there may even come a time when his raw materials cost -- which is relatively high now -- could be negative. As communities collect all this plastic, they're going to need somebody to take it off their hands.

However, there is a major problem. He has seriously underestimated his marketing costs. If he uses the $72,000 he has budgeted (on $2 million of projected sales) to hire a marketing person -- and he'll pay at least that to get someone qualified -- there won't be any budget for mailings and travel. You have to go to the trade shows and network.

Eventually there'll be many viable consumer and industrial applications for recycled plastic products. However, Robbins's company must first survive the next several months. Instead of letting his customers dictate his marketing approach, I would begin by working directly with major producers of plastic resins -- the Dows and Du Ponts -- and work out a deal where they would give him the plastics they can't use in their recycling programs, the co-mingled plastics, and see if they would be willing to buy the picnic tables and the like from him. These companies all have active recycling programs and are eager to promote recycling. Once the applications are demonstrated to be practical and cost effective, however, Robbins has got to reach a broader market.

COMPETITOR

BRIAN HARPER

Technical director, Hammer's Plastic Recycling Corp., Iowa Falls, Iowa, The Plastic Lumber Co.'s largest competitor

They're going to be struggling to stay alive unless they do something clever, and there doesn't seem to be anything clever on the horizon.

First, the company is grossly undercapitalized. And it's not spending the little money it does have on the right things. It's marketing that drives companies that make plastic lumber, yet Robbins has scaled back his marketing efforts to save money. He needs large orders to survive, and without a marketing budget, he's going to be hard pressed to get them.

Even with a marketing budget, he would seem to be in trouble because he doesn't have a marketing strategy. He's going with the flow, and that's a big mistake. There is no inherent market for plastic lumber; you have to create one. I think Robbins believes -- as a lot of companies that are no longer in business once believed -- that his product is so good that people will fight to buy it. That's wrong. It's always been wrong.

But in addition to overestimating sales and underestimating marketing expenses, he has another problem. There is no depth of technology. Ken Boersma has left. Who's going to replace him?

If I were running their company, I'd go out and recruit a good marketing man and a good technology person, but I don't see how Robbins will be able to attract the money he'd need to do it. When potential investors visit the company's offices and see the lack of staff, they're going to conclude the company is close to broke. The venture capitalists won't trust the company with their money, and customers won't trust it with their orders.

Plastic Lumber is where we were four years ago, but we had marketing and we had technology people who allowed us to create new products. They have neither.

CUSTOMER

GLENN TROWBRIDGE

President, National Association of County Park & Recreation Officials; Park & Recreation Director for Clark County (Las Vegas), Nev.

New products have to do something above and beyond what old ones do. There are a hundred manufacturers of picnic tables and speed bumps out there already. If Plastic Lumber came out with, say, a vandal-proof bench you could wipe spray paint off of, now we're dealing with something. But customers already have long-term relationships with manufacturers, and they're not going to set them aside just because somebody says, "Hey, I've got a newer product." I'm approached at least once a month by picnic-table manufacturers; it's an incredibly competitive field.

Robbins will have to prove his claim of extended life expectancy -- he can't just come out and say it costs more but is going to last twice as long. The documentation seems absent at this point.

If the company isn't competing on price it's going to have to convince customers to raise the standards of what they spec -- for instance, to require that benches last six years -- and then the company will have to prove that its product meets those standards. Convincing buyers and architects to stop specifying one product and specify something more stringent, on the basis that it's better for them, is an uphill battle. But that's how the game works.

Colton

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