Equipment, Additives, and Others

Firms that offer equipment, additives, and the like to the industry are important contributors, but there are a number of relatively small specialized companies, as well as many small specialized divisions of much larger companies, whose primary business may well be in other, nonplastic markets. As warned in the preface, the variety of products, companies, and interests under this heading preclude anything more than limited commentary. 

It may seem repetitious, but it is technology once more that is the reason that these firms exist. The need to process materials more efficiently, to endow compounds with enhanced properties, to measure those properties accurately and reproducibly, etc., is what drives the business of this group of companies. The plastics industry could not exist in its present form without these vital technologies. 

One observes that all of these segments of the industry are evidently subject to much the same cost pressures. Smaller companies are acquired by larger ones in order to achieve the minimum size necessary to compete on a broad scale, both from the standpoint of product line as well as global presence. The use of the combined products in diversified markets helps to spread overhead over a larger sales base and mitigates economic cycles to some extent. 

Consolidation has particularly affected the machinery makers since the turn of the century, due to the two economic recessions in this period (2001-2012) the number of molders in the United States, for example, has fallen sharply by over one-third, flooding the market with used machinery and driving new machinery demand sharply down. Consequently, there have been a number of mergers that have rolled up many older European and American brand names into significantly fewer companies. The latter will be better able to withstand the challenge from Chinese machinery companies, which are now emerging as formidable competitors. 

---