SIC 3069
FABRICATED RUBBER PRODUCTS, NOT ELSEWHERE CLASSIFIED



This category covers establishments primarily engaged in manufacturing industrial rubber goods, rubberized fabrics and vulcanized rubber clothing, and miscellaneous rubber specialties and sundries, not elsewhere classified. Included in this industry are establishments primarily engaged in reclaiming rubber and rubber articles. Establishments primarily engaged in the wholesale distribution of scrap rubber are classified in SIC 5093: Scrap and Waste Materials. Establishments primarily engaged in rebuilding and retreading tires are classified in SIC 7534: Tire Retreading and Repair Shops; those manufacturing rubberized clothing from purchased materials are classified in SIC 2385: Waterproof Outerwear; and those manufacturing gaskets and packing are classified in SIC 3053: Gaskets, Packing, and Sealing Devices.

NAICS Code(s)

313320 (Fabric Coating Mills)

326192 (Resilient Floor Covering Manufacturing)

326299 (All Other Rubber Product Manufacturing)

Industry Snapshot

This industry includes more than 100 rubber products not classified in other rubber products industries such as toy balloons, rubber brake linings, rubber rafts and pontoons, and many others. The total value of U.S. shipments for these products was an estimated $7.3 billion in 2001. There were approximately 1,225 establishments in the industry at the turn of the twenty-first century, employing some 51,792 workers. After rising steadily since the beginning of the 1990s, sales and shipments had begun to fluctuate between $7.7 billion and $7.9 billion in the late 1990s, before declining in the early 2000s.

Organization and Structure

Growing demand among manufacturers for rubber products fueled shipment increases, although higher consumer spending was also a major factor. Demand for items used in automobiles and those related to health protection forecast larger-than-average percentage increases. With a

SIC 3069 Fabricated Rubber Products, Not Elsewhere Classified

large number of players in these market segments, firms would continue to focus on improved customer service, product design, and delivery. U.S. firms exported a good deal of products to industrialized countries, but also imported a considerable amount of low-cost products from developing nations. Manufacturers were expected to continue focusing on flexible, customer-oriented production. Development of new materials also forecast improved product quality and durability.

Current Conditions

Gloves and Condoms. With the AIDS crisis escalating throughout the 1980s and continuing into the 1990s, more attention has been focused on latex gloves and condoms than on any other fabricated rubber product. Both products are made by a dipping process in which a form in the shape of the product desired (such as a hand) is dipped into latex. Condom sales fell between 1991 and 1994 according to the American Psychological Association and based on scanner data from retail outlets. However, sales were on the rise again in the late 1990s and early 2000s. Condom sales in 2002 jumped 5 percent to $260.6 million. The top U.S. condom firms are Church and Dwight Co., Durex Consumer Products Inc., and Ansell Healthcare Inc.

Ansell International, the world's largest maker of examination gloves, closed a plant in Arizona and shifted much of its production to its Asian facilities. Ansell still maintained two U.S. medical glove facilities, as well as two factories in Malaysia and one in Thailand. Another multi-national, Smith & Nephew PLC, closed an exam glove plant in Ohio and concentrated on the more regulated surgical glove market.

Latex gloves, long used routinely during examinations and surgery, are used by virtually all health care personnel whenever they perform a task that requires contact with a patient. Besides physician's exams, the gloves also are widely used in dental procedures. Despite high expectations, however, neither the glove nor the condom market reached the enormous proportions projected in the 1980s. One official at a glove firm said that from 1986 to 1990, the demand for latex examination gloves may have doubled, but capacity quadrupled. Medical institutions helped to unrealistically raise apparent demand by placing duplicate orders with multiple distributors in an effort to ensure delivery. This situation led to a consolidation in the glove industry, with many start-up firms going out of business and larger, multi-national firms scaling back production.

Firms that produced examination gloves in the United States faced stiff competition from overseas companies, much of it economically driven. Many companies locate plants in Malaysia because of the country's readily available supply of latex. Also, the Malaysian government placed duties of between 5 to 10 percent on exported liquid latex, but none on exported finished gloves. Malaysia also offered economic incentives and cheaper labor than that found in the West. However, even glove firms in Malaysia were hurt when demand did not meet expectations. From 1987 to 1990, the government issued 300 permits for glove factories. By late 1988 only 90 had begun operating and by the end of 1990 only 30 plants remained.

Entering the mid-1990s, glove and condom makers began studying a new problem: the use of alternate materials for those allergic to latex. Reactions to latex range from relatively minor problems such as localized contact dermatitis, to much more severe symptoms such as systemic dermatitis and anaphylactic shock, which can be life threatening. From October 1988 to April 1992, a total of 1,036 severe reactions and 15 deaths related to latex allergies were reported to the U.S. Food and Drug Administration. Studies showed that employee groups most exposed to latex, such as operating room nurses, were more susceptible to latex allergies.

To counter these problems, glove and condom makers produced and tested more hypoallergenic latex products. By the mid-1990s, a few companies in North America began making gloves of thermoplastic elastomers, a material with the characteristics of rubber but processed like a plastic. In 1993 the FDA approved a polyurethane condom made by London International, and approved a polyurethane condom for women produced by Pharmacal of Wisconsin. It was not until new synthetic glove polymers were developed in the late 1990s that the latex glove market began to feel an impact. According to Frost and Sullivan Inc., although demand for examination gloves was expected to grow throughout 2006, latex gloves were projected to lose market share to synthetic gloves. Between 1999 and 2006, the market share held by synthetic gloves was expected to grow from 16 percent to 21 percent.

Single-Ply Rubber Roofing. This is another market expected to grow tremendously that never fulfilled predictions. The most common type of rubber roofing used in commercial building was developed in 1963 by DuPont. Two reasons this type of roofing evolved are the poor weather durability of other roofing materials and the energy crisis of the 1970s, which resulted in higher material costs for asphalt-based roofs. Roofers were looking for flexibility and superior weather and water resistance over long periods of time. Rubber roofing increased in popularity because it could accommodate movement, was functional at high and low temperatures, resisted environmental elements, and was not subject to the effects of ponded water.

From a small 1980 base of $70 million, rubber roofing demand in the United States quadrupled by 1985 to $287 million, and then doubled by 1991 to an estimated $608 million. Annual growth of 11.1 percent was expected, but the rubber roofing market staggered early in the 1990s, according to the Rubber Manufacturers Association (RMA), which represents rubber product firms. Single-ply roofing hit a peak in 1990 and stagnated for the next several years. However, demand for single-ply roofing began to pick up again in the early 2000s as new developments boosted its performance.

The rubber roofing market has seen much consolidation, with many firms entering the fray but later dropping out, especially after a 1983 price war that virtually wiped out profits for many companies. The two leading firms in the United States were Carlisle SynTec Systems, which pioneered the product's usage, and Firestone Building Products Company, which is owned by tire maker Bridgestone/Firestone Inc. Both of the leaders made major acquisitions in 1993. Carlisle bought the roofing business of Goodyear Tire & Rubber Company after making the product for Goodyear for two years under a private-label arrangement. Firestone purchased the roofing operations of Colonial Rubber Works Inc. As of 2003, Carlisle and Firestone remained the industry leader.

Rubber-Covered Rollers. Rubber covered rollers consist of three parts: a metal core, a rubber bonding adhesive applied to the core, and a rubber cover. The largest market for these products is the graphic arts industry, which uses rollers in printing presses to convey the ink onto the printing plate. Other applications are in paper-making, plastic film production, printing, steel fabricating, textile manufacturing, metal coating and leather processing. In the paper industry, the rollers are used to squeeze water out of newly formed paper web so it compresses to the correct thickness. Steel mills use rollers in many strip processing lines as the rubber coverings reduce noise, provide traction, give a wringing action between processes, and protect the metal from corrosion. Growth of rubber-covered rollers has been gradual since 1980.

Sheet Rubber. This rubber product is made using a machine called a calender. A strip of material fed into one side of the machine is flattened and emerges as a rubber sheet, which is used in various industrial applications like packing and lining. The process makes sheet goods in various widths and thicknesses. U.S. consumption of sheet rubber goods has varied since 1980.

Sponge Rubber Products. Sponge rubber goods are classified as either open-cell or closed-cell. Open-cell sponge rubber derives its name from natural occurring sponge. G.R. Sprague of Colonial Rubber Works defined open-cell sponge rubber in the Vanderbilt Rubber Handbook as "an elastic mass made porous by interconnecting cells." Typical open-cell products include carpet under-lay and mattress and upholstery filling. Closed-cell sponge is different because the cells do not connect. Applications of this type of sponge rubber include insulation, automotive weather-stripping, architectural gaskets, swimsuit material, pipe insulation, and mattress and upholstery filling.

The value of sponge rubber shipments fluctuated in the late 1990s, falling from $1.18 billion in 1997 to $1.12 billion in 1998, before rebounding to $1.22 billion in 1999. Shipments climbed to $1.23 billion in 2000, but then declined to $1.1 billion in 2001.

Hard Rubber Products. Rubber products usually can stretch to at least twice their dimensions when stress is applied, and then return to their original form once the stress is removed. Hard rubber products do not follow this guideline, although the goods retain many of the qualities of rubber. Typical hard rubber products include steering wheels, caster wheels, electrical insulation, battery boxes, and bowling balls.

Rubberized Fabrics. The making of rubberized fabric is one of the oldest forms of rubber manufacturing. When latex was discovered, it was spread on a fabric and placed in the sun. When the water evaporated, the resulting product was a type of coated material. Historically, makers of rubberized fabrics considered their processes an art and kept such production methods secret. This created an environment in which only a few manufacturers made highly specialized products. The technology for making coated fabrics evolved from an art into a science, and the information spread through the industry so that application has grown tremendously. Polyurethane coatings simulate leather, especially in the apparel, shoe, and upholstery industries. Rubber fabric products include inflatable safety equipment such as life vests, lifeboats, and escape slides carried on aircraft.

Industry Leaders

Leading companies in the industry include Plumley Companies, Inc., Gates Rubber Co., and Foamex International, Inc. Plumley, a division of the Dana Corporation, is a manufacturer of molded products, including hoses, tubing, and extrusions for home and industry. (Dana had overall sales of $7.9 billion in 2003.) Gates Rubber Co. (a subsidiary of U.K.-based Tomkins PLC, which posted sales of $4.7 billion in 2004) produces belts and hoses for automotive and other industrial uses, batteries, formed fiber products, and other automobile accessories. Foamex manufactures flexible polyurethane foam and foam products. Its 2003 sales totaled $1.3 billion.

Workforce

In 2000, the industry employed almost 52,000 people. Production workers earned an average hourly wage of $12.38 and comprised 75 percent of the workforce. Over 1,000 establishments were doing business in this industry at the turn of the twenty-first century.

Further Reading

"Consumers Want Pleasure and Protection." Chain Drug Review, 17 February 2003.

"Latex Exam Glove Market to Grow." European Rubber Journal, June 2000.

U.S. Census Bureau. "Statistics for Industry Groups and Industries: 2000." February 2002. Available from http://www.census.gov/prod/2002pubs/m00as-1.pdf .

——. "Value of Shipments for Product Classes: 2001 and Earlier Years." December 2002. Available from http://www.census.gov/prod/2003pubs/m01as-2.pdf .



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