This industry covers establishments primarily engaged in manufacturing plastics foam products.
326150 (Urethane and Other Foam Product (except Polystyrene) Manufacturing)
326140 (Polystyrene Foam Product Manufacturing)
Total industry shipments in the polystyrene foam products market segment grew from $5.96 billion in 1999 to $6.49 billion in 2000. The cost of materials over the same time period increased from $2.89 billion to $3.27 billion. In the urethane and other foam products sector, product shipments fell from $7.55 billion in 1999 to $7.53 billion to 2000, while material costs remained steady at $4.26 billion.
In 1996, approximately 1,300 establishments were engaged in the production of plastic foam products. These businesses employed approximately 49 employees per establishment, of which 34 were production workers. The average value added per production worker was $72,991, a small figure compared to an average of $93,930 calculated for the average of all U.S. manufacturing industries.
The largest number of plastic foam products establishments were located in the East North Central region, followed by the middle Atlantic region and the Pacific region. However, when ranked by the number of establishments per state, California was first with 171, followed by Texas with 83, North Carolina with 70, Ohio with 62, Pennsylvania with 60, and Michigan with 59. It was estimated that the largest five companies producing plastic foam products accounted for approximately $2.6 billion, or more than 59 percent of the entire industry's sales.
Plastics foam, sometimes called expandable plastics, are versatile materials that were first used in the post-World War II plastics boom. Plastic foam products are used both as original and replacement materials in industries. Foam products emerge out of a unique chemical process. Foamed plastic is an expanded material with a distinct cellular structure that can be either rigid or flexible. Rigid foam consists of hollow spheres attached together, while flexible foam has its cells connected, thus giving it a spongy structure. Polystyrene and polyurethane are used for rigid foams and vinyls and cellulose acetate. Linear polyurethanes have been traditionally used in flexible foams. By 1969, flexible urethane dominated the market with polystyrene running second, rigid urethane third, and polyvinyl chloride fourth.
Following World War II, plastics foam consumption in the United States grew tremendously, increasing more than ten-fold from 1955 to 1970. By 1967, total consumption of plastics foam products rose to 700.0 million pounds, or $60.0 million; by 1970, output weight was 1.0 billion pounds. It took only five years for this figure to double. More than 700 companies in the 1970s were in some way involved in the production of plastics foam, including most major chemical companies, rubber and tire companies, textile mills, and drug companies.
By the end of the 1960s, the threat of oversupply prompted the industry to step up research and development to improve materials and develop new market outlets, notably tires, sporting goods, advanced military equipment, and highway safety barriers. Rigid urethane and polystyrene were used for industrial purposes, such as industrial walls and cold storage insulation. The foams came in many forms—slabs, logs, sheets, rods, tubes, and particles.
In general, plastics are manufactured as follows: plastic materials (monomers) are chemically altered to produce more complex materials called polymers, which are then mixed with certain materials to impart characteristics such as durability, flexibility, and chemical resistance. Subsequent manufacturing processes produce final products, such as the rigid and flexible foam used in consumer durable goods, buildings, and refrigerated transport. Foam production processes involve a variety of methods, and the output takes the form of slabs, blocks, boards, sheets, molded shapes, and extruded insulation. Foam can also be produced onsite for building insulation and cushioning applications. Extrusion and injection molding are used to produce most grades of foam. More than half of foamed plastic is polyurethane, and the rest consists of expandable polystyrene and vinyl, phenolic, epoxy, urea, and silicone.
The post-World War II boom in plastics foam products was intertwined with the growth in general plastics manufacturing, growth stemming from a burgeoning U.S. consumer base and from the substitution of plastics for materials such as copper, aluminum, and steel. Plastic products seriously challenged metals and alloys in the aerospace, transportation, electricity, and engineering industries. In general, the plastics industry is the single most important "downstream" industry in the petrochemicals value-added chain. Plastics are produced by various chemical processes that allow end-products to be formed through heating, milling, or extrusion. Plastics soften but do not melt when heated, thereby allowing them to change shape without losing cohesion. Before the 1930s, industrial products were largely based on coal as the basic chemical feed stock. The surge in production and consumption of plastic was directly related to the availability of petroleum, which is plastic's main chemical feedstock. The petroleum and plastics industries are closely linked; petrochemicals provide the basis for the mass production of plastics and, conversely, plastics provide petroleum with their main downstream market.
Total plastics foam production tripled from 1970 to 1980. Increased production was fueled during this period by skyrocketing demand for consumer goods such as furniture cushioning, mattresses, bedding, and other items that use mostly urethane foams. Rigid foam found growing use in buildings, refrigerated transports, household refrigerators and freezers, dehumidifiers, dishwashers, packaging, and marine salvage.
The main concern of industry leaders is, of course, market growth and expansion. Of particular interest are consumer durable goods, construction, and health care, which make up a large portion of demand for the industry's products. The early 1990s upturn in consumer spending, especially for durable goods such as appliances (which use large quantities of rigid foam and adhesives), buoyed the market for plastic foams; construction, another rigid foam user, underwent similar growth.
In the mid-1990s, the industry manufactured products estimated to valued at $10.1 million dollars. This figure remained in line with a generally upward production trend in the industry since 1987. Total value of shipments increased by over 31 percent from 1987 to 1993, higher than the increase in general plastic production, which grew at a 17 percent rate over the same period. By 1996, the value reached $12.1 billion.
According to a study conducted by Philip Townshend Associates, the largest interior use for plastics is in automotive paneling, which used over 1.1 billion pounds of plastics material in the 55 million vehicles produced worldwide in the late 1990s. Polyurethane accounted for 90 percent of this market, with polypropylene and polyethylene accounting for 6 percent of consumption and polyvinyl chloride accounting for 4 percent of the market. As the exteriors of cars became more similar, manufacturers sought to express a car's individuality through their instrument panels, which challenged the plastics foam industry to provide ever-stronger, ever-lighter materials that could be molded to their specifications. One solution the industry developed was single-material panels, which recycled easier than the traditional blended-composition panels.
Between 1999 and 2000, industry shipments of polystyrene foam products grew from $5.96 billion to $6.49 billion, while industry shipments of urethane and other foam products fell from $7.55 billion to $7.53 billion to 2000.
Dow Chemical Co. of Midland, Michigan, led the industry in overall sales with $18.4 billion in 1998 sales, while Tennaco Inc. of Greenwich, Connecticut, generated $7.6 billion that year. It should be noted, however, that these revenue totals also reflect other industries in which Dow and Tennaco are active besides the plastics foam industry. Of the companies that focused primarily on this industry, Sealed Air Corp. of Saddle Brook, New Jersey, led the way with 1998 sales of $2.5 billion. Boca Raton-based W. R. Grace and Co. garnered $1.5 billion in 1998 sales. Courtaulds United States Inc. of Purchase, New York, ended its fiscal year on March 31, 1999 with $1.1 billion in sales.
In 1995, the major occupational categories for the plastics products industry (these data relate to the three-digit Industry Group 308 for miscellaneous plastics products rather than the specific four-digit SIC for plastics foam products) were: plastic molding machine operators, who made up 17.8 percent of total employment; assemblers and fabricators, who made up 8.6 percent; and packers and packagers, who comprised 4.8 percent. Approximately 20 percent of industry employees were engaged in some type of managerial or supervisory function or clerical, transportation, and accounting/financial tasks. The remaining employees were engaged in production activity.
The U.S. Bureau of Labor Statistics has forecast that all these occupational categories will grow by the year 2005, reflecting the growth in demand for this industry's products. The occupation making up the bulk of the industry's employment, plastic molding machine operators, should grow 29.5 percent to the year 2005, trailing 12 other industry categories in projected growth.
The industry job categories with the largest projected growth through 2005 were largely nonproduction jobs: sales and related workers, which are projected to grow by 69 percent; industrial production managers, 64.2 percent; industrial machinery mechanics, 50.9 percent; and tool and die makers, 44.9 percent. Categories uniformly forecast to grow by 35.8 percent were: blue-collar worker supervisors; hand packers and packagers; inspectors, testers and graders; freight, stock, and material movers; and extruding and forming machine operators.
Over the period covering 1997 to 2000, total employment in the plastics products industry overall rose from 64,504 to 72,508, while production worker employment grew from 51,523 to 58,496 over the same time period.
Concerning the industry's income distribution, while average hourly earnings of production workers in plastic products production rose from $3.27 in 1972 to $8.43 in 1987, the purchasing power of these wages actually declined by 10 percent. General payroll per employee, adjusted for inflation, fell from an average of $18,215 to $17,903 during that time. From 1987 to 1996, average hourly earnings rose by about 28 percent to $11.62. From 1972 to 1987, in terms of value added per production worker, wages per hour rose about two and one half times, while the value added per hour by these production workers rose by over three times, a shift in income distribution away from wages and toward profits.
The plastics industry faces challenges due to environmental damage caused by its use of certain processes and chemicals. The industry must comply with federal and worldwide environmental rules aimed at banning use of chlorofluorocarbons (CFCs), which are said to deplete the ozone layer. The rules have led to a competitive race to develop replacements for CFCs. In addition, political pressure is forcing companies to develop recycling processes; as of the early 1990s, only a small portion of plastics in general were recyclable.
The industry has devoted significant resources to developing alternatives to CFCs. It has been very successful in the flexible foam sector, but rigid foam makers have made less progress. For rigid foams, some firms are developing new formulations that use hydrochlorofluorocarbons (HCFCs), which have a lower ozone depletion potential than CFCs while retaining some of CFCs' desirable properties. Flexible foams are also being reformulated. New machinery has been developed that is tailored to the low boiling point agents that are gradually replacing CFCs.
Recycling efforts are also underway. For example, construction board has been made from rigid foam scrap and carpet pad has been produced from auto seating scrap. Though most of the focus in the recycling movement has been on bottles and foamed polystyrene containers, the push is on for polyurethane recycling. The plastics foam products industry and federal, state, and local governments are evaluating the merits of various recycling policies.
Finally, in addition to their recycling efforts, firms in the industry hope to improve the aesthetic of urethane foams, particularly in automobiles. For example, technology is being developed that would reduce foam scorching at high temperatures. And, in another effort, some are attempting to eliminate fogging that occurs on the insides of car windows when sunlight heats up plastics in passenger compartments.
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"Instrument Panels Challenge Materials Suppliers, Molders." Molding Systems, March 1998.
United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .