The Recession Hits Plastic Injection Molders

by Jenny Knodell, IQS Editor



Injection molded plastics
are perhaps the most common products used in every aspect of both the industrial and commercial sectors. And why wouldn’t they be? Molded plastic is re-usable, long lasting, durable, temperature resistant, easy to manufacture and most of all—very cheap. From the 50s on, plastic has quickly replaced materials like glass and metal everywhere you look. Injection molded plastic products are everywhere—they serve as packaging, automotive parts, computer casings, Tupperware, and on and on. Since the scope of molded plastic is so wide, plastic manufacturers supply almost every single industry out there. With applications so broad and demand so high, you’d think the recession wouldn’t affect the plastics industry. Unfortunately, this is not so. Some major changes have been going on within plastic manufacturing the last year or so, and they are prompted by these hard economic times.

Across the US and the world, the plastic molding industry is full of small, independent companies that have found their niches by specializing in products for certain industries, like medical or automotive manufacturing. For decades, these small businesses thrived in their own markets, avoiding mergers and major acquisitions. However, there is a problem: those plastic molding companies that rely on a single industry become dependent upon it. When the automotive manufacturers began struggling, so did injection molders that made vehicle components and parts. In fact, a Tier 1 supplier for Toyota just closed its doors. Before the recalls, this successful American plastic manufacturer saw no end in site. But within months of the scandal, they went under because of their dependency on Toyota.

Currently, there are too many small plastic suppliers, several of which are struggling to stay afloat. Instead of dying off, many companies are now merging together—an industry rearrangement prompted by the recession. Last year, over 300 acquisitions were made within the plastics industry worldwide. Many hate to see the end to so many independent businesses, but most agree that it’s necessary. Manufacturers in the US are combining with businesses in China, Italy and Germany, among many others.

These mergers, which are taking place between local competitors as well as international corporations, have a number of upsides. They are helping companies gain more customers, who formally belonged to their competitors. Expanding to foreign geographies has also opened up previously untapped markets. The acquisitions are also helping smaller, struggling manufacturers stay in business, a move which has secured thousands of American jobs. Many plastics companies are merging with other manufacturers that supply different industries, broadening their markets and relieving their dependency within a single industry. This change within the plastics industry is indicative of US manufacturing as a whole—even with the struggling economy, savvy companies are still finding ways to stay alive.

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