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Plastics processors need confidence in pricing decisions

Plastics processors need confidence in pricing decisionsBoost ProfitsCasey Brown, presidnet of Boost Profit, says processors need to properly value their products in setting prices.Plastics processors should not be afraid to raise prices even when competition for business makes them think they do not have a choice, a pricing expert believes.Even just a 1 percent increase can have a significant impact on a processor's bottom line, said Casey Brown, a self-professed pricing geek and president of Boost Profits, a Columbus, Ohio-based consulting firm."Accepting mediocre pay for excellent work is unjust," she said during a presentation at the recent Benchmarking & Best Practices Conference organized by the Manufacturers Association for Plastics Processors in Indianapolis.Plastics processors would serve themselves well to pay more attention to their pricing, she said. But pricing does not always receive the attention it deserves compared to other considerations such as efficiency, cost management and operations."Give pricing just a little more of your attention and it will revolutionize your business," she said.A company with a 10 percent profit margin can increase its profit margin by 10 percent by instituting a 1 percent price increase, she said."Revenue is for vanity, profit is for sanity. You can write that one down," she told the crowd.But some firms are afraid to price their products appropriately, fearing the move will cost them business.While customers will threaten to move business elsewhere if there are price increases, Brown countered that what comes out of their mouth is not necessarily reality. Customers also will consider other factors when deciding where to buy.This can be true for companies that are risk adverse and critically depend on processors to deliver products on time and as promised. Buyers' jobs could be on the line if they make a mistake that disrupts their own operations. So while they might indicate price is the key consideration, it not always is, Brown said."Pricing is a matter of confidence," she said. "This is not a math exercise. This is a gut exercise.""You have a strong hand to play. Do you solve problems for your customers? Do you sell excellent products? Do you wrap excellence around it in the form of your sales and support processes? Do you believe in what you sell? If you do, I invite you to consider you have a much stronger hand to play. That power dynamic is much closer than often believed."If a customer tells a plastics processor their price is too expensive, the actual message is that they do not yet trust them, Brown said.The pricing consultant said plastic processors should be ready to walk away from certain contracts. "Don't price to keep your worst customers. Let them go," she said."This is more than just a mindset shift. There are real dollars at stake here," she said. "Rather than make a fear-based decision, I invite you to make a data-based decision.""Do not be tempted to underprice what is valuable to customers just because you are masterful in making it," Brown said.* source :https://www.plasticsnews.com/news/plastics-processors-told-have-confidence-while-making-pricing-decisions

editor 2023-11-05

Auto suppliers want more insight into EV plans, study shows

The annual automaker-supplier relations survey saw improvements for Stellantis and Nissan but a big drop for FordSuppliers, already juggling higher costs and choppy vehicle assembly schedules, want more insight into automakers' long-term electrification plans so they can create efficient strategies of their own, according to Plante Moran's survey of automaker-supplier relationships."During COVID, a war room approach was adopted to quickly resolve critical issues," said Dave Andrea, principal in Plante Moran's automotive and mobility consulting practice. "That approach is what auto manufacturers need to maintain during the transition to EV technologies. The industry needs that level of collaboration, even without the pressure of a crisis."The 2023 North American Automotive OEM-Supplier Working Relations Index Study, which surveyed 715 salespeople from 459 Tier 1 suppliers, tracked supplier sentiment about six of the largest automakers in North America: Ford, General Motors, Honda, Nissan, Stellantis and Toyota.The annual survey yields a ranking of those automakers based on a point system of multiple issues concerning how their suppliers perceive business dealings with their purchasing departments. Among them: whether automaker purchasing officials communicate in a timely fashion and whether suppliers feel they are given an opportunity to make a profit.Toyota again finished as the customer with the best working relationship with its suppliers, though its score dipped slightly from a year earlier. Nissan, meanwhile, overtook Ford as No. 4 on the list, as Ford's score fell by 23 points from a year earlier, the biggest decline of any automaker.The drop is explained by what suppliers called confusion over what Ford's long-term electrification strategy means for them, Andrea said. In 2022, the automaker split its EV business, called Ford Model e, from its traditional gasoline-powered vehicle business, now called Ford Blue."When they went to the Model e and Ford Blue, suppliers, rightly or wrongly, were confused by how they should interpret that," Andrea told Automotive News. "That means if they weren't pegged for Model e business, they were wondering if that meant they're being completely dis-sourced."EV partsClarity around electrification strategies and where automakers plan to source EV components is crucial to maintaining good relationships with suppliers, Andrea said.GM, for example, made significant progress during the past year by communicating better with suppliers about its long-term strategy with its Ultium battery architecture and EV manufacturing footprint. GM ranked first among the six automakers as it relates to communication surrounding long-term plans, Andrea said."Even though there's still tremendous uncertainty, there is certainly more clarity there now," he said.Stellantis made the biggest year-over-year gain, with a score 17 points higher than its performance in the 2022 study. While Stellantis still ranks last in the group by a significant margin, its improvement was largely driven by the company's efforts to operate with more transparency, Andrea said.He said Marlo Vitous, who took over as the company's North American purchasing chief in May 2022, has made it her goal to "get out and communicate and to be more accessible" to the supply base."The thing we'll be watching is if they can put together two years of improvement back-to-back, to try to get more momentum on communication," Andrea said.Financial pressuresThe study captures North American automaker-supplier relations as parts makers navigate financial pressures stemming from inflation, unstable automaker production schedules, the microchip shortage and rising interest rates.Those pressures, which began in late 2019 with the onset of COVID-19 and the UAW's strike at GM, have tested relations between suppliers and their customers.Suppliers said there needs to be greater and more timely communication and transparency on short-term supply chain disruptions and on any changes in forecasting, Plante Moran reported. And it found that many parts companies are frustrated by what they see as a disconnect between what automakers' management says and what their front-line purchasers ultimately do.According to the suppliers surveyed, relationships would improve if automakers made it a priority to ensure their purchasing, engineering, manufacturing and quality teams are all aligned — even when electrification and parts shortages make things more difficult, Andrea said."We always think of purchasing as an external conduit to the world, but they're an internal conduit, too," he said, "in terms of getting the right people in place to solve these issues."source : https://www.plasticsnews.com/news/plante-moran-study-auto-suppliers-dark-ev-plansedit : handler

Editor 2023-07-12

LS Mtron opens new facilities, US headquarters

LS Mtron opens new facilities, US headquartersLS Mtron Injection Molding Machine USA has expanded in several locations recently, opening two new facilities and moving its headquarters near Atlanta from Peachtree Corners, Ga., to Duluth.The company opened a parts and service center in San Diego and a large-ton machine and mold testing and tech center inside MVP Plastics Inc.'s new, 50,000-square-foot plant in Brownsville, Texas."Having the ability to run trials for customers on large automotive molds on our LS machines is a big plus for us," Peter Gardner, business director at LS Mtron Injection Molding Machine USA, said in a June 13 news release. "We are pleased to be working together with MVP Plastics in this new venture."The new sites join another LS Mtron tech center in Wood Dale, Ill., near Chicago, and a sales and service center in Querétaro, Mexico."We are growing rapidly in North America and LS Mtron is investing heavily to support that growth," said Gardner, who joined LS Mtron in 2021 when it bought the plastics machinery division of Daiichi Jitsugyo America. Gardner had been vice president of sales and general manager for DJA, which has sold LS Mtron presses in the United States since 2018.The new, 16,000-square-foot U.S. headquarters provides more office space and warehouse room for spare parts inventory, as well as a bigger demonstration area for injection presses. LS Mtron considers parts availability and service response time keys to doing business in North America."We have doubled the number of direct service technicians and the size of our spare parts stock inventory in the U.S. in just the past two years," said D.S. Jo, North American operations director. "LS is making this proactive investment to support revitalized American manufacturing."The company's parent is LS Mtron Co. Ltd. of Anyang, South Korea, that country's largest injection molding machine maker. The U.S. operation was founded by South Korean tech giant LG Corp., one of the world's largest plastic molders.source : https://www.plasticsnews.com/news/ls-mtron-opens-new-facilities-us-headquartersedit : handler

Editor 2022-06-24

In marketing shift, Wittmann dropping Battenfeld brand

Nearly 14 years after two Austrian machinery companies combined forces, Wittmann Group is dropping the Battenfeld brand name from its injection molding machinery.The decision does not include any organizational or company name change, only the brand strategy.Wittmann Kunststoffgeräte GmbH bought Battenfeld Kunststoffmaschinen GmbH in April 2008, and since then the company has used two brands: Wittmann for auxiliary equipment including robots, and Wittmann Battenfeld for injection molding machines."In recent years, though, the group's competitive edge of being able to offer complete solutions from a single source has gained substantially in significance," the Kottingbrunn-based company said in a Dec. 23 news release."In due consideration of this development, the one-stop-shop advantage is now to be given special emphasis by a uniform brand designation and color scheme for the entire product range. This is why the Wittmann Group has decided to use the Wittmann logo for all of its advertising activities and product lines in future."The change will start Jan. 1, 2022, and will be completed by the K 2022 trade show in October, the company said.Battenfeld has been a well-known plastics machinery brand for decades. The company traces its origins to 1876, when it was founded as a metalworking shop. It added injection molding equipment in 1948, and started to expand globally after opening a factory in Meinerzhagen, Germany, in 1954. Battenfeld added a second plant, in Kottingbrunn, in 1962.Battenfeld made headlines in the 1990s with its large machines, including some with clamping forces of more than 8,000 metric tons. But Battenfeld ran into financial problems in the early 2000s and closed the Meinerzhagen factory — which made those ultra-large presses — in 2005.Industrial conglomerate SMS GmbH sold Battenfeld to German private equity firm Adcuram Industriekapital AG in 2006, but Adcuram did not keep the business for long. Family-owned Wittmann Group bought Battenfeld in 2008. At the time, Wittmann specialized in robots, auxiliary equipment and molds.Just prior to the Fakuma 2021 trade show, CEO Michael Wittmann said the company was on track to record between 360 million ($417 million) and 380 million euros ($440 million) in sales this year, up 21 percent from 2020. The company has 2,240 employees.source : In marketing shift, Wittmann dropping Battenfeld brand | Plastics Newsedit : handler

editor 2022-02-21

Sustainability continues as a focus for resin makers, consumers

Sustainability continues as a focus for resin makers, consumersHouston — Sustainability remains a major focus for materials makers, consumer products companies and many others in the plastics value chain.Four industry executives covered topics related to sustainability on a panel at Global Plastics Summit 2019, held June 5 in Houston.Resin maker Nova Chemicals of Calgary, Alberta, is working on resin designs to incorporate post-use plastics, according to Greg DeKunder, polyethylene marketing vice president for the company. Nova is also investing in recycling operations in Indonesia, which is in a part of the world where a large amount of ocean plastics originates.Allison Lin has seen the impact of sustainability at previous career stops with consumer giants Coca-Cola Co., Procter & Gamble Co. and Starbucks. She's now tackling that topic for plastics molder and processor Westfall Technik Inc. as vice president of procurement and sustainability."A lot of companies are interested in using recycled materials," Lin said. "But we as an industry need to get recycled materials to where end markets can use them."Lin will have many chances to spread sustainable concepts, since Las Vegas-based Westfall has made 14 acquisitions in less than two years.Most products made by Mars Petcare are already recyclable, according to global packaging lead Barnaby Wallace. The McLean, Va.-based firm has a goal of having all of its products 100 percent recycled, reused and renewable by 2025.According to Keith Christman, plastics managing director for the American Chemistry Council, consumers and environmentalists both can benefit from smart use of plastics since plastics have 3.8 times less environmental impact than alternative materials.But at the same time, there's a disconnect between consumer wishes and availability of sustainable products, said Burgess Davis, senior director of corporate strategy for food and beverage giant PepsiCo Inc. of Purchase, N.Y."The consumer is aware of plastic waste as an issue and is shocked by [negative] images of plastic, but they're not yet in a place where they can change their behavior," she said. "The tipping point will be when we have scalable alternative packaging that's readily available to most consumers."Both resin makers and product designers need to look at "the full cost of the package," Nova's DeKunder added, as well as taking a broader look at the world "to see what forces are impacting their business."In spite of these challenges, makers of consumer products and of plastics materials "don't want to stop innovating," Wallace said. "There are always going to be performance demands for new applications, so we need better solutions for complex plastics."Christman of Washington-based ACC cited increased efforts in plastics to fuel technology, as well as increased collection and additional mechanical recycling and sorting as positive signs for the industry.source : https://www.plasticsnews.com/news/sustainability-continues-focus-resin-makers-consumersedit : handler

editor 2021-11-24

LS Mtron’s acquisition of DJA PMD

LS Mtron’s acquisition of DJA PMD,A new opportunity to expand the base in the US market and leap forward!The recent acquisition of DJA PMD(Plastic Machinery Division) by LS Mtron Injection Molding Machine Division(Hereafter “LS Mtron”) is drawing attention. In response to the continued sales increase in the U.S. and the trend of expanding global investment amid the economic recovery, the company held the signing ceremony for the first time with DJA during the NPE2018(one of the three major global plastics exhibitions), and since their first meeting, they have kept relationship as a partner.Through this signing ceremony, LS Mtron expects that it will be able to achieve annual sales of KRW 50 billion to KRW 100 billion in North America. ■ They acquire DJA PMD in response to expanding global investment from the recovery of the US economyAt 8:00 a.m.(KST) on April 14(Wednesday), LS Mtron Division Leader Chan-Sung Park, LS Mtron Sales Manager Jae-Nam Hyun, DJA’s MR. Ted Haykudo and DJA’s Mr. Peter Gardner joined the online signing ceremony to acquire DJA’s PMD(Plastic Machinery Division, hereinafter “DJA”) by LS Mtron Injection Molding Machine Division.LS Mtron's Injection Molding Machine Division said they held this signing ceremony to acquire DJA’s Daiichi Jitsugyo(America), Inc. PMD(Plastic Machinery Division), which was the U.S distributor, in order to cope with the continued sales increase in the US market and the expanding global investment amid the economic recovery in the U.S.DJA met LS Mtron for the first time during the NPE2018, and since then, it has shown steady growth of sales in North America as a partner.In the future, LS Mtron's U.S. sales division will be divided into the Atlanta division where the exiting U.S. Corporation is located, and the Chicago division that has been acquired this time. Therefore, it is expected not only to increase the sales of existing Korean clients who have entered the U.S., but also to move a step closer to local clients in the traditional rust belt area of the U.S. ■ Expected to achieve annual sales of 100 billion won in North AmericaAt the signing ceremony, an official at LS Mtron said “We have been conducting business in the US until now, focusing on medium- and large-sized hydraulic injection molding machines and Korean clients. But through this signing ceremony, we have laid a solid business foundation to extending its business into electric molding machines and local clients, and this is an opportunity to take a leap forward and achieve infinite growth.” Also, he said “We will make hard effort to achieve remarkable results by investing heavily in the US business, so please watch us with lots of attention.” “With this acquisition, we hope to achieve 100 billion won of annual sales in North America, whose sales is around 50 billion won, up 100% in the future”, he added.Meanwhile, according to expert industry market research IBIS World, the market size of the US plastics manufacturing industry in 2020 is estimated at 104.3 billion dollars. The plastics manufacturing industry, which has recorded an average annual growth rate of 0.9% for five years since 2015, is expected to record an annual growth rate of 1.4% by 2023, with the rise of industrial products and manufactured products.In particular, experts predict that the automotive plastics market will grow to about $68.58 billion by 2025 because the use of plastics in parts is on the rise due to the lightweight trend of the automobile industry, the introduction of new technologies, and design flexibility. In addition, after the pandemic of COVID-19, there is the rapidly growing demand for general-purpose plastics(medical plastic films, acrylic plates for screens, etc.) as well as engineering plastics.EDITER : LEE MYEONG KYU

editor 2021-04-21

Magna, LG forming joint venture to supply EVs

Magna, LG forming joint venture to supply EVsCanadian supplier Magna International Inc. and South Korea’s LG Electronics are forming a joint venture that the companies say will better meet increasing demand for electric vehicle components. LG Magna e-Powertrain will focus on manufacturing e-motors, inverters and on-board chargers in South Korea, China and the U.S. Financial terms of the deal were not released, although Reuters reported that LG on Wednesday in South Korea said it agreed to set up a $1 billion joint venture with Magna. The new LG Magna e-Powertrain will immediately supply General Motors and Jaguar Land Rover, with an eye to land more automakers. Incoming Magna International CEO Swamy Kotagiri, who replaces the retiring Don Walker on Jan. 1, told Automotive News Canada in a phone interview that the supplier is always on the hunt for “deliberate, scaleable, modular building blocks” in the EV supply chain. “Two of the most important blocks are the inverters and e-motors,” Kotagiri said. LG’s e-motor and inverter, already being used in the Chevy Bolt, mesh with Magna’s plan to bolster its position in the EV supply chain. “We’ve always been focused on getting power to the wheels, whether it be the transmission or the driveline,” Kotagiri said. “From our viewpoint, electrification is a sustainable trend going forward. There might be a little difference of opinion on how fast or how slow it is coming.” Kotagiri believes 15 percent of vehicles sold by 2030 will be fully electric. While he said “it’s very difficult to accurately guess the take rates and the specific time” he believes “electrification is a trend that is going to stay.” “The market for e-motors, inverters and electric drive systems is expected to have significant growth between now and 2030, and the JV will target this fast-growing global market with a world-class portfolio,” the companies said in a joint statement. The LG partnership will help accelerate Magna’s time to market and scale of manufacturing for electrification components, while the supplier will bring software and systems integration to the joint venture. “We believe that the combination of our in-house prowess and the experience and extensive history of Magna will transform the EV powertrain space faster than if we proceed alone,” Kim Jin-yong, president of the LG Electronics Vehicle Component Solutions Company, said in the statement. Kotagiri said the deal puts the two companies “at the forefront of electrification.” The joint venture will include more than 1,000 employees located at LG locations in the U.S., South Korea and China. Kotagiri said the vast majority of those workers are already employed by LG and Magna and will work out of existing facilities. The transaction is expected to close in July 2021, subject to a number of conditions including obtaining LG shareholder approval and all necessary regulatory approvals.source : https://www.plasticsnews.com/news/magna-lg-forming-joint-venture-supply-evsedit : plastics handler http://www.ihandler.co.kr

Editor 2021-01-22

Georgia battery plant project awaits verdict

Georgia battery plant project awaits verdictA supplier with one of the biggest industrial projects now underway in the U.S. auto industry — a $2.6 billion electric vehicle battery plant in north Georgia — expects a ruling from federal trade officials next week that could shut down construction.The legal question could create dire complications for two closely watched vehicle programs: Ford Motor Co.'s planned F-150 electric pickup and Volkswagen's upcoming global family of EVs.The nub of the situation is whether the Georgia battery supplier, SK Innovation of South Korea, is using stolen intellectual property for the batteries it plans to make — a claim SK denies.SK, a global producer of electronics, petrochemicals, energy and batteries, has been embroiled since last year in litigation with Korean competitor LG Chem, which claims SK's batteries use proprietary LG Chem technology, obtained when SK hired away about 100 LG Chem employees.The feud is now in the hands of the U.S. International Trade Commission, which is due to issue a final ruling Oct. 26.SK officials have stated that the plant, under construction and preparing to begin hiring employees in Commerce, Ga., about 70 miles northeast of Atlanta, will go forward regardless of the ruling.Sources familiar with SK's situation say the company has a limited number of options if LG Chem's allegations are upheld.It can seek a special review by the Office of the U.S. Trade Representative on grounds that abandoning the Georgia project would cause undue hardship for the U.S. auto industry. That avenue ultimately would require the involvement of the U.S. president, just as a contentious election is taking place.Another option would be for SK and LG Chem to negotiate a settlement — a common outcome in high-stakes legal impasses such as this. There has been speculation in the Korean press that such negotiations are already in progress.Meanwhile, state officials have warned that the worst-case scenario of shutting down the project will hurt Georgia's economy. The state is providing $300 million in incentives to support the battery plant.The issue illustrates some new auto industry realities: The competition in EVs requires vast amounts of industrial investment to produce batteries. And despite the nature of EV batteries as seeming commodities, they are highly engineered components that cannot easily be re-sourced or redesigned.Both the individual battery cells and battery systems use plastics extensively for separation film, connectors and structures.This year, Ford weighed in on the SK-LG Chem standoff with a letter through its attorneys to the International Trade Commission. Ford is counting on the SK batteries for its electric F-150, and no other "EV battery supplier is able to provide EV battery cells that satisfy Ford's technical or U.S. supply requirements for the fully electric F-150," said the letter submitted by law firm Duane Morris. "EV batteries cannot simply be swapped like batteries in a flashlight."Meanwhile, SK has been rapidly adding manufacturing capacity around the world to capitalize on the industry's growing plans for EVs. It has expanded its plans for the Georgia site, upping its investment by 30 percent to $2.6 billion and increasing the number of workers it expects to hire there from 2,000 to 2,600.source : https://www.plasticsnews.com/news/georgia-battery-plant-project-awaits-verdict

Editor 2020-10-23