Two steps forward and one back. It feels like we’ve been in this economic tango year after year after year, reading market signals with cautious optimism. It’s frustrating.
So, today I share with you something irrefutably concrete: Our investments to add significant vinyl compounding capacity have just passed the project midpoint, on-track to come online in the second half of 2017.
Our view on the economy and demand for vinyl is positive. Building & construction is picking up steam. With parallels to construction, wire & cable markets are also strong. The automotive sector continues to be strong, although inventory is building and may soon impact demand.
Validating our capacity investment move, we’ve recently experienced a two-pronged spike – new customers, and existing customers’ business growth.
In reality, evaluation and planning for this significant expansion was underway many months ago. We created intricate optimization models to identify the right priorities, geographies and capabilities – as well as how much capacity is needed.
Side note: The time and patience required for major capital investments reminds us why publicly traded industrial companies wrestle with shareholders’ quarterly earnings expectation horizon. As a privately held, family-owned company, we’re always looking to reinvest in the business.
We’re also enhancing existing production lines, modifying equipment to support new requirements and more sophisticated products.
Since we started compounding vinyl in 1949, we’ve learned a lot about what matters in compounds. We use our application development lab to test new capabilities, adjust our processes, and better understand how our process impacts our customers’ process.
Challenges Elsewhere, in the Big Picture
Adding and enhancing capacity is one thing; recruiting the talent to operate our plants is another issue entirely.
We do as much as possible to automate our lines and invest heavily in developing expertise – but hear about one challenge echoed across all sectors we serve: Hiring people at all levels of operations is the #1 challenge we face in the coming decade.
I’d love to hear your strategic plans and thinking about recruitment at your company. Send an email with your comments.
Keeping Pace with Chemical Inventories
As if Prop 65, REACH and TSCA regulations aren’t complicated enough to understand and manage, Chemical Inventory Lists are now proliferating – and can vary greatly from country to country, region to region.
To be clear: A chemical that’s approved for use in the US and Europe – but not China – isn’t dangerous; it just hasn’t yet made it to their list.
Our regulatory team is helping our customers navigate regional considerations and prove compliance.
As we look to the future, I continue to believe there are new opportunities for innovation in vinyl products. The economy should improve further in 2017. We’re here to help you take advantage of the growth potential you are facing.
