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Warm Welcome for Plastics: Charlotte, Other Cities Seek Industry

Posted on: Wednesday, 17 May 2006, 09:05 CDT

By Kerry Hall, The Charlotte Observer, N.C.

May 17--Warm welcome

for plastics Outperforming other manufacturers Charlotte, other cities seek industry At Double O Plastics Inc. in Concord, president Lee Orlic has done his best to cram hundreds of thousands of dollars worth of equipment and boxes of product into 4,500 square feet.

Thirteen injection molding machines run 24 hours a day, spitting out plastic goods such as clock covers, electrical circuits and golf-cart seat covers. Despite rising oil prices, which are squeezing profits, Orlic is eyeing additional space for his mid-sized company, which employs 42.

Plastics, and companies such as Orlic's, are the new darlings of economic development. Plastics are so hot that local economic developers spent much of last week walking the floor of the Charlotte Convention Center, meeting and greeting an estimated 3,500 plastics engineers in town attending a technical conference.

It's "a very important and urgent manufacturing industry that we want to go after," said Kenny McDonald, senior vice president with the Charlotte Regional Partnership, which works to lure companies to the area.

McDonald said recruiters covet plastics because the industry is so diverse, producing everything from milk jugs to Ziploc bags, from air filter covers to dental devices. Plastic manufacturers also can attract other industry, such as automotive suppliers, which need plastic parts, and vice versa, he said.

"Plastics," McDonald said, "seem to be a component of it all."

This year, as manufacturing fuels growth in the U.S. economy, plastics are performing better than average, according to data released Tuesday by the Federal Reserve. While industrial production rose 5.5 percent from April 2005 to last month, plastics and rubber products rose 5.7 percent -- despite higher prices for petroleum, a key ingredient in plastic.

The industry is also creating jobs, albeit at a slower rate than in years past. The Bureau of Labor Statistics predicts plastics employment will grow by 16.1 percent, adding 137,600 jobs nationwide between 2002 and 2012, compared to 14.8 percent growth in jobs overall.

The Charlotte Regional Partnership says North Carolina ranks ninth in plastics employment and that the area is "the top producer" of polyethylene terephthalate, or PET, a plastic resin used in 2-liter soda bottles.

"Is plastics a healthy industry right now?" said Wachovia Corp. economist Jason Schenker. "Yes, that seems to be the case."

History in Carolinas

While recruiters' focus on plastics is relatively recent, the industry existed in the Carolinas for decades, supported by the textile mills and furniture companies that once dominated the state's economy. Nylon, for example, is made from plastic. A decade ago, Orlic had "a million-dollar business" making decorative frames for a furniture company, he said.But plastics suffered as textile and furniture companies moved overseas. Some plastic manufacturers, particularly the labor-intensive ones, also moved offshore, said Dennis Hayford, an industry veteran and executive director of the Polymers Center of Excellence, a University City group that advises companies and assists with research and development.

Then came the 2001 recession and reduced demand for consumer goods. The industry has since rebounded, and is "much more lively than 10 to 15 years ago," Hayford said.

Starting with pellets

Lee Orsic founded Double O Plastics roughly 15 years ago, after spending more than two decades as a plastics salesman. He said he focuses on customers with branded products because such items tend to last longer on the market, providing a more stable supply of business. He makes products ranging from high-chair trays to hot pink deep sea fishings lures that look like tiny rockets.

Each product starts with a pellet. Most white, some black, some gray, sit in huge sacks. A vacuum hose sucks the plastic pellets into an electric dryer, and then into an injection molding machine, which melts the pellets.

At one station, the injection molding machine spits out eight electric circuits half the size of a Wheat Thin cracker every 17 seconds.

Business, while better than last year, "is not solid," Orlic said, adding it's hard for him to pinpoint what's wrong. He's seeing more rush orders as customers run leaner operations and wait to stock up on new inventory, he said.

His raw material has nearly doubled in price in recent years, he said.

Still, McDonald said Orlic's business strategy illustrates why the industry is a good target for recruiters.

"Their survival instincts are very strong," he said.

Helping Growth

Started in 1972 as part of the state's polymer extension program at UNC Charlotte, the Polymers Center of Excellence's goal is to help the plastics industry grow.With 12 full-time employees, the center does product development, testing and production at its building off Research Drive. It also trains workers.

The center receives funding from the state and private companies it works with.

Two weeks ago, the center bought the building its been housed in since 1999. Walls are being torn down, classrooms enlarged and equipment moved to a new laboratory.

"What you're going to see here," executive director Dennis Hayford said, "is a lot of change."

Bumpers to Diapers

Plastic isn't just for milk jugs or soda bottles. Think electrical circuits, baby diapers, car bumpers and nylon.

Plastics are also increasingly found in medical and dental devices.

Plastics Newcomers in Charlotte Region

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Copyright (c) 2006, The Charlotte Observer, N.C.

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Source: The Charlotte Observer (Charlotte, N.C.)

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