Unsupported Plastics Film and Sheet

SIC 3081

Companies in this industry

Industry report:

Establishments primarily engaged in manufacturing unlaminated plastics film and sheet from purchased resins or from resins produced in the same plant are classified in this industry. Establishments primarily engaged in manufacturing plastics film and sheet for blister and bubble formed packaging are classified in SIC 3089: Plastics Products, Not Elsewhere Classified.

Industry Snapshot

The value of shipments in the plastics film and sheet industry in 2005 was $16.54 billion, reflecting a steady increase from the 2002 total of $14.40 billion. The industry employed 44,011 people (down from 55,514 in 2002), 32,111 of whom were production workers who earned an average of $18.10 per hour. In 2008, however, the industry's shipments fell to $12.82 billion; the direct result of the ongoing economic downturn.

The states ranking in the top 10 by value of shipments in order of descending value in the mid-2000s were Texas, Virginia, Ohio, Pennsylvania, Georgia, Indiana, California, Massachusetts, New Jersey, and North Carolina. These states accounted for 50 percent of total shipments.

Background and Development

Although the terms are sometimes used interchangeably, plastics films are generally defined as being less than 0.010 inches in thickness, whereas plastics sheet is thicker. The plastics film and sheet industry had its origins in the rapid growth of the organic chemical industry in the late nineteenth century. The first commercially successful plastics film was cellulose nitrate. Although this film had many desirable properties, its flammability limited the scope of its use. In his book Plastic Films, John Briston called regenerated cellulose, or cellophane, "the most important development in films." The commercialization of this film followed the development of continuous-process film production machinery, for which the Swiss chemist J.E. Brandenburger received his first patents in 1911. Cellophane was initially used for the packaging of luxury and semi-luxury goods, but its use expanded rapidly thereafter.

Plastic Films: Technology and Packaging Applications, by Kenton Osborn and Wilmer Jenkins, summarized the growth of the industry as follows: "The commercialization of cellophane in the 1920s revolutionized the flexible packaging of consumer goods. For the first time, the buyer could see the contents of the package through a film that protected the packaged items from dirt, moisture, and atmospheric gases. Countless items previously packaged in heavy metal or fragile glass containers began to appear in this safe, convenient, light-weight film. As a result, the flexible packaging industry grew from a small, paper-based operation into the...giant it is today."

Cellophane remained the dominant film in the industry until the commercialization of polyethylene film in the 1950s. One of the key advantages of polyethylene film was its lower cost, which made it practical for large-tonnage packaging applications. As of 1987, cellulose films made up 7 percent of the industry's product share, compared to 29 percent for polyethylene films. The rapid post-World War II growth of the pre-packaged food industry provided an ever-growing demand for polyethylene films. The use of polyethylene films expanded to the packaging of textiles and toys, as well as heavy sacks for industrial and agricultural uses.

The industry introduced polypropylene films in 1959. Because this film was stiffer than polyethylene film, it readily lent itself to packaging with high-speed machinery. Polypropylene film made up 7 percent of the industry's product share in 1987 and was expected to grow more rapidly in use than polyethylene films.

The rapid market growth of plastics films was enabled in part by ever-lowering costs. This changed to some extent after the oil crisis of 1972, which slowed the growth of the industry. Nonetheless, plastics film continued to grow at the expense of cellophane and other traditional, flexible packaging materials. Considering that the production of aluminum foil was up to four times as energy-intensive as the production of plastics film, Osborn and Jenkins noted, "Rising energy costs will continue to favor flexible over rigid packaging, plastics films and paper over foil, and may cause a minor shift in the paper/plastics balance in the favor of paper. The latter effect cannot be large, since paper has only a few of the many packaging-friendly attributes of plastics." The authors conclude that the diminishing supply of oil and gas will not significantly affect the production of plastics films for two reasons. First, of products produced with oil and gas, plastics have the highest value added in the production process. Second, plastics packaging used only 0.5 percent of all oil and gas consumed in the United States.

A market that became important for plastics films in the late twentieth century was agricultural production. The agricultural industry used plastics films for greenhouses, row covers, irrigation channels, and mulches. Plastics mulches reduced weeds, fungi, and insects, and held in ground moisture. The use of plastics mulches resulted in yield increases of up to 250 percent in certain field tests.

Total shipments in the plastics film and sheet industry remained steady from the mid-1990s to the mid-2000s, then increased in the mid-2000s. The value of shipments was $13.6 billion in 1997, $14.3 billion in 2000, $14.9 billion in 2004, and $16.5 billion in 2005. The number of establishments in the business increased from 824 in 1997 to 880 in 2002. The number of employees also increased during this time, but only slightly, from 54,193 in 1997 to 55,304 in 2000, then showed a drop by 2005 to 44,011. Of the industry shipments in the mid-2000s, 30 percent was comprised of polyethylene film and sheet, 7 percent was polypropylene, 16 percent was vinyl and vinyl copolymer, and 40 percent was other film and sheet products, including cellulosic and acrylic.

One of the important challenges facing the plastics film and sheet industry was the need to develop more environmentally friendly products and processes. Two researchers at Cornell University published a study that addressed the biodegradability of plastics films. The researchers tested 12 films claimed by their manufacturers to be biodegradable and judged that only one of these films, produced by E.I. DuPont de Nemours & Company (DuPont), was truly biodegradable. This film was relatively expensive and may not be economically feasible for such applications as trash bags. Of the other films claiming to be biodegradable, the best of them simply broke into small pieces. Demand for biodegradable and recycled plastics was expected to have a lasting impact on the industry.

Polyflex Manufacturing, a division of Plastic Suppliers based in Columbus, Ohio, was one of the companies promoting an "earth-friendly" plastic film product in the mid-2000s. Its EarthFirst PLA film was made from field corn rather than petrochemicals. To make the product, corn was harvested, broken down into dextrose, and fermented into lactose acid. The lactose acid was transformed into polylactide (PLA) resin, which was then made into a film that was 100 percent compostable. Other companies continued efforts to find products and solutions that would cater to environmentally conscience consumers.

Current Conditions

According to industry statistics, there were an estimated 935 establishments engaged in manufacturing unlaminated plastics film and sheet from purchased resins or from resins produced in the same plant. Shipments in this industry were valued at $12.8 billion in 2008, down from $16.5 billion in 2005, with industry-wide employment of 50,009 workers. States with the highest concentration were California, Illinois, Texas, New Jersey, and Wisconsin. On average, each establishment employed 59 employees and generated $25.3 million in revenues.

Unsupported plastics film and sheet producers shipped products worth more than $3.4 billion in 2008. Producers of plastics film and sheet followed with $2.1 billion in shipped goods. Polyethylene producers had shipments that reached $5.1 billion. Plastics sheet, packing materials, producers earned revenues of $402.9 million, while vinyl film and sheet producers shipped $268.1 million in goods.

According to Ohio-based industry research firm Freedonia Group, "green packaging," while in the early stage, was expected to increase 3 to 4 percent annually to $43.9 billion in 2013. However, biodegradable plastic packaging was projected to advance nearly 13 percent annually through 2013.

The Freedonia Group also reported that demand for domestic "medical plastics" would grow 2.6 percent annually to five billion pounds in 2012. Thus, polypropylene and polyethylene was expected to expand 2.3 percent annually to 4.3 billion pounds worth $4.6 billion in 2012, fueled by an older demographic population.

Industry Leaders

Among the key players in the plastics film and sheet industry in the mid-2000s were Alcoa Inc. of Pittsburgh, Pennsylvania, which bought Reynolds Metals Company in 2000, and the Hunstman Corporation in Salt Lake City, Utah. These companies were quite diversified, and plastics film and sheeting make up only part of their overall sales and production. Alcoa posted 2006 sales of $30.4 billion (a 19 percent increase from the previous year) and Huntsman posted $13.1 billion. Other industry leaders included Borden Chemicals and Plastics Limited in Geismar, Louisiana, a limited partnership formed in 1987 to acquire and operate chemical plants in Louisiana and Illinois that were previously owned by Borden, Inc. The company produced plastics film and sheet in addition to other PVC polymer products, methanol and derivatives, and nitrogen products. Viskase Companies, Inc. of Willowbrook, Illinois, was one of the world's leading producers of non-edible cellulose casings and nettings used to hold sausages and hot dogs together during smoking and cooking. The company also produced cellulose membranes for use in dialysis. Sales in 2008 were $210 million.

In 2008, Alcoa Inc. sold its packaging business responsible for more than 10 percent of its revenues to New Zealand private investment firm, the Rank Group. Borden Chemical, Inc., including subsidiary Borden Chemicals, Resolution Performance Products LLC, and Resolution Specialty Materials LLC, merged operations. The newly formed company, Hexion Specialty Chemicals, reported revenues of $6.09 billion in 2008 with 6,800 employees. Prior to the economic meltdown in 2008, Hexion agreed to purchase Hunstman Corporation for $10.5 billion in 2007, but pulled out of the deal at the end of 2007. Apollo Management controls more than 90 percent of Hexion. Hunstman Corporation reported revenues of $10.2 billion in 2008 with 12,600 employees.

Research and Technology

Plastics film and sheet were produced by feeding molten plastics through either a flat or tubular die. After being shaped, the film was cooled, or "quenched," either by coming into contact with a cooled roller or by being immersed in water. Water quenching more uniformly cools films and was preferred, especially when film clarity was a consideration.

One of the most important outputs of the industry was laminated plastics films. Lamination enabled a film that combined the optimal characteristics of each of the component materials, whether that characteristic was imperviousness, stiffness, clarity, strength, or wrinkle resistance. Laminates were produced either by the adhesive bonding of separately produced films or by the newer process of coextrusion. In coextrusion, two or more films were simultaneously formed and heat-bonded either by a set of adjacent dies or by a manifold die. By creating laminated plastics films in one continuous process, coextrusion greatly reduced their cost. One of the disadvantages of coextruded films was that printing on the protected inside surface was not possible because component layers are formed and bonded almost simultaneously. The quality of print was of great importance for the marketing of packaged food products. New developments in surface printing were under way to address this problem.

The industry developed a number of new products and processes in the 1990s to address the issue of environmental safety. A project undertaken by Dow Plastics and Advanced Environmental Recycling Technologies of Rogers, Arkansas, created a new process to remove dirt and other wastes from recycled polyethylene grocery sacks and stretch film. Grocery and merchandise bags constituted the bulk of recycled plastics film products. DuPont developed a polyester film, Mylar OL, that enabled dependable seals for packaging with the use of adhesives, making the film more readily recyclable.

The Exxon Chemical Company started a film production line in 1993 that was capable of producing seven million pounds of plastics film per year, using up to 50 percent post-consumer plastics. Mobil Chemical developed a new low-density polyethylene called "Super Strength" that enabled films to be produced that were 30 percent thinner, yet just as strong as conventional plastics films. Highly impervious silica-coated plastics films began to be commercialized in the United States in the 1990s after having been developed in Japan and in Europe. Aside from their desirable packaging properties, silica-coated films more readily lent themselves to recycling than laminates containing vinyl-based resins.

Airco Gases of Murray Hill, New Jersey, developed a cooling technology known as cryogenic bubble cooling. This process eliminated a long-standing bottleneck in the production of plastics films and enabled output increases of up to 60 percent.

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