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February 20, 2012 A Plastics News Global Group newspaper $5 per copy

Volatility returns to polypropylene market By Frank Esposito PLASTICS NEWS STAFF

The North American polypropylene market made it all the way to the second month of 2012 before returning to the vol­canic behavior it displayed in 2011.

Prices for the material have surged an average of 17 cents per pound since Feb. 1, according to buyers contacted by Plas­tics News . Selling prices in the region for PET bottle resin have seen a more modest price increase of 4 cents per pound since Jan. 1.

The PP move is the first increase since May 2011. At that pOint, prices had

climbed 37 cents in the first five months of the year. Prices then tum­bled 41 cents before 2011 ended. This ex­treme volatility - as well as long-term supply concerns about propy­lene feedstock - has led a number of processors to consider using other materials instead. Newell

The February move resulted from tight­ness in propylene supply caused by a number of refinery maintenance turn­arounds .

"Some big refineries are going down," said Scott Newell, a PP market analyst with Resin Technologies Inc. in Fort Worth, Texas. He added that propylene prices "had bottomed out and were bound to come back up."

PP buyers might be getting accustomed to double-digit price swings, after seeing five such movements in 2011. But that doesn't make the volatility any easier to take.

"We work hard to pass these costs on, but our contract changes to our cus­tomers are delayed," a PP buyer in the Midwest said. "Our costs go up immediate­ly, but our customers' might not go up for

K'Nex expecting reborn Tinkertoy to charm tots, nostalgic parents By Julie Pavelich PLASTICS NEWS CORRESPONDENT

K'Nex, a maker of innovative toy construction sets, has teamed up with Hasbro Inc. to reinvent the Tinkertoy, known tor providing generations of children with hours of building fun.

"We realized how much people through the years have loved Tinkertoy and how it fosters open-ended, imaginative

Joe Keane, Hasbro's vice president of global brand licens­ing and publishing, also said he believes the revitalized Tin­kertoy will be a hit with adults and children.

"Since its introduction in 1913, the Tinkertoy brand has driven the imaginations of children for generations, proving that fun and stimulating toys never lose their appeal," Keane said.

"The Tinkertoy brand has continued to evolve to keep with play," said Michael Araten, president of K'Nex Brands LP and its sister company, Rodon Group, a custom injection molder.

The new, all-plastic Tinkertoy circus set K'Nex Brands LP photo

consumer expectations, and w·e believe that K'Nex is the right li-

For years, K'Nex has created con­struction sets, including roller coast­ers and many others, for children 6 and older. But a few years ago, the company recognized that ' younger children might want to

. build similar items but would need fewer pieces and bigger parts . "Tinkertoy was appealing to us for this rea­son," Araten said in a phone interview.

In the same way that K'Nex partnered with Hasbro in 1999 to market the clas­sic wood toy lin­coln Logs, the two companies recently announced the li­censing partnership for K'Nex to produce the modern-day, primarily polypropylene Tinkertoy.

"We thought this was a nice combination - to now offer two nostalgic toys," he said.

K'Nex presented the new Tinkertoy at the American Inter­national Toy Fair, held Feb. 12-15 in New York.

the agreement.

censee to evolve that brand further." .

The licensing agreement with Hasbro gives K'Nex the right to develop the product, Araten said, explaining that "we can de­sign, build, market and distrib-

ute it." Hasbro's Playskool divi­

sion will get a royalty for rights to the Tinker­

toy name, Arat­en said, noting the two com­panies have

been in talks for two to three years and

agreed on the deal about a year ago.

Neither Araten nor Keane would disclose specifics of

"We are excited to be working with K'Nex," Keane said. "li­censing· is a great mechanism to align our core brands with category experts like K'Nex."

The new products will snap together and stay together so kids can play with their creations once they build them. They will be geared for children ages 3-5.

Two versions being promoted now are the 75-piece Animal See Tinkertoy, Page 24

another month or two or longer. "Changes in price are part of life, but

these big swings are hard to deal with . It hurts us short-term on cash flow."

As a result, the buyer said his firm is looking at buying some of its PP from out­side of North America for the first time, and also is working on switching some of its products to poJyethylene. That second item could be challenging, since more than half of his firm's products are re­quired to use PP.

Refineries temporarily out of produc­tion for maintenance included Exxon Mobil Chemical's unit in Baytown, Texas, and

See Volatility, Page 24

Prent adds to global footprint By Mike Verespej PLASTICS NEWS STAFF

ANAHEIM, CALIF. - Medical packaging thermoformer Prent Corp. is building on its strategy of supplying customers global­ly, with expansions under way in Costa Rica, Malaysia and Denmark.

All that growth is on top of a 50,000-square-foot expansion last year at its headquarters plant in Janesville, Wis., which boosted the square foo~age of that facility to 300,000 square feet.

"We started on the Costa Rica project in See Prent, Page 24

EPA issues new emission rules for PVC By Rhoda Miel PLASTICS NEWS STAFF

The Environmental Protection Agency has issued new emission standards for PVC production that it said will improve air quality and public health near produc­tion sites, but also cost an estimated $18 million in capital investment improve­ments at PVC production sites.

The 17 U.S. facilities that fall under the EPA's Maximum Achievable Control Tech­

See EPA, Page 24

"We had a ton of favorable reaction," he said, noting that it is pleasing to children and to adults who played with the Tin­kertoy themselves as children. "When you take classic toys and put a fresh spin on them, you get the best of both worlds."

RESINS & ADDITIVES PREVIEW

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Whos unveiling latest resins, compounds . ~ .... Page 9

Recyclers readying new wares for show . Page 10

Chemicals, additives designed for safety. Page 11

Check out our pre-coverage of the April 1-5 NPE show at plasticsnews.com

I ...

24. PLASTICS NEWS, February 20, 2012

Prent Continued from Page 1 late 2011," said President and CEO Joseph Pregont in an inter­view at the Medical Design & Manufacturing West show, held Feb. 14-16 in Anaheim. "It's going to be ready late in the second quarter."

The Heridia, Costa Rica, plant will be about 20,000 square feet and the company's seventh plant globally.

"It is primarily to serve our medical device customers who manufacture their devices or products in Costa Rica," Pregont said. "They will get a lot of sav­ings because we will be shipping

raw materials there now, in­stead of ship­ping products from the main­land United States to Costa Rica."

Pregont also said Prent will be moving into a brand-new, Pregont 1BO,000-square-foot facility this month in Johor, Malaysia. That plant will replace its current BO,OOO-square-foot facility in that country.

"It's a greenfield facility with Class 8 clean rooms. We've been working on it for about six months. Our expansion in Malaysia is based on a recovery in electronics markets and the

growth in the medical device market."

That move is similar to one two years ago when Prent relocated to a new plant in Shanghai that doubled its capacity in that coun­try, and increased the number of clean rooms in China from one to three.

Also, the firm's 30,000-square­foot facility in Holbrek, Denmark, is "getting itself in position for an additional equipment expansion sometime this year" that will in­crease production capacity there by 50 percent, he said.

"We are continuing to position ourselves for the next move for where we need to be for our cus­tomers," Pregont said. "We have to continue to supply our prod­ucts where our customers want us to manufacture them."

Huntsman Jr. to speak at NPE PLASTICS NEWS REPORT

ORLANDO, FLA. - NPE2012 has landed a well-known name in both plastics and national poli­tics to deliver the event's keynote address: former Utah Gov. Jon Huntsman Jr.

He will deliver the address April 1 in Orlando at a gala mark­ing the 75th anniversary of the Society of the Plastics Industry

Inc. and the 50th anniversary of the Plastics Hall of Fame.

Also a former U.S. ambassador to China, Huntsman was seeking the Republican nomination for U.S. president before bowing out of the race in late January.

Huntsman's father, Jon Hunts­man Sr., founded Huntsman Corp. of Salt Lake City in 1970. Today, the firm is a global plastics and chemicals maker with annual

Tinkertoy spools. In time, the spools and other pieces were made of plastic. In 1998,

Continued from Page 1 Tinkertoy was Building Set with a suggested retail price of $27.99, named to the and the ISO-piece Train Building Set, which sells for National Toy $43.99, according to K'Nex. Hall of Fame.

There will be some exclusive lines also, including Hasbro has ones for Toys R Us, so in total there will be at least owned the

sales of more than $9 billion. Huntsman Sf. was inducted into the Plastics Hall of Fame in 1994.

Huntsman Jr. was named to the Huntsman Corp. board of directors Feb. 1. Huntsman

four other sets at stores by fall, with more perhaps rights to Tinker- Keane Araten down the road, Araten said. toy since 1985 and produces plastic and wood sets

"Tinkertoy was a seven-figure investment to currently on store shelves in certain mass-market launch the brand," he said. "But we expect to get a areas, Keane said. He said the new product will long-term deal. There are plans on the table for new keep the features that have made Tinkertoy popular themes and designs for the coming years." for years.

Since the Tinkertoy sets will be built almost en- "Preschool construction consumers will still en-tirely at K'Nex's plant in Hatfield, Pa., that invest- joy the open-ended construction play pattern that ment included purchasing addi- Tinkertoy has always been known for," tional robotics and 11-12 new Keane said. "In addition, K'Nex will molds to make the be introducing an entire cast of build-plastic parts, Araten able pals and pets helping to bring said. The plant's exist- building and role-play together into ing core molding ma- one perfect play pattern." chines will be used to man- The new sets will be entirely plastic, and ufacture the pieces with the 95 percent of the product will be made in the addition of the new molds and U.S. at K'Nex's manufacturing site, according robotics, he said. to Araten.

"There has been a lot of "We will have to import a couple of parts discussion, research and from overseas, but all will be plastiC," he said, work - and a lot of over- noting the toys will be available first in the U.S. time," he said, adding that and Canada by fall - online and in specialty K'Nex's workforce has grown EI h t d 'th T' k rt rt stores, as well as all of the large toy stores since 2008 due to the success K'N~~ B~~d$'r~ Ph~t~1 In e oy pa S and big-box stores like Target, Wal-Mart of its toys and to prepare for and Kmart. In 2013, K'Nex plans to market future projects like Tinkertoy. "I can't say it's specif- the Tinkertoy in Europe. ically for Tinkertoy, but we have hired over the last "The Tinkertoy brand has appealed to genera-three years." tions of children who love to build," Keane said.

The Tinkertoy construction set was first created "K'Nex is a leader in the construction category and in 1913 by Charles Pajeau and Robert Pettit after Pa- will expand the brand into key specialty distribu­jeau saw children play with pencils and empty tion, where we know that moms who are looking for spools of thread. The first sets had wood sticks and classic brands shop."

AccessAbility A global supply and distribution network, more than 34 strategically located warehouses and a team equipped with state-of-the-art mobile technology to ensure accurate, real -time data.

That's AccessAbility from Chase Plastics.

Pregont credits the firm's con­tinued expansion and double-digit growth the past decade to "good people who are willing to work hard to improve our quality."

"We are the only true global supplier to our customers, and we offer superior design and bet­ter quality," Pregont said. "We are working hard to be innovative [and] develop new product solu­tions and ways to reduce costs because that is the objective of our customers.

"With the continued spiraling resin costs, our customers are demanding we come up with cost

EPA Continued from Page 1 nology regulation will also spend more than $4 million more per year to maintain operations un­der the new requirement.

The rule, issued Feb. 13, up­dates ones last revised in 2002. The agency hosted two public hearings and a series of studies before launching the changes.

In a fact sheet issued by EPA, the agency said the final rule sets emission limits and work-practice standards for total organic air toxins and also for three specific air toxins: vinyl chloride, chlori­nated di-benzo dioxins and fu­rans, as well as hydrogen chlo­ride. Previously the rule set an emission limit for vinyl chloride only and used that level as a "sur­rogate" for all other air toxins.

The changes will reduce emis­sions from major sources by 238 tons of total air toxins, the agency said.

Facilities will have the flexibili­ty to choose the "most practical and cost-effective control tech­nology or technique to reduce

Volatility Continued from Page 1 Dow Chemical's St. Charles unit in Hahnville, La. A refinery oper­ated by Flint Hills Resources in Port Arthur, Texas, also was down because of a power outage, according to the PetroChem Wire LLC consulting firm in East Or­ange, N.J.

The double-digit increase comes as the North American PP sector is coming out of a year in which sales fell more than 4 per­cent, according to the American Chemistry Council in Washing­ton. A loss of almost 3 percent in domestic sales was worsened by a 24 percent plunge in exports.

North American PP sales for 2012 totaled about 16.4 billion pounds, with 94 percent of that amount being sold domestically, according to ACC. Sales into in­jection molded cups and contain­ers provided a bright spot for the market, climbing almost 13 per-

savings. So we continue to take costs out of our products and processes through more labor-ef­ficient equipment, better deSigns and lighter products."

Prent currently has about 1,600 employees, with about one-third of them in Janesville. Prent cus­tom-builds its own thermoform­ing equipment and designs all of

. its facilities to be identical so it can move production and equip­ment from plant to plant.

Prent also has plants in Yauco, Puerto Rico, and Flagstaff, Ariz. Prent's sales are estimated at $300 million.

the emiSSions," the agency said in a Feb. 14 news release.

Ten of the 'operations affected by the rulings are in Texas and Louisiana, with two more in New Jersey and one each in Delaware, Illinois, Kentucky, Michigan and Mississip.pi.

The Vinyl Institute, based in Alexandria, Va., said it is "cau­tiously optimistic" that the agency considered the full range of data available on PVC produc­tion before authorizing the final rules, but noted that EPA has added to the list of emissions the industry must monitor.

VI members spent 18 months and invested "millions of dollars" in benchmarking emissions from vinyl production to use as a basis in updating the MACT rule, the group said in a news release.

"PVC resin manufacturers in the United States have demon­strated their commitment to the environment over the pasf 20 years by reducing their emissions 80 percent or more even as PVC production increased 77 percent domestically," said VI President Richard Doyle.

VI will conduct an extensive technical review of the final rule to understand it more fully.

cent, but sales into injection molded housewares tumbled by a similar percentage. Sales into monofilament and multifilament fibers - including carpet-facing yarn - also slipped almost 11 percent during the year.

Compared to the eruptions in PP prices, the 4-cent increase seen in the PET bottle resin mar­ket in January and February was a gently rolling hill. Some buyers reported seeing increases of as much as 6 cents in that two­month period, but 4 cents was the consensus' amount.

The higher price for paraxylene feedstock was among primary reasons for the PET increase, which came after prices for the material fell an average of 5 cents in December. One PET market watcher said higher feedstock prices are creating pressure for additional price increases in March as well.

During 2011, average North American selling prices for PET grew by a net of 5 cents per pound, or about 6 percent.