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Publish Date: Mar 2008,   Pages: 160,   Report Code: PL-108
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After decades of rapid growth over the course of the past half-century the North American rotational molding business demonstrates all the classic signs of maturity. The menu of rotomoldable plastic materials has expanded over time as have the machine, mold and auxiliary equipment options at their disposal. The processors have become critical suppliers of components, assemblies and final products to customers in virtually every manufacturing industry. Accordingly growth in real terms tends to parallel that of their customers. Thus in order to grow going forward they need to stay up-to-date on and anticipate the evolving needs of their customers. They have also reached an aggregate scale of operations over 1.2 billion lbs. of plastic material consumption and over $3 billion in the value of output as of 2007 large enough that domestic alternative plastics processors and foreign rotomolders seek to compete in several of their important markets and applications. Confronting this new globally competitive marketplace regional rotomolders are assessing their current growth strategies and adjusting them to evolving market conditions.

This report is based on perspectives provided by senior, decision-making officials at over 100 companies with custom, proprietary and/or captive rotomolding operations headquartered in the United States, Canada and Mexico. The growth strategies they are evaluating and implementing vary. First of all, there has been significant corporate consolidation among the industry leaders through the medium of mergers and acquisition of plants and whole companies. As a result the industry concentration ratio (i.e., the share of output controlled by the top 10 players) has risen. These emerging mega-companies pose a daunting competitive challenge to small- to mid-sized processors, particularly as they expand their geographic market reach across the country and across regional borders. Secondly, companies of all sizes have recast their operations to become partners, as opposed to part suppliers, to their customers. This is evident in the rising share of sales revenues derived from secondary operations such as machining, dcorating and assembling parts, as well as inventorying final products and shipping them to their customers customers on a JIT basis. Thirdly, regional rotomolders are diversifying into other processes to broaden their customer base. Fourthly, they are focusing their sales/marketing efforts to avoid those markets that have recently registered slow growth or decline (e.g., toys) and concentrated on those markets that are likely to enjoy sustainable long-term growth (e.g., tanks and containers, materials handling products).

The fundamental challenge confronting regional rotomolders relates to their labor forces. On the one hand secondary operations tend to be labor-intensive which is why the labor/capital ratio in rotomolding is rising. So they need to bolster their work force. Yet like companies in every other regional manufacturing industry they find it difficult to hire additional technical staff as well as hire and retain plant operatives. This is why the concept of a fully automated rotomolding machine hardly a new concept is attracting so much interest and has recently become a reality in this region.


Dr. Peter J. Mooney is the founder and president of Plastics Custom Research Services. Dr. Mooney holds a Ph.D. in economics from the University of North Carolina, and he has covered the plastics industry as a technical/economic market research analyst and consultant since 1980. He is a member of several plastics industry associations such as the Society of the Plastics Industry, the Society of Plastics Engineers, and the Association of Rotational Molders. He is also a member of the National Association of Business Economists. He has researched and written over 100 multi-client reports, as well as over 100 single-client reports, in the field of plastics and related industries. He has also organized, chaired, and made presentations to numerous conferences on critical issues facing the domestic and global plastics industry.
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