Category Archives: manufacturing

Higher Resins Prices Here We Come

Posted on November 17, 2011 by

[This article is also posted on Plastics Today.] As ample evidence shows, oil drives resins prices. Plastics processors have been lucky in the last year or so that WTI crude oil prices have been suppressed by a supply glut at … Continue reading →

Posted in competitors, crude oil, customers, Futures, manufacturing, margin risk, plastics manufacturers, profit margin

Profit Sharing for Profit Making

Posted on October 20, 2011 by

[This article is also posted on Plastics Today.] Last time, we learned that Poly Wise is attempting to structure a deal with a polypropylene supplier utilizing the new resins pricing paradigm. They offer to buy polypropylene on a long-term contract … Continue reading →

Posted in competitors, crude oil, employees, Energy prices, Futures, jobs, manufacturing, new resins prices, plastics manufacturers, profit margin, Strategies | Tagged

New Pricing Paradigm for Higher Margins and a Secure Future

Posted on October 4, 2011 by

[This article is also posted on Plastics Today.] A recent study (Plastics Today, 27-June-11) indicates plastics manufacturers are happy with an 8% return on sales (gross profit margin) because the historical average is 5% to 7%. If you’re happy with … Continue reading →

Posted in competitors, crude oil, customers, Futures, hedging, jobs, manufacturing, margin risk, new resins prices, plastics manufacturers, profit margin, Strategies

Stingy Customers & Profit Margins

Posted on September 12, 2011 by

[This article is also posted on Plastics Today.] ‘Stingy customers’ are everywhere, even for medical device manufacturers. Device Talk and this article in the Economist discuss how Medtronic is dealing with them. Some excerpts – Scandals, recalls, stingy customers, anxious … Continue reading →

Posted in commodity prices, customers, Futures, hedging instruments, manufacturing, margin risk, plastics manufacturers, profit margin, Strategies | Tagged , ,

Pricing Choices for Sales and Profits

Posted on July 11, 2011 by

[This article is also posted on Plastics Today.] As discussed in Pricing Choices, reliability, quality, and service have gone from being ‘game changers’ to ‘admission tickets’ for manufacturers to compete for new business — and hold on to what they … Continue reading →

Posted in commodity prices, competitors, customers, hedging, hedging instruments, jobs, manufacturing, plastics manufacturers, profit margin, sales, Strategies

Pricing Choices

Posted on July 5, 2011 by

Win new customers and retain existing ones [This article is also posted on Plastics Today.] Hedging tools such as resins futures (discussed below in the Hedging Corner) provide means to protect manufacturers against higher resins and other raw materials costs, but may … Continue reading →

Posted in competitors, customers, manufacturing, plastics manufacturers, profit margin, sales, Strategies

A No-Brainer & 2-for-1

Posted on June 20, 2011 by

[This article is also posted on Plastics Today.] In strategic, long-term hedging, there are few no-brainers. There are also few 2-for-1′s. When they occur simultaneously, you seize the opportunity. It appears manufacturers have such an opportunity in natural gas – at … Continue reading →

Posted in commodity prices, crude oil, Energy prices, ethane, ethylene, Futures, hedging, hedging instruments, manufacturing, natural gas, Strategies

Smart Chocolate

Posted on June 8, 2011 by

[This article is also posted on Plastics Today.] In the post below, I discuss how big banks made small fortunes by capitalizing on rising commodity prices while non-hedging manufacturers took a hit. Ironically, the big banks did the very things … Continue reading →

Posted in commodity prices, Futures, hedging, hedging instruments, jobs, manufacturing, plastics manufacturers, profit margin, Strategies | Tagged , , , ,

Manufacturers Take a Hit, Big Banks Cash In

Posted on June 6, 2011 by

[This article is also posted on Plastics Today.] High Commodity Prices Slow Manufacturers (WSJ, 1-June-11) “U.S. manufacturing growth slowed substantially in May, as the ISM index fell to 53.5, the lowest level since September 2009. … higher commodity prices and a sharp … Continue reading →

Posted in commodity prices, Energy prices, hedging, jobs, manufacturing, plastics manufacturers, profit margin, rules | Tagged ,

Crude Oil Drives Resins Prices — Exxon “says” so

Posted on May 13, 2011 by

Money and advertising speak loudest … Exxon Fuels a Chemicals Drive (WSJ, 1-June-11) “Exxon Mobil Corp. is nearing completion of one of the biggest projects in its corporate history—a giant expansion of a petrochemical facility in Singapore. Exxon built the Singapore … Continue reading →

Posted in crude oil, Exxon, manufacturing, Strategies | Tagged , , ,