The K Fair is the biggest plastics show in the world. More than 3,100 exhibitors fill 19 halls in the Messe Center in Düsseldorf, Germany. It’s been held every three years since the first exhibition in 1952, and I’ve been to all of the fairs except one since 1986. That’s a lot of wurst und alt.
The main purpose for launching the K in 1952 was to convince the public that this “kunst” “stoffe”, or synthetic material, should be considered in a positive way. In many ways, it seems like the K is still like that. In almost every hall there is some kind of a sign that some new plastic is “environmentally friendly” or provides great benefits to modern life. In a way, it is still a PR statement because on weekends German families pour into the show (after paying a special admission fee) to pick up barrels, hula hoops, cups, and whatever else is being used to demonstrate new tools, machines or resins.
The plastics industry certainly has been good to Germany. It’s a huge industry here. One of three exhibitors, understandably, is from Germany, occupying 73,312 square meters of floor space. The Germans really dominate in machinery and tooling, occupying two-thirds of the floor space in those halls. German manufacturers specialize in the most technical and advanced systems. The U.S. has fared less well. There are only two locations left in the USA that even make injection molding machinery: Milacron in Batavia, OH and Engel in York, PA. Engel, of course, is an Austrian company. And Milacron, the last US manufacturer is suffering from a steep decline in US injection molding machine sales as production has moved to Asia. My apologies to Ross Perot, but the huge sucking sound went west, not south. The amount of floor space used by American exhibitors has held steady since K 2004, despite a weak US dollar, while the Asian exhibitors have grown by 38 percent. Even the German exhibit space has grown slightly.
The United States remains the most important plastic resins producer, but the American slice of the pie is declining as our longtime feedstock advantage has eroded. New capacity is exploding in Asia. American ownership of key players is declining, witnessed most recently by the sale of GE Plastics, one of the industry pioneers, to the Saudi Arabian Basic Industries Corp. It’s a good move for the Massachusetts-based business. Major public American companies are driven by shareholders who want predictable quarterly profit growth. That’s not the nature of the plastics industry, which has been buffeted by ups and downs. And the feedstock advantage long-term may be shifting to countries such as Brazil, which can offer sugar cane as a source of the molecules needed to make basic plastics. When oil is more than $40 a barrel, sugar cane is less costly. And with oil above $90 a barrel, the Brazilians are sitting pretty. And as Dow executives affirmed here this week, corn is not a desirable plastics feedstock from a cost or environmental perspective.
The lesson Americans can learn here from the Germans is that our future is in technical specialization. And there are many promising signs of that, ranging from DuPont’s impressive work on photovoltaic systems and nano technology to enterprising toolbuilders and molding specialists who are forming long-term relationships based on technical advantages.