The trends are undeniable: globalization and consolidation are fundamentally reshaping the plastics industry, according to Thomas Blaige of investment bank Blaige & Co. (Chicago), who delivered the keynote speech at the Molding 2014 conference in Newport Beach, CA, on March 3, 2014. "Almost 70% of 2001's top 50 injection molding companies have merged or been sold in the past 12 years, and this trend has been consistent across all sectors in the plastics industry," he noted. "The fastest growth has occurred internationally, especially in the BRICs, and strategic consolidation is changing the competitive landscape." So, what should you do? Simple: lead, follow, or get out of the way.
The leaders, which represent 10 to 20% of the plastics universe, are rapidly gaining market share through strategic acquisitions and keeping their company fit through selective divestitures, according to Blaige. You don't need to lose any sleep over those folks.
The followers, the bottom 10 to 20%, are rapidly losing share and should begin to think about cutting their losses by restructuring or selling, said Blaige. The good news is that it's a bit of a sellers' market, he added, with truckloads of capital sitting around looking for good investments. "Pretty up your company and sell it for the maximum price. Don't emulate the buffalo: proud, strong, and extinct," he advised attendees.