Lower energy costs as a means to competitive pricing

09/01/2011

Energy costs represents a huge chunk of a plastics company's overhead, which means energy reduction can pay off in many different ways. Minneapolis, MN-based Diversified Plastics Inc. has found that cutting energy use not only reduces its overhead but also allows the company to be more competitive. Jim Dow, president of Diversified Plastics, told PlasticsToday that the company's energy savings "translate into more competitive market pricing, which ultimately benefits the customer."

Like many companies, Diversified Plastics took several steps to reduce it energy usage. In an interview, Dow noted that at a time when Diversified Plastics, like most molders, is struggling with resin costs that consume a significant portion of its sales, "the challenge it to try to absorb those costs by reducing overhead costs so we can stay competitive with our customers' pricing."

First, they worked with their local power company to identify potential energy savings. The power company conducted an audit, which resulted in a list of recommendations. After reviewing the recommendations, the company determined which actions would produce the best return on investment....
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