Film Manufacturers Fail to Recapture Margins

genarex Blog

Source: Plastics News – Film maker moves date for price hike
We reported a few weeks ago that many major film manufacturers in the US recently announced a price increase for films. Berry, AEP, and Sigma Plastics announced price increases in short succession. At the time, it appeared like simply announcing a price hike due to non-raw material based margin compression would prove difficult. It turns out that recovering this margin lost is not so simple.

Delays are often a key indicator that price increases have not received traction. While there are a number of philosophical considerations that can be pondered upon announcement of a delay, more often than not they imply that competition is simply too strong for a supplier to improve their profitability without losing significant volume. The market has proven to be highly elastic, which is a tough pill for suppliers to swallow.

The squeeze that film manufacturers have seen is very real. There is no doubt that cost increases on packaging, logistics, labor, and utilities have all made life tougher on these film manufacturers. World-class film converters are facing a very real battle to stay competitive and maintain healthy margin levels needed to grow.

Now is the time to get creative. Genarex is proud to offer BYLOX – a series of bio-based additive materials which can be added to a large number of commodity resins to offer sustainable value, product performance, and total system cost out. Having recently been certified by ASTM D6866 as being at least 98% bio-based, BYLOX can be loaded in very significant loadings to LDPE, HDPE, PP, PVC, PLA, PHA, and a number of other resin families.

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