Marlon Mlxes

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Marlon Mlxers

ScoLL !ones
nov 13, 2009
!"#" %"&'()* ()'+,#!- %.!/0# .).&-,(,
lor over 40 years Marlon Mlxers has manufacLured horlzonLal baLch mlxers for mlxlng & blendlng
polymer compounds for Lhe plasLlcs lndusLry. 1hls sLudy wlll focus on Lhe global roLomoldlng lndusLry,
Lhe LhermoplasLlc compoundlng lndusLry and oLher emerglng markeLs.
2



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1. WhaL are Lhe sales opporLunlLles for Lhe roLomoldlng lndusLry?
2. WhaL are Lhe sysLem sales opporLunlLles of Lhe roLomoldlng lndusLry?
3. WhaL ls Lhe value of Lhe roLomoldlng lndusLry Lo our sales model?
4. WhaL are Lhe ouLslde sales opporLunlLles for Lhe domesLlc roLomoldlng lndusLry?
3. MarkeL Summary
6. CLher MarkeLs:
Compoundlng
1oll Compoundlng
1hermoplasLlc MasLerbaLches
lorelgn MarkeLs
o 8oLomoldlng ln Chlna
8loplasLlcs






3

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8oLaLlonal moldlng, also known as !"#"$"%&'() or +,(#!'-.)/% +/0#'()1 lnvolves fllllng a mold cavlLy,
generally wlLh powder, granular or vlscous llquld and roLaLlng Lhe enLlre heaLed mold along Lwo axes Lo
unlformly dlsLrlbuLe Lhe plasLlc along Lhe mold walls. 1hls meLhod ls commonly used for maklng hollow
parLs, llke blow moldlng, buL ls used elLher when Lhe parLs are very large (as ln Lhe case of lmplemenL
LracLor cabs, kayaks, ouLdoor porLable LolleLs, phone booLhs and large chemlcal sLorage drums) or when
Lhe parL requlres very low resldual sLresses.
1hls ls a relaLlvely low cosL meLhod, as molds are lnexpenslve, maklng lL sulLable for shorL-run producLs.
ulfferenL Lypes of producL can be molded LogeLher on Lhe one machlne. 1he drawback ls LhaL Lhe
heaLlng and coollng Llmes are long, and Lherefore Lhe cycle Llme ls long.
8aw maLerlals Lyplcally conslsL of lower vlscoslLy reslns such as plasLlsols, polyeLhylene, polycarbonaLe,
aceLaLe buLyraLe, polyamlde, elasLomers, polyureLhane, polypropylene, eLhylene vlnyl aceLaLe and
fluorocarbons. 1he mosL common compounds used ln roLomoldlng are:
olyeLhylene (Low uenslLy) LuL, LLuL
olypropylene
LLhylene vlnyl AceLaLe LvA
olyvlnyl Chlorlde (vC)
AlLhough roLomoldlng ls Lhe fasLesL growlng markeL of Lhe norLh Amerlcan polymer plasLlc mold
lndusLry, lL ls Lhe smallesL. CollecLlvely Lhls ls an $84 bllllon lndusLry conslsLlng wlLh 1300 manufacLurlng
companles broken down as follows:
!"#$$ &'() * +, -"#./$ 0 /+ &+/#"
1#")$ 23$
456"7
!"#$#%"&$' )"'*+,- ./. 01234 .566.132
7'"8 )"'*+,- .90 ..19:4 .;520:19;
<%') = ->++# .69 .91.:4 235?:21:9
@>+,)"A",)+,- /99 .61?:4 0536.1/.
B&C+D#%"& )"'*+,- ;32 9;12:4 /;5.2?1./
&+/#" .23. .331334 695/9612;

Source: lasLlc news, Crane CommunlcaLlons, lnc.
1he world plasLlcs 2!"+,00'() $/+3'(,!4 '(&.0#!4 ls a $19.8 bllllon lndusLry (Source: lreedonla markeL
share reporLs ) conslsLlng of exLruslon equlpmenL, reacLlon ln[ecLlon moldlng (8lM) equlpmenL,
roLomoldlng equlpmenL, rapld proLoLyplng equlpmenL and up sLeam & downsLream" manufacLurlng
machlnery lncludlng baLch mlxers, gravlmeLrlc & volumeLrlc feeders, dryers, conveyers, granulaLors,
conLrol sysLems, sllde gaLes & dlscharge componenLs, color maLchlng & monlLorlng equlpmenL and
mold monlLor vlslon sysLems Lo name [usL a few.
,F=54C ,1>4=
WlLh Lhe sysLem sales" experLlse of our new reglonal sales manager Lhe posslblllLy of developlng
parLnershlps wlLh oLher upsLream and downsLream auxlllary equlpmenL manufacLurers, noL only ln Lhe
4

roLomoldlng lndusLry buL Lhe enLlre LhermoplasLlc compoundlng lndusLry could be of slgnlflcanL value Lo
our fuLure sales growLh sLraLegles. As a maLLer of facL, of Lhe Lop 7 SlC lndusLry companles ln Lhe 8eglon
6 LerrlLory, Lhere are 3 plasLlc -relaLed SlC companles wlLh numbers as follows:
,(G '4=H26@56?7 (7DA=52F
I ?B
G?C@1764=
3089 lasLlcs roducLs, noL Llsewhere Classlfled lasLlc 660
421 Sawmllls and lanlng Mllls, Ceneral Mlneral 208
2099 lood reparaLlons, noL Llsewhere Classlfled lood 124
2821 lasLlcs MaLerlals, SynLheLlc 8eslns, and nonvulcanlzable LlasLomers lasLlc 82
2842 SpeclalLy Cleanlng, ollshlng, and SanlLaLlon reparaLlons Chemlcal 82
2899 Chemlcals and Chemlcal reparaLlons, noL Llsewhere Classlfled Chemlcal 68
3086 lasLlcs loam roducLs lasLlc 60
1he global demand for plasLlc processlng machlnery wlll cllmb 4.7 percenL annually Lhrough 2012. Chlna
wlll posL Lhe largesL galns and clalm nearly one-fourLh of demand. (Source: lreedonla markeL share reporLs)
;<15 6= 5<4 J1>A4 ?B 5<6= 67DA=52F 5? ?A2 KA=674== C?D4>E
1he norLh Amerlcan roLomoldlng lndusLry ls approx. $1.9 bllllon ln annual sales avalls wlLh 121
companles as follows by MMl sales LerrlLory 8eglon
:
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!* & !&&'&#
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% ) %*'!&
+ ) (!'$#
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& $ !%'&(
!# " *%'##
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( ! "'$#
,-./' !* &!'+#
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3

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WlLh Lhe sales supporL of consulLanL 8ruce luller (sub[ecL maLLer experL) ln Lhe plasLlc mold processlng
markeL our sales exposure would be enhanced. 1he Lop 10 norLh Amerlcan roLomoldlng companles are
as follows:
+"$2%,#, #/5%, &/#/ /6/'%/5%, .2"( !,7.,0#8

!"#$ %&'("#) %*+) ,+"+- !-.*&# ,"/-0 2 3'*/4
! "#$%& ()* ++( "#,$$#-.),) /0 !! !12*22
& 3)#$, 456* "#7#$-89 : : $ ;( !< !==*22
< 07,>9 ?? 45>@-#,9 $- 456* ")@#A B$$,C9 $: > DE !& !!2*22
= ;),F$-6) 456* "#* G)59 C769 @- D; H !22*22
1 "5I>$, 45>@-#,9 $- 456* +9 56): 5 ;J = K=*22
H ($5#,) 456* ;),#A +9 .$,#I 4E H LM*22
M N,)O$5- ;),#A EO$,9 67 ")@#A G$5> 4; !! L1*=2
L P)#)59 6- D75@C76#@,9 5? 456* ()OO$,6$ (9 #I (/ = L1*22
K +9 ##: $ 39 Q$- ()* 0@>-)5 /0 !! H1*22
!2 B$5 07,#)? 45>@-#,9 $- 456* 0)-%$,- 4E H =1*H2


1he Lop 3 sLaLes wlLh Lhe mosL roLomoldlng companles lnclude:
Chlo 14
Callfornla 11
lndlana 11
MlnnesoLa 11
Wlsconsln 7

34
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1he currenL domesLlc roLomoldlng lndusLry does noL appear Lo be large enough Lo forecasL a slzable
amounL of mlxer sales wlLhln Lhe nexL 3-4 years. Powever, Lhe consulLanL can advlse furLher on Lhe
opporLunlLles. 1he lndusLry ls currenLly noL overly compeLlLlve. lL Lakes a slzable caplLal lnvesLmenL Lo
compeLe. 1he lndusLry conslsLs of a small group of large processors (wlLh lnLernaLlonal Lles) LhaL conLrol
Lhe greaLer share of Lhe markeL (80/20 rule).
Powever, Lhere are cerLaln facLors such as Lhe prlce volaLlllLy and expecLed prlce lncrease ln reslns, Lhe
forecasL ln fuel lncreases, and lower operaLlng cosLs assoclaLed wlLh roLomoldlng Lo lndlcaLe lL wlll
conLlnue Lo be a growLh lndusLry.

1he roLomoldlng lndusLry ls forecasL Lo lncrease subsLanLlally ln Asla, speclflcally Chlna and lndla (as
explalned laLer.)
9"$2%,#, %'0#0 "- !"#"$"%&'() +"$2/(',0 /(& +"$2,#'#'6, $':,! +"$2/(',0 '(6"%6,& '( #3'0 '(&.0#!4 /!,
/6/'%/5%, .2"( !,7.,0#8

6

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While a few very large processors carry out their own compounding, the majority buy compounded
material either from the polymer manufacturer or through an independent compounder.
Thermoplastics compounding is a relatively complex industry involving the manufacture of a wide variety
of materials. These materials often include additives such as colorants, flame retardants and modifiers to
meet a processor's requirements.
Companies that wish to grow and develop beyond the supply of simple color compounds are expanding
their product range into more sophisticated, higher-value products such as masterbatches or filled
polypropylene compounds. Servicing this sector often requires greater technical and marketing skills, and
a more international business model. At the higher-volume end of the compounding industry are
companies capable of producing more advanced technical compounds. Many of their operations have
developed from a local base, but because of their innovation and technical expertise, they have built an
international customer base.

Toll Compounding

A new market is emerging for the independent compounder somewhere between "toll" and "own
products" and in which cooperation with a handful of large customers is creating substantial volume.
nAlCS Code 323991 (CusLom Compoundlng of urchase 8esln)
!486?7 I ?B G?=L
uS 832
Lurope 700
Asla ?

Thermoplastic Masterbatches

The other strong growth-market is in thermoplastic masterbatches. For many commodity polymers,
masterbatch has replaced the use of color compounds, and a similar trend is now emerging in some
engineering polymers. The market is also driven by the overall growth in thermoplastics demand
generally, by cost pressures to replace compounds in automotive and telectronic products, and shorter
production runs to meet changing consumer and fashion trends in color and surface effects.
The only negative area which has seen a decline is in the production of larger-volume color compounds,
with these products being replaced by masterbatches. The market continues to be eroded by competing
products such as masterbatches and liquid color.
Foreign Markets
Rotomolding in China
Chinas small and largely domestic-oriented rotomolding sector has thus far had little foreign investment,
but in interviews at a recent industry conference, executives said they are looking for foreign capital and
partnerships to boost a sector they said has made some innovations but has generally been forced to
develop on its own. Industry officials said the sector has been growing, driven in part by Chinas sizable
infrastructure needs and metal replacement in the marine industry and other areas.
7

While solid data on the industry is hard to find, organizers of the 2009 China Rotomolding Conference,
held Sept. 14-15 in Wenzhou, Zhejiang province, estimate resin consumption will grow 20 percent
annually for the next five years, from a base of about 50,000 metric tons now (110.2 million pounds).
Luo Hongyu , general manager of one of Chinas largest rotomolding firms, Cixi Deshun Container Co.
Ltd. in Ningbo, Zhejiang province, said Chinas industry would like more foreign involvement.In recent
years Chinese rotomolders have developed fast, and we think now is the time to invest, he said. We
want a chance to cooperate with foreign factories. Chinese rotomolders have made good investments in
improving design and the industry has developed quickly and can meet some of the domestic needs.



Bioplastics
A new market study published jointly by European Bioplastics and the European Polysaccharide Network
of Excellence (EPNOE) at Utrecht University estimates it is technically possible to replace up to 90
percent of todays polymer consumption with bio-based alternatives.

The authors of the Project Overview and Market Prediction of Emerging Bio-Based Polymers Study
emphasize, however, that this is a technical judgment and not a market prediction.

"Bio-based plastics will not substitute oil-based polymers in the near future for several reasons including
low oil price, high production cost and restricted production capacity of biomass-based polymers", said
Patrick Navard, chairman of the governing board of EPNOE.

The studys authors point out that the bio-based plastics industry must also address the poor performance
of some bio-based materials as well as limiting agricultural land usage to avoid competition with food
production and a resulting negative impact on biodiversity and the environment.

The study considers bio-based polymers such as cellulose and polylactic acid as well as starch-based
blends and the newly emerging bio-based versions of conventional polymers such as polyethylene,
polypropylene, PVC, PET, and nylon.

8

The report calculates that, based on recent company announcements, the production capacity of these
bio-based plastics would be expected to reach around 2.3 million metric tonnes by 2013, up from 360,000
metric tonnes in 2007. However, the financial crisis means several key projects have been delayed.

European Bioplastics managing director Hasso van Pogrell said: "We should keep a close eye on these
figures. Important major projects were delayed in the years 2008 and 2009 due to the financial and
economic crisis.