By: Karen Facemyer
President
Polymer Alliance Zone
1 Polymer Way
Davisville, WV 26142
(304) 428-1622
West Virginia’s plastics and chemical industries are becoming a major beneficiary of the shale gas boom taking place in West Virginia and the region. This topic will be underscored at the upcoming Marcellus to Manufacturing Conference (M2M Conference), taking place in Charleston on March 26-27 at the Civic Center.
Derivatives of natural gas – ethane and propane – are used to make plastics and comprise a major piece of the industry’s cost puzzle. As feedstock prices decline due to abundant gas supplies, our plastics and chemical industries become more competitive.
One need look no further than the announcement of a potential ethane cracking and chemical processing facility to recognize the benefits our gas fields – as well as our proximity to market and skilled workforce – offer West Virginia. In fact, I view this as a transformative event that will shape our state for decades to come.
Michael Taylor, Senior Director for International Affairs and Trade at the Society of the Plastics Industry, will discuss the issues shaping the global plastics market and highlight the role low cost gas is playing in the industries resurgence when he presents at the upcoming M2M Conference.
He will discuss the movement by many large manufacturing companies to move overseas operations back to America. Consider that:
- In a 2012 survey of American manufacturing companies, 37% of those with annual sales above $1 billion said they were planning or actively considering shifting production facilities from China to America.
- MIT looked at 108 American manufacturing firms with multinational operations last summer. It found that 14% of them had firm plans to bring some manufacturing back to America and one-third were actively considering such a move.
- A study by the Hackett Group expects the outflow of manufacturing from high- to low-cost countries to slow over the next two years and the reshoring to double over the previous two years.
This “reshoring” movement is being driven by a variety of factors, to include falling gas and energy costs in America, lower labor costs, the weakening of the dollar, a more flexible workforce, advanced manufacturing techniques, among other items.
As it relates specifically to plastics, the industry has historically grown faster than all manufacturing, which positions it well for more American growth. During the first six months of 2013, U.S. plastics industry exported goods were up 1.8 percent from the same period in 2012. And we are seeing that ring true in West Virginia.
According to information released by the West Virginia Division of Commerce, our state’s plastics industry maintained its position as the second leading export product in in 2012, accounting for just over ten percent of all state products exported. This sector accounted for over $1 billion in total goods exported and demonstrates the degree to which the plastics industry helps drive West Virginia’s economy.
West Virginia products were sold to 139 countries in 2012. The top 10 markets for the state’s plastics products are China, Canada, Belgium, Japan, Mexico, Korean Republic, Hong Kong, Germany, Brazil and the Netherlands.
The Polymer Alliance Zone – an economic development organization that works to market the plastics industry in Wood, Mason and Jackson Counties of West Virginia specifically and to recruit plastic-related companies to locate in the state – will continue our efforts to facilitate the growth of this vibrant industry.
With the development of our region’s shale fields, and moderately priced natural gas, West Virginia is becoming an even more attractive location for the plastics and chemical industries.
The upcoming M2M Conference will provide information on how to take advantage of the opportunities the shale gas boom offers to our state and region. I would encourage anyone with an interest to attend.
For more information on the event, or to register, please visit, http://www.m2methaneconference.com/.
