Plastic converters and suppliers assemble for showdown talks amid “unprecedented” supply chain issues

04 Feb 2022 --- Plastic converter trade associations and suppliers are meeting to discuss strategies to deal with force majeure disruptions, which have wreaked industry chaos throughout the past year. Next month, a webinar will be held for over 600 European polymer players to discuss how to overcome “unprecedented” supply chain issues. 

The meeting will be hosted by the European Plastics Converters (EuPC) trade association and its sister organization Polymers for Europe Alliance (PEA).

Ron Marsh, PEA’s chairman, tells PackagingInsights industry is still reeling from a year of forces majeures, with 91 disruptions recorded in 2021, many of them COVID-19 related. 

“The forces majeures, which have disrupted the plastics supply chain in 2021, have been many and varied. Causes ranged from supply problems to production outages to hurricanes and explosions,” he explains. 

Last year, disputes erupted as polymer producers incurred surcharges on plastic converters due to rising energy costs.

“In the end, the suppliers must improve dramatically in order for the converters to have a chance to support the needs of the market. Ultimately, the parties will either flourish in Europe or fail together,” stresses EuPC.Energy costs are dividing European plastics players.

Bridging the plastic gap 
The webinar meeting aims to help the plastics value chain prepare for continued trouble and establish strategies to avoid future conflict. 

“The converters need the financial heft of the suppliers, and the suppliers need the demographic – and therefore political – leverage of the converters to capitalize on what should be seen as a great story about how the plastics industry helped to fight the global fight against COVID-19,” says Marsh. 

“If industry is divided against itself, the focus will justifiably be on inadequate supply of key materials at critical times, excessive pricing generating unreasonable returns for some upstream materials, and over-extended and inefficient supply chains.” 

EuPC says it hopes that by listening to the plans and learnings from recent events, industry will be able to identify some positives that will enable it to learn collectively from “the unhappy events of recent years” and “improve our mutual prospects for the future.” 

Uncertainty ahead 
While plans of unification and agreement at the webinar are in industry’s highest hopes, Marsh warns conflicting viewpoints remain a reality. Unity between suppliers and converters is essential in preserving the European plastics industry, stresses EuPC.

“The webinar should focus on the lessons of the last two years and how the European plastics industry as a whole can best prepare itself for the future. It would be presumptuous and premature to predict the exact views that will be expressed until after the meeting.” 

“Speakers will obviously have the opportunity to express themselves as they see fit. Having said all this, the relative decline of the European plastics industry against global competition has been evident for many years,” he continues. 

With turmoil and disunity in the European market, fears abound that many plastics converters will simply move to cheaper markets, which could mean a rise in the use of more energy-intensive conversion methods such as coal power, posing further threats to industry efforts at lowering its environmental footprint. 

“This [webinar] is an opportunity to consider the consequences of allowing this trend to continue. Nobody would pretend that reversing the trend will be easy,” Marsh concludes. 

By Louis Gore-Langton