By Karen Hanna
Reverberations of the war in Iran are apparent at a recycled resin supplier 6,000 miles away, as resin scarcity forces manufacturers to consider alternatives to materials coming from big petrochemical sources.
Catherine Chaplin, an account manager for Sustainable Resins, a Troy, Mich., supplier of engineering-grade resins to the automotive industry, said companies shouldn’t wait for a crisis to identify a Plan B.
“Have options in place before you need options in place,” Chaplin advised.
On March 27, she said, Sustainable Resins heard from one Tier 1 automotive customer already in crisis — it was trying to find a replacement for a resin that’s typically available on a two-week timeline after learning its usual supplier now needs 10 weeks.
For Sustainable Resins, crisis often is the catalyst for change. In addition to supplying the automotive industry, it does business to a much smaller degree with consumer-products makers for commodity resins, including PE, PP and HDPE.
The company has seen dramatic upticks during previous periods of disruption, including the previous recession; over the COVID-19 era, business for the company grew 92 percent, said Chaplin, who served as CEO prior to Sustainable Resins’ sale to parent company CrossPoint Polymer Technologies.
“Typically, when the virgin market gets disrupted like this, it’s the best opportunity for recycled to shine. We tend to thrive in chaos; it’s these times when resin buyers have true motivation to diversify supply and we can swoop in with products with proven history and major commercial appeal,” said Chaplin, who characterized the company’s goal as “getting people out of a pinch.”
She said inquiries about Sustainable Resins’ offerings have increased since the war began more than a month ago, but business hasn’t swelled as it did during the pandemic.
She said the war has shrunk the margins between prices for its recycled automotive resins and virgin material. However, recycled commodity resins still carry a premium, even as prices of virgin materials climb.
Having a local source for materials can be an advantage for manufacturers concerned about the global supply chain, she said.
She said Sustainable Resins has at least a half-dozen sources for each of the resins it offers. A vetted supply chain of post-industrial and post-consumer feedstock and rigorous testing ensure that the resin performs as expected, and Sustainable Resins works with both its suppliers and automakers to certify its materials.
“We've never run out of material ever on a program. So, capacity is really not a concern, even in these crisis situations,” she said.
At one point during the pandemic, Chaplin said her company needed only two weeks to transition a manufacturer to recycled resin for a BMW project, after the company’s normal supplier invoked its force majeure clause.
Whether they’re concerned about price or quality, or simply battling inertia, companies that depend on virgin resin have every reason to keep their options open, Chaplin said — especially in times when the global markets are in turmoil.
Her company is standing by to prove to prospective customers they can count on it.
“It costs less, it's good for the environment, and it helps your company achieve its goals. It helps you look good. It helps you towards whatever your ambitions are, either as an engineer or as a purchasing representative within your company,” she said. “Lower cost; it's a minimal risk.”
