Plastics and Rubber Sector to See More than $400 Million in Projects Kick Off in Third-Quarter 2015

Researched by Industrial Info Resources (Sugar Land, Texas)--The increased use of plastics in North America, particularly the automotive industry, will translate to more capital investments in the plastic sector. Industrial Info is tracking 55 active and unconfirmed capital projects in the U.S. and Canada that are related to plastics and rubber production and are scheduled to kick off in the third quarter of 2015. The projects have a total investment value (TIV) of about $440 million.

Click on the image at right for a graph detailing the U.S.-Canadian plastics & rubber sector.

Plastics now make up about 50% of the typical vehicle, and with U.S. federal mileage standards set to reach 54.5 miles per gallon in 2025, automotive makers continue to push for lighter-weight vehicles using plastics--both alone and combined with other materials--to improve fuel mileage.

The U.S. Southeast region takes the lead with a eight active projects and a TIV of $185 million, followed by 25 projects in the Great Lakes region worth $127 million.

The largest capital investment, worth $75 million, is by Polyplex Americas Incorporated, a subsidiary of Polyplex Corporation Limited (Uttar Pradesh, India), for an expansion to its polyethylene terephthalate (PET) film plant in Decatur, Alabama, which became operational in October 2013. Also, Denso Manufacturing Michigan Incorporated (DMMI), a subsidiary of Denso Corporation (Tokyo, Japan), is spending $53.6 million to expand its plant in Battle Creek, Michigan.

The Rocky Mountain region is in a distant third place with three projects set to begin construction that have a TIV of $49 million. The Northeast and Southwest regions each have four projects with a TIV of about $10 million.

Plant expansions make up almost 70% of the projects set to kick off, with a TIV of $290 million. There are 24 equipment addition and plant upgrade projects totaling about $60 million.

Grassroot projects make up 10%, mostly attributed to IRIS USA Incorporated's (Pleasant Prairie, Wisconsin) $40 million construction of a 280,000-square-foot plastic storage plant on a 30-acre site in Surprise, Arizona. Construction is scheduled to kick-off in August. Deutsch Architecture Group (Phoenix, Arizona) is the architect for this project. IRIS USA is a subsidiary of IRIS Ohyama Incorporated (Sendai, Japan).

Plastic-related projects account for the majority of the projects set to kick off, with 47 at a TIV of $389 million. The remainder are eight rubber-related projects worth $51 million, the biggest being a $24 million investment by Gates Corporation (Denver, Colorado) for an 82,000-square-foot expansion to its 418,000-square-foot hydraulic rubber hose plant in Iola, Kansas. Construction is scheduled to kick off in July.

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