Plexiglass is a hot item all of a sudden, as the need for social distancing and protection has increased. That’s meant a huge uptick in business for Columbus, Ohio-based Plaskolite.
The rush of calls started in mid-March. As the coronavirus pandemic logged its first thousand cases in the United States, hospitals were in desperate need of face shields for protection. So manufacturers turned to Plaskolite, the nation’s largest manufacturer of thermoplastic sheet, the glass-like material needed for the production of face shields.
“There were practically no face shields in the country; the supply was just not there, so there was a major, major rush to manufacture the product,” says Mitch Grindley, Plaskolite’s executive chairman. “Clearly, the need outweighed anything else that we were running at the time, so we took two of our plants, adjusted our lines and started cranking them out as fast as we could.”
A couple of days later, Grindley says, the rush was amplified. But, this time, it was orders for clear acrylic barrier sheets that were piling in. One of the first big orders came from Walmart, which needed the sheets installed between cashiers and customers. Coffee shops and small restaurants quickly followed suit. And all told, orders are up six-fold since March, Grindley says. “It basically has not stopped.”
Founded in 1950, Plaskolite got its start producing hula hoops and fly swatters but has since grown to be a leader in the roughly $4 billion market for acrylic sheet, also known as plexiglass. Last year the company, which is majority owned by billionaire Anthony Pritzker’s Pritzker Private Capital, did an estimated $650 million in sales. Now, with demand for its plexiglass soaring, Plaskolite’s ten manufacturing plants, which were already operating on a 24/7 basis, have ramped up production to nearly 100% of capacity—producing enough resin weekly for about 3 million face shields and enough sheet for 200,000 barriers. Even so, they’re facing a backlog of at least 15 weeks for every product they manufacture.
Demand for face shields could normalize by the end of year, Grindley says, but he’s not so sure the booming market for acrylic barriers will wind down anytime soon. In addition to the surge in demand from restaurants, retailers and offices that are slowly opening up, Grindley says more use cases and interested buyers keep popping up as nonessential businesses across the country also begin to reopen.
“Every day I come in and hear about a new application,” he says. Plaskolite is now manufacturing clear barriers installed between booths and tables at restaurants, shatterproof partitions to separate bus drivers from boarding passengers and “barrier stations” for employers to safely take workers’ temperatures at the start of shifts. The products have already made their way into retailers, casinos and courtrooms, and Grindley says he’s also received proposals for barriers between seats in movie theaters, airplanes and even dentist offices.
“It’s been a wild ride,” says Jay Smith, business director and vice president at Mitsubishi Chemical Corporation’s Lucite International, the nation’s largest producer of the chemical compound used to make acrylic glass–and Plaskolite’s exclusive supplier. Smith says the nearly complete stop in automotive manufacturing and construction had Memphis-based Lucite, which also supplies materials for those industries, initially bracing for a considerable market downturn. That quickly changed toward the end of March, when Grindley called to tell Smith of the unprecedented surge in demand for clear acrylics. “That’s when we became confident that this would be a significant shift for the market,” Smith says, “so we just started feeding the materials as fast as we could, moving barges of needed product up the Mississippi River, to Cincinnati, and then trucking it from there to the various sites that Plaskolite has.” Lucite’s sales have actually beat pre-coronavirus projections, Smith says.
Not everyone in the industry is convinced that the plexiglass boom will outlive the pandemic. France-based Altuglas, a subsidiary of competing specialty chemicals supplier Arkema, for example, says that the rising demand for its acrylic sheet is only enough to help offset declines in other segments, and that while it’s operating at capacity for these products, it doesn’t yet believe the market is sustainable enough to warrant increased investment in new lines. “I believe what we see today is the simultaneous requests of all the potential users… I think we see the peak,” says Altuglas chief Jean-Luc Béal. “We are just using our capacity to help weather the market, even if this area of the market is not the strategic area we tend to be in historically.” In late March, Arkema withdrew its 2020 EBITDA guidance, which was in line with last year’s figure of roughly $1.6 billion (1.5 billion euros). “In this fast-changing environment, this guidance is no longer relevant,” the firm said in a statement at the time.
Plaskolite’s longtime chief is less worried about the demand. “I think this is very similar to September 11 and what happened in security in airports; I see it as something that’s here to stay,” says Grindley, adding that Plaskolite is already working on a second generation of antimicrobial and scratch-resistant barriers. “Frontline workers are demanding it, consumers are demanding it, so this is something that people better get used to because it’s going to be around.”
Source: Jonathan Ponciano | Forbes