- 06 January 2006 -
Review & Forecast: Platers Must Adapt to Changing Market Conditions to Survive
By Milt Stevenson, Sr., CEO and founder, and Milt Stevenson, Jr., Chief Technology and Environmental Officer, Anoplate Corp.
Unprecedented inflation strained economic gains in 2005. Metal prices continued to rise coupled with metal shortages due to increasing global demand, particularly in China and the greater Pacific Rim. Utility prices have skyrocketed, increasing 50% from 2004 to 2006. Both electric and particularly natural gas will continue to drive up the cost of sales. Battening down the hatches to benefit from solely internal efficiency gains can't possibly offset the onslaught of unprecedented inflation expected to continue to rise well into 2006. Prices will have to increase and be passed on to our customers.
State of the Industry: Where Do We Stand? |
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As if our industry hasn't seen enough from local municipalities, state and federal mandates, we face a deluge of European environmental directives so familiar they've become known simply by their acronyms: RoHS, WEEE, and ELV. To our industry, their aim is to eliminate use of hexavalent chromium, cadmium and lead in all products destined for the European marketplace. Given the overall size of the European Union market, no global manufacturer is willing to give up on that opportunity. So we all must comply or face the real potential of giving up significant portions of today’s business.
Another divisive initiative, more prominent in some EPA regions than others, is a clandestine drive to force all remaining job shop electroplaters regulated under the Part 413 electroplating categorical effluent limits to meet the more stringent Part 433 metal finishing limits. Anoplate found itself in this inevitable position in 2004, resulting in radically reduced effluent limits virtually overnight.
To hold your own today, regardless of any aspirations of growth, every plater needs to broaden its market reach. For example, in 2005, Anoplate received or shipped products to three continents outside North America. While much of the media’s attention has been on the outsourcing of jobs from the U.S. and the demise of the U.S. auto industry, off-shore auto manufacturers are investing heavily in North American factories and other industries are following their example. Jobs are coming back and will do so in the future. Globalization isn't about losing jobs, only redistribution of them.
As commodity work has gone off shore, the basic finishes of zinc, nickel chrome and straight anodize have become less in demand without an accompanying decrease in availability. So, too, has finishing for particular industries become specialized to the extent that trivalent chrome finished zinc with an organic sealer—which meets the automotive industry’s demand for 1,000-hour salt spray—won't work in electronic applications due to the high electrical resistance of the sealer. Not only are processes driving firms to target specific industries, quality systems such as Nadcap for aerospace, ISO/TS 16949 for automotive and TS 9000 for telecommunications are furthering the need for specialization.
Review & Forecast compiled by Greg Valero, Editor and Publisher.
