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Plastics

The plastics (polymer) industry started just before WWII and produced about one million tons in 1945. By 1981 the production of plastics exceeded the production of steel. World production has risen from 27 million tons in 1975 to around 200 million tons in 2000.

The chemical industry ships about 150 million tons of chemicals and plastics by rail annually. The Gulf Coast is the major production area for chemicals and plastics. Eighty-five percent of plastics raw materials are shipped by rail. The business of chemistry is second only to the nation�s electric utilities in terms of its dependence on railroads and the size of its rail freight bill. This provides the railroad industry with $5 billion in freight revenues. Nearly two-thirds (63%) of the US industry�s rail-served production facilities (TX & LA) are captive to one railroad and lack competitive price quotations and service options. Texas has more than 200 chemical facilities across the state employing about 70,000.

Dow Chemical shipped about 3,000 railroad cars per week in 2004.

Basell also produces or compounds plastics at facilities in Bayport, Texas. Illustrating our company�s dependence on rail transportation is the fact that 100% of the polymer resins we produce at Lake Charles and Bayport are loaded directly into railroad hopper cars. These operations account for the vast majority of our U.S. production. To meet the needs of our customers around the country, Basell has invested in a fleet of more than 4,000 hopper cars. Basell ships approximately 14,000 carloads of plastic pellets per year.

Plastipak opened its first Texas plant in 1995, to make high-density polyethylene bottles for Kraft Foods Inc., which has a 670,000-square-foot plant nearby in the Dallas metroplex. The original expansion was prompted by a contract with Deja Blue bottled water, a regional brand made by Dr. Pepper/SevenUp Inc. of Plano, Texas. Several major contracts led Michigan-based molder Plastipak Holdings Inc. in Garland, Texas to ramp up expansion plans, which will triple the size of its current operation. Plastipak originally planned to double the size of its highly automated, 150,000-square-foot facility. But a new contract to supply Gatorade sports-drink bottles led the company to boost the expansion and add a total of 300,000 square feet to the site.

According to the Automotive Composites Alliance trade group, automakers used an estimated 384 million pounds of composite material in 2002. That�s a 12 percent increase from 2001, when manufacturers built parts out of an estimated 342.8 million pounds. The Alliance predicts by 2005 carmakers will use 500 million pounds of composites a year.

Although plastic resin manufacturers usually need to locate near a ready supply of natural gas as a raw material, resin processors of end-use products can locate just about anywhere. With their flexibility in location, these companies look for areas with low-cost utilities, especially electricity. Low-cost utilities played a major role in 1998 when Solo Cup opened a production facility in Twin Falls, Idaho. At 2.9 cents per kilowatt-hour for industrial users, Idaho�s power costs are some of the lowest in the nation.

Packaging accounts for about 25 percent of the plastics market and is an increasingly important material for packaging a wide variety of products. In the United States today, plastic bottles outnumber glass containers, and plastic films, alone or in combination with aluminum foil and paper, are the fastest-growing market sector. Polyethylene terephthalate, or PET plastics, are highly crystalline, strong and extremely tough plastics commonly used in soda bottles and textiles. PET plastics are also used in X-ray film, magnetic tape, packaging, film and labels.

While the plastics industry is found throughout the nation, the top 10 states in overall plastics employment are: California, Ohio, Michigan, Texas, Illinois, Pennsylvania, Indiana, New York, North Carolina and Wisconsin. However, the states with the highest concentration of plastics industry employees, and of manufacturing employees generally, are Indiana, Michigan and Ohio.

The plastics materials and resins industry concentrated on the Gulf Coast, which has abundant raw materials and excellent petrochemical infrastructure. Texas tops the list in employment for this sector.

Vinyl is the second largest volume plastic produced in the world. In 2000 in North America vinyl resin production totaled 14.6 billion pounds. Vinyl, otherwise known as polyvinyl chloride, or PVC, is a thermoplastic material, which means that it can be reprocessed using heat -- one of the keys to its versatility and wide use. Markets for vinyl expanded rapidly during the 1950s when irrigation piping made from rigid, or stiffened, vinyl was introduced to the United States. Since that time, the industry has grown and diversified steadily. In 1999, 25 million tons of vinyl were produced worldwide, making it the second largest selling plastic material. Like all plastic materials, vinyl results from a series of processing steps that convert hydrocarbon-based raw materials (petroleum, natural gas or coal) into unique synthetic products called polymers. The vinyl polymer is unusual, however, because it is based only in part on hydrocarbon feedstocks: ethylene obtained by processing, or cracking, natural gas or petroleum. The other half of the vinyl polymer is based on the natural element chlorine.

About 60 percent of all vinyl is converted into products that are used in residential and commercial building. Vinyl construction products typically are selected for their durability, ease of installation, easy maintenance and appeal to consumers. In many applications, vinyl has replaced traditional materials such as wood, copper and aluminum. Pipe applications constitute the major use for vinyl within the construction industry and range from half-inch pipe used in household plumbing to 36-inch or larger mains used in municipal water systems. Vinyl plumbing pipe resists corrosion, sediment buildup and harsh water conditions. Currently, about 3.3 billion pounds of PVC resin are used annually to make piping products.

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