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Sunday, April 21, 2024

Prevailing Plastics

Any given day in Evansville, drivers travel on the Lloyd Expressway in cars produced at the Toyota Motor Manufacturing Indiana plant in Princeton, Indiana. Residents wash residue from dirty dishes down the sink drain and into plastic-piped sewer lines. Lunch crowds fill branded Azzip Pizza cups with their favorite soft drink as they wait for their custom pies to cook.

These seemingly mundane activities are made possible by one of the Tri-State’s oldest and most successful manufacturing sectors. The plastics industry has long called Evansville home and relied on resilience and innovation to persevere through a world war, shifting manufacturing trends, and changing environmental standards — endurance that gradually earned Evansville the local moniker “Plastics Valley.”

“When you look at it, the kind of overall impact it has on the economy … it’s pretty phenomenal,” says Greg Wathen, who is retiring as president of the Evansville Regional Economic Partnership in fall 2022. “It’s kind of one of those things where I don’t think people realize the scope and breadth of the industry, and it touches on so many people throughout our broader region.”

The industry is vast in the Ohio Valley in more ways than one. Each manufacturer has its own role in plastics production, fabricating raw materials and resins, or products such as plastic bottles, piping, films, and industrial parts. Some are homegrown; others are satellite operations with one or more facilities locally. This is a competitive area for plastics manufacturers, and you’re bound to run into someone who works in the industry around town.

“(My wife and I) always talk at dinnertime about what’s going on and what customer this and customer that,” says Deavron Farmer, new business development manager for industrial applications at LyondellBasell, a global raw plastics compounder with three Tri-State locations. “And if we’re out to eat somewhere at a restaurant, we don’t want to talk about customers because chances are somebody at a table near you works in the industry.”

But does Evansville, a longtime frontrunner in plastics manufacturing, still have a stronghold on the industry? To look at our future, let’s start with the past.

Plastics in Evansville got its start with strong roots when Hoosier Cardinal was created out of Hoosier Lamp and Stamping by Thomas Morton Jr. in 1936

Building an Industry

Vanderburgh County Historian Stan Schmitt describes Evansville’s plastics industry as a family tree, with the first branch being Hoosier Lamp and Stamping.

A “new thing coming out of Germany,” Schmitt says, was a process called injection molding. It first was brought to Evansville in 1935 by Thomas Morton Jr., owner of Hoosier Lamp and Stamping, which produced metal refrigerator parts, such as ice cube trays. A chance meeting with Jack Bauer, whose father owned a machine company in Springfield, Ohio, sparked an idea: Morton could make ice cube trays and other refrigeration products out of plastic using injection molding. After buying a German Isoma plastics injection molding machine, he was in business and founded Hoosier Cardinal in 1936 to focus on plastics. The shelf stud he made for Sears Roebuck’s Coldspot refrigerators was the first application of high-volume injection molding in the U.S.

“Hoosier had the second (machine) in the country,” Schmitt says. “Ford Motor Company had the first there, so he’s (Morton) as low to the ground floor as you can get with a business.”

Morton’s partnership with Bauer remained strong as Hoosier Cardinal slowly chipped away at plastic’s reputation as a cheap product and began replacing metal parts in the refrigeration and automotive industries. Together, the duo created a new plastic process called “See-Deep,” which resulted in a three-dimensional and multi-color product.

But unlike the rainbow of choices we have when buying plastic products such as PVC pipe and even those yellow Azzip cups, coloring plastic was a difficult, elusive process at the time. Hoosier Cardinal turned to another longstanding local company for help.

Founded in 1903 by Harry D. Bourland, Red Spot Paint & Varnish engineers led by Milton Thorson swiftly developed a paint that would adhere to plastics in the late 1930s. But just as local plastics was gaining a foothold, America entered World War II, and the board was erased again.

“World War II starts, and you’re looking for substitutes,” Schmitt says. “Hoosier Cardinal was one where they had expertise and a thing that was still really new. Because of their molding experience, they are making all kinds of stuff for the military. You can go down the whole list of Air Force bombers, the gun turrets, the observation domes — they all switched from glass to plastic.”

As the war ended, the industry again was looking for its next big thing. The local plastics workforce had grown exponentially, and metal still was in short supply. Schmitt says the common misconception of plastic as a cheap alternative had finally fallen to the wayside, and the industry quickly turned back to its automotive and refrigeration roots.

Branching Out

In 1944, plastics crossed the Ohio River when Tri-State Plastics was founded in Henderson, Kentucky. Back in Evansville, Kent Plastics opened in 1945, and Kusan Plastics in 1946. The next decade saw a domino effect of growth, with the oversized workforce leaving companies to start their own.

While many companies spawned off-shoots — DEHM Plastic Products and Windsor Plastics both came from Kent, and Kusan would become Sterling Engineering Products in 1987 — some expanded out of necessity.

Originally from Germany, the Schroeder family migrated in 1866 from Cincinnati to Evansville, where Adam H. Schroeder founded Schroeder Headlight Company in 1893. Incorporated in 1899 and evolving from manufacturing locomotive headlamps to electric refrigerators and then munitions during the war, the company was eventually overseen by J. Henry Schroeder.

J. Henry retired in 1946, and the company was later acquired. But the father soon grew bored with retirement and rallied his son John H. Schroeder in 1949 to start Crescent Plastics Inc. with two machines performing extrusion, a process that creates plastic parts by pushing material through a die of the desired cross-section.

Cresline Plastics, with three companies and six plants total across the U.S., is in its fourth generation of management. Richard Schroeder serves as president and CEO, while his son David works as the manager of administrative services.

After a few years of producing tubular plastic, Crescent spawned Cresline Plastic Pipe Co., Inc. in 1966 and opened its first plant in Henderson. Three companies now comprise Cresline: Cresline Plastic Pipe Co., Inc, Cresline-West, Inc., and Cresline-Northwest, LLC.

“Since that time, we’ve now got six plants all across the country,” says Richard Schroeder, John H. Schroeder’s son and president and CEO of the Cresline companies. “We service the entire U.S. and do a little bit of business in export to Canada and Mexico. We’re one of the few that can go coast to coast with our product.”

Crescent Plastics again would expand in 1973 with the creation of the Wabash Plastics Inc. plant off of U.S. Highway 41 for custom injection molding.

Plastic pipes from Cresline Plastics.

“They moved the eight (injection molding) machines over here (and) started out with 50,000 square feet,” says John C. Schroeder, Richard’s older brother and president and CEO of Wabash Plastics and Crescent Plastics. “We’ve grown … to about 63 machines and right under 300,000 square feet.”

Crescent, Wabash, and Cresline are now in their fourth generation, with John C. and Richard’s sons, Scott and David Schroeder, helping run operations as Wabash’s and Crescent’s executive vice president and Cresline’s manager of administrative services, respectively.

Part of the development of plastic’s enduring legacy in Evansville is how many companies have split off others. Fiberfil Engineered Plastics, another Morton-derived business, led to the arrival of DSM Engineering Plastics Inc. From Kent-derived Windsor Plastics came SRG Global in 2009. Sunbeam, a diversion from the Schroeder Headlight Company, made its Tri-State plastics debut in the 1950s. From Sunbeam, Robert Morris, also a former grain elevator owner and operator, founded Imperial Plastics in 1967, which later was purchased by Florida-based citrus grower Jack Berry Sr. and renamed Berry Plastics in 1987. Saudi-owned SABIC Innovate Plastics acquired GE Plastics in Mount Vernon, Indiana, in 2007.

This complex web of development was made possible by the diversity of the companies’ processes and products. In the plastics industry, there are compounders (the makers of raw plastics) and processors (manufacturers of plastic products and parts from raw materials). Deavron Farmer and his family have supplied raw material to plastics companies since his father, Charles, entered plastics in 1964 working for Fiberfil.

Charles later formed Replas with Ray Wright, Jim Pender, and Marcia Frey in 1984. Farmer joined his father at Replas in 1996; 22 years later, now operating as The Matrixx Group, the company underwent its first acquisition to become Citadel Plastics, and most recently was sold to LyondellBasell in 2018.

Decades of cutting-edge innovation have helped Evansville’s plastics manufacturers navigate what now is of the world’s leading industries, and many economic and industry leaders credit our humble region as the birthplace of modern plastics.

“I still feel that the Southern Indiana/Illinois/Kentucky region right here, the little Tri-State area that we’re in, for me, still hold(s) the moniker of ‘Plastics Valley,’” Farmer says. “There are still more people in the Evansville, Henderson, Mount Vernon, Tri-State area here. There are more plastics companies than any other location I’ve been in. I don’t think there (are) a lot of places on the Earth that have more independent companies making plastic than this area right here.”

Led by President and CEO John C. Schroder and his son, Executive Vice President Scott Schroeder, Wabash and Crescent Plastics continue to thrive in the Tri-State and beyond. Joe Barker, Wabash vice president and plant manager, oversees the company’s first plant, which opened in 1973.

Global Reach

As of 2020, there were 45 overall plastics businesses in the Evansville-Henderson Metropolitan Statistical Area, which includes Vanderburgh, Posey, Warrick, and Gibson counties in Indiana and Henderson County in Kentucky. In the larger Bureau of Economic Analysis region of 24 counties in the Tri-State, there were 72 plastics businesses in 2020.

One of the newer companies in Evansville is Vidal Plastics, founded by Alfonso Vidal in 2013. Vidal originally didn’t have a desire to start a plastics company here, but knew he wanted to start his own business. The Venezuela-born entrepreneur arrived in Evansville 25 years ago after fleeing his home country to escape Colombian guerillas who had briefly kidnapped him, and what was supposed to be a three-month stay has turned into a quarter century for Vidal.

“It has been a good industry for this area,” says Vidal, who started in the industry as a resin sales engineer for Omni Plastics. “It’s centrally located. There’s a lot of expertise in the labor force and with the subcontractors. Every plumber (and) electrician, they’ve dealt with plastics and that equipment, and they’re very familiar with it.”

Founded in 2013 by Alfonso Vidal, Vidal Plastics sells its compounded polypropylene plastic material (known commonly as plastic pellets) internationally. The plastic pellets are then melted down by injection molders and extruders and developed into new products such as cups, pipes, and furniture.

Initially established as a holding company for a resin distributor in Mexico, Vidal Plastics later formed its own plastic compounding organization for prime and recycled polypropylene. The compounded material, molded into plastic pellets, is used in a variety of injection-molded products, such as plastic food packaging, machinery parts, and furniture.

Eighty percent of the raw material used to make the pellets comes from recycled plastics. The rest is made through prime compounding, the process of incorporating additives and modifiers into polypropylene, which is melted together and cooled to produce the pellets.

“The plastic industry is pretty large, and there (are) a lot of resins, a lot of niches, a lot of things that you can do,” Vidal says. “So essentially, we take polypropylene, and we add certain things to enhance it. We do a lot of recycling, so we take that and turn it back into pellets.”

The compounded plastics material made at Vidal Plastics ships across the world to processors, one of which is Wabash Plastics, which quickly branched out from injection molding parts for its sister company Cresline Plastics into producing parts for other original equipment manufacturers. Today, many of the companies’ 63 injection molding machines produce 2K parts that are molded using two different materials.

Plastic parts from Wabash Plastics.

For years, Wabash’s dominant customer was Whirlpool Corporation, which had a refrigerator factory in Evansville for more than 50 years before moving operations to Mexico in 2009. Though Whirlpool still is one of Wabash’s primary customers, its business has declined locally. But Wabash continues to grow as an injection molder for international appliance manufacturers like Carrier and GE.

At Cresline, the company specializes in plastic pipe extrusion. Its largest markets are residential homes and irrigation systems.

“We find it in some of the major ballparks in the country. St. Louis has it in their (Cardinals baseball) stadium,” Richard Schroeder says. “Baltimore has it (at the Orioles’ baseball stadium, Oriole Park at Camden Yards). A lot of the really high-end vineyards in California and in Washington use our pipe.”

Now in its fourth generation, Cresline supplies markets coast to coast, and has made its mark on the industry.

“To give you a ‘gee whiz’ kind of number, if you took out the amount of pipe we make in one given year and laid it out end to end, it would circle the Earth more than five times at the equator,” Schroeder says. “So you have to wonder where all that pipe goes.”

Perhaps no company has epitomized the worldwide reach and expansion of Evansville’s “Plastics Valley” influence more than Berry Global. Berry is now an international, publicly traded Fortune 300 company. It employs 47,000 people at more than 300 locations across the globe; to emphasize its expansion far outside its River City roots, in 2017 the company changed the word “Plastics” in its corporate name to “Global.”

One of the largest plastic manufacturers in the world, Berry Global is an industry leader in innovative in-house product design, manufacturing techniques, and sustainability efforts to transition to a more circular economy. The Fortune 300 company, headquartered in Evansville, recently partnered with Wendy’s restaurants and LyondellBasell to produce plastic cups with stronger recycling capabilities, with the goal of diverting about 10 million pounds of waste from landfills in the first two years.

Building its worldwide reach through 40 years of acquisitions and the subsequent addition of newer technologies beyond packaging, Berry Global is now one of the largest plastic manufacturers in the world, fabricating products people use every day such as snack packaging, cups, bottles, inhaler packaging, and dairy containers. The company molds plastics for more than 18,000 global corporate customers, expanding on its role as a manufacturer by acting as a consultant using integrated design techniques through its in-house Blue Clover Studios.

“This little company that started in Evansville really has a global impact today,” says Bill Norman, Berry Global’s president of consumer products, North America. “We have an ability to share best practices all over the world and learn from one another.”

Berry Global worker sorts plastic cups at their headquarters in Evansville.

“We can sit in rooms with our largest customers, and we’re their consultants,” adds Norman, an Evansville native who started on Berry’s production line 30 years ago. “It’s clear that we have an edge in terms of our knowledge of what’s happening in the markets and how we’re going to face the future and how it affects them.”

Overall, plastics account for the second-largest manufacturing sector in Evansville’s five-county MSA with 5,634 employees.

The sector is behind only automotive manufacturing at 7,382 employees.

The plastics industry in the local MSA region generates more than $1 billion in sales annually, firmly cementing its status as one of the Tri-State’s largest revenue generators. Among the publicly traded companies that operate locally, Berry Global (BERY) trades at $54.65 per share and LyondellBasell (LYB) at $104.45 on the New York Stock Exchange, as of press time. SABIC common stock trades at $115 per share on the Tadawul Exchange, as of press time.

Plastics in the Future

As the plastics industry steams toward its 90th year in Evansville, Stan Schmitt says the local industry and, more importantly, the local workforce are holding strong.

“It kind of helped the continual growth as some of the auto and refrigeration started tapering back and disappearing,” he says. “You didn’t have this close and this close, and everybody in Evansville go, ‘Ah! We have no jobs.’ You were switching something, and Evansville has done that forever. Evansville has gone through a whole series of history of what the main industry is here.”

Locally, Berry Global has three production facilities in Evansville, plus locations in Princeton, Indiana, and Madisonville, Kentucky. The company has partnered with local recyclers and the state of Indiana to implement innovative technology for plastic recycling, investing in its continued sustainability initiative.

Berry donated half the funds to install a $300,000 AMP Robotics Cortex high-speed system to sort No. 5 plastics (polypropylenes) at Tri-State Resource Recovery. Evansville is the first city in Indiana to use robotic sortation in a single-stream recycling facility.

“We see our responsibility in corporate citizenship as a great opportunity to bring our expertise and investments into the 300 local communities we serve around the world,” says Tom Salmon, Berry Global CEO and chairman of its board of directors. “Evansville is the location of our corporate headquarters, and we partner with the community to bring education and investments supporting the growing urgency of the world’s commitment to a net-zero economy.”

Recently, the company has partnered with Wendy’s restaurants to launch clear, all-plastic drink cups containing mechanically recycled post-consumer resin made by LyondellBasell as part of the company’s commitment to sustainability packaging. The goal is to divert 10 million pounds of waste from landfills over the first two years of operations.

This commitment includes using alternative sources to achieve similar properties through mechanical recycling, chemical recycling, and renewables. The goal is to evolve away from petroleum oil and toward bio-based alternatives. By 2030, company officials say 30 percent of plastics used in Berry’s consumer goods packaging will be through this circular economy, relieving more than 600 million pounds of plastic from landfills and oceans each year.

“The plastics sector is constantly innovating and evolving. And plastic has a vital role to play in moving a circular economy forward,” Salmon says. “Understandably, people have biases about plastics’ role in transitioning to a net-zero economy and we want them to understand how investments and substrate innovation are progressing faster than ever before.”

While there are pockets of plastic producers in other places such as California and Texas, the Tri-State still holds up today as the world’s original Plastics Valley.

“I think it’s important that Evansville stay in the mix because we’ve got the longevity, the history, the folks that have been doing this, like me, second generation,” Farmer says. “We’ve got people in the industry whose parents were in the industry all here in Evansville … I think there’s going to be more jobs. There’s going to be more opportunity and more growth in the plastic industry than any other industry we have immediately available to us in this region.”

Pipes leave Cresline Plastic Pipe Co’s plant in Evansville.

Plastics’ Economic Impact

Accounting for nearly one million jobs in the U.S. and $395 billion in shipments in 2021, plastics is the eighth-largest industry domestically, according to the Plastics Industry Association, and accounts for an even larger portion of the economy worldwide. The industry has global reach, and Evansville plays a major role in its growth and innovation in the world.

In the past 10 months, both average annual wages and total employment were up in the local sector. The average wage per worker in area plastics is $65,103, above the national average of $63,603. The industry’s location quotient, a measurement of concentration in comparison to the nation, is 10.13.

“This means we are 10 times larger in terms of our plastics than anywhere else in the country,” says E-REP president Greg Wathen. “I think we’re going to continue seeing this industry being one of those drivers for the region.”

The plastics industry has continued to grow in the region as more and more products utilize the material, especially as the benefits of its circular use become clear.

The area has remained a manufacturing hub in the country, even as companies like Whirlpool and Chrysler have left.

“These companies, even the ones that are not headquartered here, have such a large presence,” Wathen says. “Then looking at companies, whether it be Wabash Plastics and all these impressive plastic companies — just the fact that we have this sector is so incredibly important, and you saw it during the pandemic in particular. It’s one of the sectors that was essential.”

“When COVID hit and we shut down everything and as we were coming back, our MSA was the fastest coming-back MSA in the state of Indiana, primarily because of our manufacturing presence,” he adds, “and that includes plastics.”

Plastics’ Environmental Impact

The national demand for plastics — production was at 35.7 million tons in the U.S. in 2018, according to the EPA — is expected to triple by 2050, according to investment firm Closed Loop Partners. The 2019 report also estimates almost 90 percent of plastics worldwide will eventually end up in a landfill, incinerator, or oceans, and the EPA says plastic was 12.2 percent of 2018’s municipal solid waste.

The plastics industry, specifically single-use products, generates criticism for its disposability, and it begs the question about the Tri-State’s plastics stronghold. Locally, the industry is working not only to shift perceptions but make tangible changes to manufacturing processes and products to achieve sustainability.

Wendy’s cups made by Berry Global.

“I have to remind people all the time (that) in the grand scheme of things, plastic is still fairly new as compared to wood, paper, iron, copper, bronze,” Deavron Farmer says. “They’re really jumping on this opportunity to do better and see if they can come up with some better ideas.”

Most recently, the plastics industry has adopted ISO Standard 14044, which is a Life Cycle Assessment calculating the numerical value for the carbon footprint of a given plastic.

Cresline CEO Richard Schroeder sits on the board of the Green Globes Initiative, a green-building certification program. Berry Global is a founding member of the Alliance to End Plastic Waste, a worldwide organization committed to ending plastic waste in the environment.

Individual businesses also are adopting their own internal techniques. Cresline, Wabash, and Crescent plastics companies recycle about 99 percent of their scrap. Much of their initial product is also reprocessed.

Farmer says LyondellBasell is starting to polymerize used oil and vegetable oil instead of traditional crude.

As part of a partnership with Berry Global, LyondellBasell is using mixed post-consumer material for single-substrate, clear plastic drink cups for Wendy’s restaurants. The initiative is expected to eliminate about 10 million pounds of plastic waste from landfills in the first two years.

Berry also has committed to cutting 25 percent of absolute operational Scope 3 GHG emissions by 2025 from a 2019 baseline.

Plastic also has become more durable and long-lasting over the years. Cresline Manager of Administrative Services David Schroeder says this allows products such as the company’s PVC pipes to function for a longer time than other raw materials. Farmer says plastic is also optimizing the products it supplements.

“One of the reasons why you can buy a car today that can get 30, 40, 45 miles to the gallon is because it’s not one huge hunk of iron,” he says. “We’ve light-weighted the vehicle.”

Jodi Keen
Jodi Keen
Jodi Keen is the managing editor of Evansville Living and Evansville Business magazines.

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