Orange County Planning Division– Outlook May 2012 1

ECONOMIC OUTLOOK ORANGE COUNTY

Introduction

Plastics was the topic of conversation last month when Orange County

successfully hosted the NPE2012 plastics exposition, which attracted more

than 1,900 exhibitors and 55,359 plastics professionals from all over the

world. The NPE is one of the largest industrial tradeshows in the country

and serves as a showcase for the latest plastic and resin manufacturing

technologies. Besides demonstrating the capacity of the County’s

convention and tourism industry, this event could also serve to attract

plastic companies to our area. The prospects are promising, as

manufacturing exports are leading the US recovery (Istrate & Marchio,

2012). Moreover, after years of decline, the Plastics and Rubber Industry

grew 3.5 percent during the past two years (Helper, Krueger, and Wial,

2012). To take full advantage of any forthcoming opportunities, it is

important to understand the characteristics of the local plastics industry.

This brief provides an overview of Plastics and Rubber companies in

Orange County, including company types, the number of jobs, and business

agglomerations.

PLANNING DIVISION ISSUE 14 MAY 2012

Snapshot of Orange County’s Plastics Industry

The Plastics and Rubber Products subsector includes businesses engaged in the

manufacturing (NAICS 326) and distribution (NAICS 424610) of plastic and rubber

products. The local industry is comprised of 31 businesses that employ over 750

people. In addition, there are 14 companies within related industries that employ

over 400 people (Infogroup, 2011). This is a total of 45 companies that employ

close to 1,200 people.

Orange County’s Plastics and Rubber Product Manufacturing industry’s location

quotient is 0.33, which means that the majority of these establishments mainly

serve the local market (see box). However, the County has an advantage in

Plastic Bottle Manufacturing (NAICS 326160), which has a location quotient of

2.7. Another industry with export potential is the Plastic Materials Wholesalers

(NAICS 424610), which has a location quotient of 1.54. These establishments

distribute plastic resins and shapes such as rods, sheets, and film.

“Plastics… There’s a great future in plastics” (The Graduate, 1967).

What is a Location Quotient? A location quotient (LQ) is a measure of economic specialization that compares a sector in the local economy against a reference economy. They can help to differentiate between non-basic (import) and basic (export) industries. A location quotient higher than 1 implies that an industry is producing more than needed for local consumption. This surplus is exported outside of the region. On the other hand, an LQ lower than 1 reflects an industry that does not meet local demand, which fuels the need to import more of the product. To calculate the location quotient, staff uses the Bureau of Labor Statistics Location Quotient Calculator. Industries are grouped using the North American Industry Classification Code (NAICS), a comprehensive system used to group establishments into industries according to their production processes. NAICS organizes industries into 20 sectors and 1,175 industries. Staff used the nation as a reference base area to do the analysis.

AN OVERVIEW OF THE LOCAL PLASTICS INDUSTRY Luis Nieves-Ruiz, AICP

Orange County Planning Division– Outlook May 2012 2

A geocoded database provided by Infogroup, which lists over 40,000 business

records in Orange County, was used to study the local industry in detail. This

information was supplemented with internet searches to help find additional

information about individual businesses. A list of companies by NAICS sector

and their products can be found here.

Selected References Helper, S., Krueger, T., and Wial, H. Why does Manufacturing Matter? Which Manufacturing Matters? Brookings Institute, February 2012 [electronic version] Istrate, E. and Marchio. N. Export Nation 2012: How U.S. Metropolitan Areas are Driving National Growth. Brookings Institute March 2012 [electronic version]. About the Author Luis Nieves-Ruiz, AICP has a Master's Degree in Regional Planning from Cornell University and works as a Principal Planner for Orange County.

Outlook is a publication of the Orange County Planning Division. Follow us on Face book @ http://on.fb.me/K2lSDD.

Figure 1. Most Plastic businesses are located along Orange Blossom Trail, John Young Parkway, and the Florida Turnpike. Click picture for larger map.

Infogroup lists three bottling companies that produce plastic bottles for the food

and beverage industry. Besides food and beverage containers, Orange

County’s plastic manufacturers also make a variety of products, including

prepaid gift-cards, plastic tubes, laminates, foam building insulation, mold

control systems, packaging, and custom parts. In addition, the County has

other establishments that use plastic to produce custom made orthopedic

devices, adhesives, and small custom parts for the marine, aerospace, and

other industries. These companies are distributed throughout the County

(Figure 1). There are four small agglomerations of plastic companies. Of

particular interest is the Taft area, which houses the largest concentration of

plastics businesses, including two foam manufacturers, one tire retreading

company, two bottling companies, and two plastic device companies. This area

is likely to be in demand due to its proximity to the Florida Turnpike. There is

not, however, a direct connection between any of these businesses .

Conclusion

The Plastics and Rubber Industry is expected to grow because of the

renaissance of manufacturing in the United States. The importance of

manufacturing is in its exports, its capacity for innovation, and its large

multiplier effect on the economy. Orange County’s Plastics sector is

comprised of about 45 companies that employ close to 1,200 people. These

companies supply to other industries, such as food processing,

manufacturers, and packaging. Based on this economic analysis, the

County’s biggest niche strength is in the Plastic Bottling Manufacturing

subsector (NAICS 326160). This industry was recently strengthened by the

opening of the Pelliconi Group’s U.S headquarters in south Orlando.

Pelliconi manufactures plastic and metal caps, crowns, and closures for the

bottling industry. In the near future, the County could also work to attract

plastic manufacturers that supply to other sectors like defense and leisure

and hospitality. Orange County has a great future in plastics, and hopefully

the local industry will be even more vibrant when the NPE tradeshow comes

back in 2015.

Orange County Planning Division– Outlook May 2012 3

Overview of Plastic and Rubber Product Companies located in Orange County

NAICS

Sector Description

Companies

Types of Products

326113 Unlaminated Film & Sheet Mfg 1 Prepaid-gift cards

326122 Pipe & Pipe Fitting Mfg. 2 Drainage tubes for septic systems.

326130 Laminated Plate, Sheet & Shape Mfg 1 Laminates for home counters &floors.

326150 Urethrane & Other Foam Products Mfg. 3 Building insulation & carpet cushion

326160 Plastic Bottle Mfg. 3 Food & beverage containers

326199 All Other Plastics Products Mfg 9 Sheets, signs, props, & custom products

3263112 Tire Retreading & Fixing. 2 Reused car tires

326199 All Other Rubber Product Mfg. 3 Balloon sculptures, resurfacing, & water ski products

424610 Plastic Materials Basic Forms & Shapes Wholesalers 3 Variety of products

325211 Plastics Materials & Resin Mfg. 1 PET cups & lids

339113 Surgical Appliance & Supplies Mfg. 2 Custom braces & other plastic orthopedic products

423830 Industrial Machinery Merchant Wholesalers 2 Plastic materials & engineered resins

424690 Other Chemical Merchant Wholesalers 2 Adhesives from various providers

453998 Plastic Products Retailers 2 Plastic bags & packaging

332710 Machine Shops 3 Custom parts on order basis

332912 Fluid Power Valve & Hose Mfg 1 Hydraulic hoses, fittings & die cut gaskets

332919 Other Metal Valve & Pipe Fitting Mfg. 1 Industrial piping products

Source: INFOUSA

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