United States
Environmental Protection
Agency
Office Of Air Quality
Planning And Standards
Research Triangle Park, NC 27711
EPA-452/R-00-007
May 2001
FINAL REPORT
Air
Economic Impact Analysis of
Proposed Reinforced Plastics NESHAP
Final Report
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Economic Impact Analysis of
Proposed Reinforced Plastics NESHAP
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Innovative Strategies and Economics Group, MD-15
Research Triangle Park, NC 27711
Prepared Under Contract By:
Research Triangle Institute
Center for Economics Research
Research Triangle Park, NC 27711
May 2001
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This report contains portions of the economic impact analysis report that are related to the industry profile.
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SECTION 2
INDUSTRY PROFILE
Plastics are one of the most used materials in U.S. industrial and commercial activities and
contribute to virtually all products consumed from packaging to motor vehicles. Plastics can be divided
into two major groups by resin type: thermoset or thermoplastic. When additional strength is required,
many plastics can be reinforced with structural materials to produce RPCs.
In the production of RPCs, polymers and reinforcing materials can be compounded with a
variety of fillers to minimize resin requirements and additives that change the physical properties of the
desired composite. The polymer is most often a thermosetting resin and the typical reinforcement is
glass fiber. Compounding consists of mixing these various materials (sometimes in several stages) and
reforming the homogeneous mass into a usable form such as pellets, flakes, or sheets for processing into
the final product. A wide variety of RFC processes have evolved to facilitate efficient production of
many different types of composites with different physical properties. The fundamental characteristics
of the resulting composites include lightweight, high strength-to-weight ratio, nonconductivity, various
degrees of corrosion-resistance, and dimensional stability.
In 1997, 3.4 billion pounds of RPCs were consumed in the United States. The RFC market is
divided into a number of segments according to its end use. The market segments include general
aviation, aerospace, appliances, business equipment, construction, consumer goods, corrosion-resistant
products, electrical/electronics, marine, and land transportation (e.g., motor vehicles, trucks, buses).
The transportation segment was the largest consumer of RPCs with 1,095 million pounds, or
32 percent of the total consumed in 1997. The construction segment followed with 700 million pounds
of reinforced plastics consumed in 1997 (SPI, 1998).
Reinforced plastics are used in the production of many different products, as indicated by the
involvement of 42 different SIC codes, as Table 2-1 shows. The SIC codes were
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Table 2-1. SIC Codes for Potentially Affected Products
SIC Definition
2434 Wood Kitchen Cabinets
2519 Household Furniture, NEC
2522 Office Furniture, Except Wood
2541 Wood Office and Store Fixtures, Partitions, Shelving, and Lockers
2599 Furniture and Fixtures, NEC
2821 Plastics Material and Synthetic Resins, and Nonvulcanizable Elastomers
3082 Unsupported Plastics Profile Shapes
3083 Laminated Plastics Plate, Sheet, and Profile Shapes
3084 Plastics Pipe
3087 Custom Compounding of Purchased Plastics Resins
3088 Plastics Plumbing Fixtures
3089 Plastics Products, NEC
3 281 Cut Stone and Stone Products
3296 Mineral Wool
3299 Nonmetallic Mineral Products, NEC
3431 Enameled Iron and Metal Sanitary Ware
3499 Fabricated Metal Products, NEC
3531 Construction Machinery and Equipment
3533 Oil and Gas Field Machinery and Equipment
3546 Power-Driven Handtools
3561 Pumps and Pumping Equipment
3564 Industrial and Commercial Fans and Blowers and Air Purification Equipment
3589 Service Industry Machinery, NEC
3612 Power, Distribution, and Specialty Transformers
3613 Switchgear and Switchboard Apparatus
3621 Motors and Generators
3647 Vehicular Lighting Equipment
3663 Radio and Television Broadcasting and Communications Equipment
3679 Electronic Components, NEC
3711 Motor Vehicles and Passenger Car Bodies
3713 Truck and Bus Bodies
3714 Motor Vehicle Parts and Accessories
3715 Truck Trailers
3716 Motor Homes
3728 Aircraft
3743 Aircraft Parts and Equipment, NEC
3792 Travel Trailers and Campers
3799 Transportation Equipment, NEC
3821 Laboratory Apparatus and Furniture
3 949 Sporting and Athletic Goods, NEC
3993 Signs and Advertising Specialties
3999 Manufacturing Industries, NEC
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obtained from the updated 1993 EPA survey and subsequent screening for potentially affected
reinforced plastics producers.
The remainder of this section provides a brief introduction to the reinforced plastics industry.
Although the reinforced plastics source category includes only thermoset materials, this profile provides
a broader picture of the RFC industry. Section 2.1 provides an overview of the RFC production
processes, including a description of the major inputs to production and directly affected production
processes. Section 2.2 characterizes the resulting reinforced plastics products and presents historical
data on their consumption across various end uses. Section 2.3 details the costs of production.
Section 2.4 describes uses and consumers of reinforced plastics. Section 2.5 summarizes U.S.
production facilities, and Section 2.6 describes the firms that own these facilities.
2.1 Production
The basic stages of production for RPCs are compounding and processing, as Figure 2-1
illustrates. Polymers and reinforcing materials are compounded with a variety of fillers to minimize resin
requirements and additives that change the physical properties of the desired composite. The polymer
is most often a thermosetting resin such as polyester (unsaturated), vinyl ester, phenolic, or epoxy;
however, thermoplastic resins such as nylons and polyolefins are increasingly being utilized.
Compounding consists of mixing these various materials (sometimes in several stages) and then
reforming the homogeneous mass into a usable form such as pellets, flakes, or sheets for processing into
the final product.
Processing involves shaping and/or molding the compounded plastic material into the desired
final product. A wide variety of RFC processes have evolved to facilitate efficient production of many
different types of composites with different physical properties. RFC production processes can be
separated into two broad categories: open molding and closed molding. Open molding refers to
processes where the plastic resins, polymers, reinforcements, and other additives are exposed to the air
during the shaping and/or curing stages of processing. This category includes such manual contact
molding processes as hand lay-up and spray-up, as well as processes with a greater degree of
automation, such as centrifugal casting, filament winding, pultrusion, and continuous lamination. Closed
molding processes isolate the input materials inside closed molds during the mixing and curing stages.
These include more capital-intensive production methods such as match die molding, reaction injection
molding, rotational molding, and thermoforming.
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Polymers
(thermoset resins,
thermoplastic resins)
Fillers,
Reinforcements, and
Additives
Compounding
Compounded
Plastic
Material
Processing
Reinforced Plastic
Composite
VOCs
Figure 2-1. Production Flows for Reinforced Plastic Composites
Pollution releases can occur throughout the production processes. Spills of additives and
plastic pellets can occur during transport to the facility. Leaks of chemical additives can occur while the
additives are being incorporated into the plastic. Volatile organic compounds (VOCs), fugitive
emissions, and wastewater discharge are released during the actual processing of the reinforced plastic
part. The finishing operations of cleaning can also release VOCs, fugitive emissions, and wastewater
discharge (EPA, 1995).
The result of the processing stage is the final part or product referred to as a RFC. RPCs
range from small parts for toys or automotive uses to composite structures such as boat hulls,
automobile panels, or the fuselage of an aircraft. Thus, some RPCs constitute a final product such as a
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bathtub or shower stall, whereas others are intermediate products such as panels, pipes, and molding
compounds that serve as inputs to manufacturing processes and construction activities.
The remainder of this section describes the manufacture of RPCs in terms of the input materials
used, the production processes employed, and the types of products ultimately produced.
2.1.1 Material Inputs
This section describes the different types of plastic resins, reinforcements, fillers, and additives
that are most commonly used in the production of RPCs. It includes a discussion of both thermoset and
thermoplastic materials; however, EPA's RFC source category only includes thermoset materials.
2.1.1.1 Plastic Resins
There are two broad categories of plastic resins: thermoplastics and thermosets.
Thermoplastic resins become soft when heated and may be shaped or molded while in a heated
semi-fluid state. Once the thermoplastic resin is molded to the proper state, it is cooled until hardened.
In contrast, thermoset resins are usually liquids or low melting point solids in their initial form. When
used to produce finished goods, these thermosetting resins are "cured" by the use of a catalyst, heat, or
a combination of the two. Once cured, thermoset resins cannot be converted back to their original
liquid form. Unlike thermoplastic resins, cured thermosets will not melt and flow when heated and once
formed they cannot be reshaped.
Thermoplastics have certain advantages as substitutes for thermoset resins. Thermoplastics
have faster processing than thermosets because there is no curing necessary; they have low toxicity and
can be remelted and recycled. Improvements in thermoplastic resins over the past 20 years have
increased the advantages over thermoset resins. Thermoplastics have high delamination, chemical, and
damage resistance, and low moisture absorption (Berglund, 1998). The damage resistance of
thermoplastics is due to high impact strength and fracture resistance. Thermosets have better resistance
to matrix microcracking in the composite laminate, while thermoplastics have higher strains to failure
(Schwartz, 1997). Differences in the characteristics and strengths between thermosets and
thermoplastics lead to less than perfect substitution and a gradual increase in the use of thermoplastics
for reinforced plastics. Thermoplastics' share of all resins used for reinforced plastics increased by
1 percent from 1991 to 1993.
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From 1991 to 1993, thermoset and thermoplastic use for reinforced plastics increased, with
thermosets accounting for consistently more than twice the quantity of thermoplastics, as Table 2-2
shows. These figures include the weight of resins, reinforcements, and fillers. Thermoset unsaturated
polyesters accounted for roughly 60 percent of the total reinforced plastics shipped during each of these
years. Other thermosets, mainly epoxies and phenolics, accounted for an additional 7 to 10 percent of
total usage. Recent innovations in thermoplastic resin formulation have improved both their
performance properties and cost-effectiveness to the point that their use for RFC production is
increasing. Thermoplastics are widely used because of their ability to model complex shapes, their ease
of fabrication, and their cost-effective performance characteristics. As shown in Table 2-2,
polypropylene, thermoplastic polyester, and nylon account for 80 percent of the 848 million pounds of
thermoplastic resins used for reinforced plastics in 1993.
The average annual growth rate for unsaturated polyester, the most commonly used thermoset
in reinforced plastics, was 8.5 percent for the period 1991 to 1997. Over the same period, the average
annual growth rate for polypropylene, the most commonly used thermoplastic in reinforced plastics as
of 1993, was 10 percent.
2.1.1.2 Reinforcements
Most reinforcing materials used in RFC production are fibers, rovings, fabrics, or mats.
Fiberglass is the most common material used for mats, but they can also be made from asbestos, paper,
metals, sisal, nylon, or cotton. Reinforcements are used in four basic forms: (1) premixed compounds
in injection molding and extrusion; (2) woven mats in laminates; (3) preformed woven mats in spray-up
or press mold processing; and (4) prepregs, which are semi-cured woven mats impregnated with
resins. The amount of fiber reinforcement varies by resin and reinforcing fiber (e.g., fiberglass varies
from 5 to 45 percent by weight, cloth
from 30 to 70 percent, and carbon and other expensive fibers from 30 to 65 percent) (Rauch, 1991).
Using reinforcing fibers provides the following attributes to composites:
• improved tensile and flexural strength, stiffness, modulus, and impact resistance;
• resistance to crazing and cracking; and
• reduced shrinkage (Rauch, 1991).
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The relative improvement in each of these parameters is a function of the type of fiber, amount of fiber,
orientation of fiber, fiber surface treatment, and the characteristics of the matrix polymer.
Fiberglass is the most widely used reinforcement for plastics, with carbon the least used, as
Table 2-3 shows. Most reinforcement materials were made of inorganic materials, such as fiberglass
(roughly 87 percent of all fibrous reinforcements), asbestos (2.9 percent), and carbon and other high
performing/high cost fibers (1 percent). Cellulose is the major natural organic used as a reinforcement.
It represented about 9 percent of all fibrous reinforcements in 1990. A 1989 EPA ruling that will
eventually ban the manufacture, processing, and distribution of most products that contain asbestos, has
and will continue to reduce the consumption of asbestos as a reinforcement agent and thereby alter the
distribution of reinforcement materials used to make composites (Rauch, 1991).
2.1.1.3 Nonreinforcing Fillers
Nonreinforcing fillers not only reduce the cost of composites but frequently impart performance
improvements that might not otherwise be achieved by the reinforcement and resin ingredients alone.
Performance enhancements offered by some nonreinforcing fillers include easier processing
characteristics; improved mechanical, electrical, thermal, and aesthetic properties; and resistance to
shrinkage (Rauch, 1991). Fillers that do not offer performance improvements are sometimes referred
to as extenders. In comparison to resin and reinforcements, fillers are the least expensive of the major
ingredients. In general, fillers are nonmetallic minerals, metallic powders, and organic materials added
in fairly high percentages, usually more than 5 percent in terms of volume, and in some cases several
times the weight of the polymer.
As Table 2-4 shows, the majority of nonreinforcing fillers used in reinforced plastics are
inorganic, particularly calcium carbonate. In 1990, roughly 4.2 billion pounds of fillers were used in
plastics products. Nonmetallic minerals account for 90 percent of the total consumption in 1990;
calcium carbonate is the dominant mineral filler, with roughly 3.17 billion pounds used, or 75 percent of
all fillers consumed that year. Calcium carbonate is by far the most commonly used mineral filler in
RFC production. Kaolin clay offers several advantages including low water absorption, chemical
resistance, and improved electrical properties. Some calcined grades of kaolin even offer additional
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: mm- 1993a
QuQsatijtity (106 Ibs)
Plastics Res£iinforcement
Thermosettfi^te
UnsaturaMifteffesters
EpoxiesAstestos
ThermoplasfisrtSSTOSid other high performance
Polyprogyjggie
1991
1,641
1,467
174
719
205
(10° Ibs)
900
90
30
10
1,030
1992
1,792
1,552
240
757
220
1993
1,878
1,613
265
848
246
Source: Kaucn Associates, Inc.. The Ranch Guide to the U.S. Plastics Industry. Bridgewater, NJ: 1991. Table 2-12.
Nylon 173 183 206
Styrenics" 51 51 54
Polycarbonate 65 70 73
Other0 38 38 39
Reinforced plastics, total
2,360
2,549
2,726
a Reflects weight of resins, fillers, reinforcements, and other additives.
b Includes SMA, ABS, SAN, etc.
c Includes modified PPE, PPS, LCP, ketones, etc.
Sources: Society of the Plastics Industry, Inc. Facts and Figures of the U.S. Plastics Industry. Washington, DC.
September 1994.
Modern Plastics. "Resin Supply: What's in the Pipeline for '93?" January 1993.
Modern Plastics. "Resin Supply: Plotting a Course for Global Supply." January 1994.
reinforcement when added to a matrix of nylon or polyolefin resins (Rauch, 1991).
2.1.1.4 Additives
A wide variety of additives are used in composites to modify materials properties and
performance. Although these materials are generally used in relatively low quantities as compared to
resins, reinforcements, and fillers, they perform critical functions including air release, color, fire
resistance, lubricity, speed curing, static reduction, surface smoothness, thermal conductivity, and others
(SPI Composites Institute, 1995).
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Table 2-4. Consumption of Nonreinforcing Fillers in Plastics: 1990
Product
Inorganics
Minerals
Calcium carbonate
Kaolin
Talc
Mica
Other minerals
Other Inorganic
Glass spheres
Natural
Total
Quantity
(106 Ibs)
3,170
185
145
34
450
23
203
4,210
Source: Rauch Associates Inc. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: 1991. Table 2-7.
Plasticizers are the most common additive to plastics, as Table 2-5 shows. In 1990, roughly
3.5 billion pounds of fillers, were used in plastics products. Plasticizers accounted for 52 percent of
additive consumption in 1990 followed by flame retardants and colorants with 19 and 13 percent,
respectively. Plasticizers are essential for producing RPCs in some applications.
2.7.2 Production Processes
Application development in the production of composites requires careful selection not only of
which materials to use but also of the production process that can combine these inputs into the desired
form most efficiently. Table 2-6 provides data on the distribution of the volume of reinforced plastics
by process for 1990. In 1990, approximately 2.6 billion pounds of RPCs were shipped from RFC
facilities in the United States. Approximately 1.04 billion pounds of RPCs, or 65 percent of the total,
were produced using open molding processes. Hand lay-up, spray-up, and continuous lamination
processes accounted for about 62 percent of the RPCs produced with open molding processes.
Approximately 900 million pounds of RPCs were produced using closed molding processes in 1991.
About two-thirds of this total were produced using injection molding processes, with compression
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Table 2-5. Consumption of Plastics Additives: 1990
Additive
Plasticizers
Flame Retardants
Colorants
Impact Modifiers
Lubricants
Stabilizers
Organic Peroxides
Blowing Agents
Antistats
Others3
Total
Quantity
(106 Ibs)
1,810
661
456
160
112
99
47
14
9
130
3,498
a Includes viscosity depressants, mold release agents, surfactants, slip agents, biocides, antiblocking agents and
catalysts.
Source: Rauch Associates Inc. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: 1991. Table 2-6.
molding processes accounting for most of the remaining RPCs made using closed molding processes.
This section provides a more detailed description of these processes with special attention given to the
five processes that contribute most to emissions at RFC facilities. As presented below, these processes
can be segregated into open and closed molding categories.
2.1.2.1 Open Molding Processes
Open molding processes can be broken down into those that are simple, with minimal capital
requirements, and those that are more heavily automated, with higher tooling, start-up, and other capital
costs. Hand lay-up and spray-up are two contact molding processes that fit the first category of open
molding processes. These two production processes use the simplest materials, technology, and
manufacturing methods and are ideally suited for low-to-medium volume production of larger, more
complex structural shapes. Other open molding processes, such as centrifugal and rotational casting,
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Table 2-6. Reinforced Plastics Shipments by Production Process: 1990
Processing Method
Open molding
Hand lay-up, spray-up and continuous laminating
Filament winding, pultrusion, and centrifugal casting
Closed molding
Compression
Injection
Other
Total
Quantity
(106 Ibs)
1,674
1,038
636
901
360
523
18
2,575
Share of Total
(%)
65
40
25
35
14
20
1
100
Source: Rauch Associates Inc. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: 1991.
lamination, filament winding, and pultrusion processes, have much higher start-up capital costs, often in
the millions of dollars.
These processes have relatively low labor costs per unit output. Open molding processes
typically only are cost-efficient when used in mass production of uniform RPCs because of high capital
costs (SPI Composites Institute, 1995). The following sections provide more detailed descriptions of
four open molding processes that contribute to hazardous air pollutant (HAP) and VOC emissions at
the RFC production facilities—hand lay-up, spray-up, filament winding, and pultrusion (LeFlam and
Proctor, 1995).
Hand Lay-Up. Hand lay-up is one of the most common low-to-medium volume RFC
production processes. It typically involves manual application of general polyester liquid resins to a
reinforcement, such as glass fiber mats or woven roving, that are laid against the smooth surface of an
open mold. Serrated rollers or squeegees drawn across the preparation help to release any air that
may be entrapped in the reinforcement material. Chemical curing, often induced by a catalyst additive,
hardens the resin and reinforcement into a structural form that is exceptionally strong for its weight. The
resin offers a uniform matrix for the reinforcing material in much the same way that concrete does when
used in conjunction with reinforcing bars made of steel (SPI Composites Institute, 1995).
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The mold is the primary piece of equipment necessary for the hand lay-up process, as
Figure 2-2 illustrates. Prior to hand lay-up production, the mold (which is often itself a composite) is
sprayed with a tinted gel-coat and allowed to partially cure. The gel-coat side of the final product takes
on the color of the pigment used to tint the gel-coat and has a smooth surface and decorative finish,
much like that provided by a high quality paint. The appearance and texture of the other side is rough
and abrasive, unless corrective measures, such as applying a tightly woven sail cloth to the back surface
prior to curing, or sanding the back-surface after curing are performed. In most applications of hand
lay-up, only a single finished side is required (SPI Composites Institute, 1995).
Resin
Reinforcement
Figure 2-2. Hand Lay-up Processing
Source: SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc. Washington,
DC: 1995.
Spray Up. The spray-up process is very similar to hand lay-up processing. It too is best
suited to low-to-medium volume production of larger composites with complex shapes. Unsaturated
polyesters are also the most commonly used polymer, although isophthaltic polyesters and vinyl esters
may also be used. As with hand lay-up, the polymers, reinforcements, fillers, and additives are applied
to an open mold that has been sprayed with a pigmented gel-coat and allowed to partially cure.
The primary difference from hand lay-up is that the input materials in the spray-up process are
applied to the mold simultaneously, using either an air-atomized or airless spray-up gun. Both types of
spray-up guns are designed to automatically chop a continuous feed of glass fiber in lengths ranging
from 0.5 to 1.5 inches and then mix both the fiber and a user-determined amount of catalyst into a
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fan-shaped spray of polymer or polymer/filler mixture (SPI Composites Institute, 1995). This process
is illustrated in Figure 2-3.
Spray-Up Gun
' Catalyst
s/
Open Mold' /
Continuous
Roving
Reinforcement
Figure 2-3. Spray-up Processing
Source: SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc. Washington,
DC: 1995.
For some applications requiring added structural strength, more fiber reinforcement mats or
rovings can be hand laid-up between applications of the sprayed mixture. Rollers or brushes are
generally used to remove entrapped air from the mixture after it has been applied to the mold.
Twenty-five to 30 pounds of laminate can be applied per minute using some types of spray-up
equipment. This speed of application can lessen the labor input requirements relative to hand lay-up but
is somewhat offset by the need for a skilled spray-up gun operator to ensure product quality (SPI
Composites Institute, 1995).
Filament Winding. Filament winding is a highly automated RFC production process suited to
high volume production of strong surface-of-re volution composites, be they open (e.g., springs),
cylindrical (e.g., pipes), or closed (e.g., storage tanks and pressure bottles). This process is extremely
versatile, offering a wide choice of input materials. Traditional polymer choices have been dominated
by thermoset resins (e.g., polyesters, vinyl esters, bisphenol A fumarate resins, furanes, and epoxies),
but the use of thermoplastic resins (e.g., nylon, polycarbonates, and acrylic) is under development and
gaining popularity. Figure 2-4 offers a simple schematic of a sample filament winding process. The
basic steps involve drawing a continuous strand of reinforcing material through a resin bath and then
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wrapping the impregnated reinforcement around a revolving mold, called a mandrel. Depending on the
shape of the intended RFC, the mandrel can advance in one direction as it rotates (for springs and
tubular shapes) or can rotate on two axes (for closed cylinders or spheres) (SPI Composites Institute,
1995).
Laminate
Continuous Strand Roving
Mandrel
Resin Applicator
Figure 2-4. Filament Winding
Source: SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc. Washington,
DC: 1995.
The most common reinforcement material used is direct processed rovings of glass fiber;
however, the choice of reinforcement fibers is virtually unlimited and numerous reinforcement
application methods are commonly used. In fact, two or more different reinforcements can be applied
in different patterns to a single composite. The ability to vary the type, form, quantity, and orientation of
reinforcement materials as filament-wound RPCs are produced allows production designers to optimize
the trade-off between input costs and performance requirements of composites intended for a given
application. This is because they can limit the use of more costly, higher performance reinforcements to
strategic locations in the composite structure and substitute lower cost fibers elsewhere. The use of
hybrid reinforcement methods is increasingly common in filament winding processes. Limitations of
filament winding include relatively high VOC emissions and capital investment requirements (SPI
Composites Institute, 1995).
Pultrusion. The pultrusion process, shown in Figure 2-5, creates profile shapes like rods,
plates, beams, and channels by pulling continuous strands of reinforcements through a resin bath, one or
more pre-shaping guides, and ultimately through a heated shaping die where the pultruded RFC is
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cured into its permanent cross-sectional shape. The last stage in the process is the cutoff where
equipment is used to cut the pultruded profile to its intended length. Pulling is achieved using either
intermittent or continuous pulling devices. While development is underway to incorporate the use of
thermoplastic resins in pultrusion processes, at present most applications are limited to the use of
thermoset resins, primarily polyester, but phenolics, epoxies, and esters are also used. Commonly used
reinforcement materials include continuous fiber glass rovings, surfacing mats, graphite fibers, chopped
and continuous strand mats, and woven tapes (SPI Composites Institute, 1995). Advantages of
pultrusion include greater reinforcement orientation, a necessary attribute for some RFC applications,
and lower capital equipment costs than most other high-volume RFC production processes. The
primary limitations of the process are an inability to vary the cross-sectional characteristics along the
length of the pultruded composite and stress resistance that is limited to the direction of the
reinforcement material (SPI Composites Institute, 1995).
2.1.2.2 Closed Molding Processes
Closed molding processes, such as the many variants of compression molding, use pre-
prepared molding compounds like sheet molding compounds (SMC), bulk molding compounds
(BMC), and reinforced thermoplastic sheets as feedstocks to their production processes. These
molding compounds are prepared to facilitate mass production of a wide variety of composites, each
with its own special physical attributes. These compounds have the advantage of an extended shelf-life.
Each compound is produced using fixed proportions of the appropriate polymers, reinforcements,
fillers, and other additives needed to impart the specific physical properties and appearance to the
composite produced (SPI Composites Institute, 1995). This section provides more detailed
descriptions of the most common compression molding processes as well as a closed molding process
called injection molding.
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Heat Source
Continuous Strand Roving
Mat or Cloth
Resin Applicator
Pulling Device
Figure 2-5. Pultrusion
Source: SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc. Washington,
DC: 1995.
Compression Molding. There are four primary high-volume RFC production processes
commonly called compression molding processes (and many variations of these processes):
• Sheet Molding Compound (SMC),
• Bulk Molding Compound (BMC), including Transfer Molding,
• Wet System Compression Molding, and
• Reinforced Thermoplastic Sheet Compression Molding.
For each of these processes, the chosen composite materials, including all resins,
reinforcements, filler, and additives, are compressed into a desired shape in a matched die hydraulic
press under pressure ranging from 250 to 3,000 psi (SPI Composites Institute, 1995). The composite
feedstock is then held in place while the resin matrix quickly cures into its permanent hardened shape.
Significant differences among these processes determine their suitability for a given application. The
following sections offer brief descriptions of each of the main high-volume molding processes.
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Sheet Molding Compound. SMC is produced by mixing all of the composite materials,
except for the reinforcing fibers, into a paste. The paste is then uniformly spread onto two separate
"carrier films" that are fed through an SMC machine where the paste is compounded with the
reinforcements. The carrier films are held apart, one above the other, while reinforcements, cut from
continuous strand rovings, are uniformly distributed on the lower carrier film and then forced together
like a fiber reinforcement sandwich as they are fed through a system of rollers that compact and
consolidate the SMC. The SMC, with the carrier film still in place, is then rolled up and encased in a
nylon sleeve that prevents evaporation of volatiles from the resin matrix that would allow the compound
to finish curing. After a period of storage in a climate controlled area, the SMC is thickened to the
desired viscosity for its intended application and then taken to a molding press where it is cut to its
desired shape. The carrier films are then removed and the SMC permanently compressed into its
ultimate shape in a heated matched die mold (SPI Composites Institute, 1995).
SMC molding has high start-up capital costs associated with it. However, while the tooling
costs of SMC compression molding are much higher than for most other RFC production processes,
they are still generally lower than would be required to produce equally strong shapes from metal
inputs. Retooling an SMC process to modify the design of a composite is much quicker than in metal
stamp molding operation. Other advantages include the ability to consolidate many parts into a single
RFC. These attributes make SMC molding very attractive to such high-volume end users as producers
of automobiles, appliances, construction, and electrical product industries. SMC compression molding
is used to produce more composites of greater value than any other RFC production process (SPI
Composites Institute, 1995).
Bulk Molding Compound. Bulk molding compound, like SMC, is more a material than a
process. BMC generally consists of approximately 20 percent reinforcement, 50 percent fillers and
additives, and 30 percent resin matrix. The compound can be tinted to a desired color and, through
strategic selection of input materials, can be prepared to afford exceptional mechanical and fire
retardant properties. The basic process entails combining the desired composite materials into a
molding compound that resembles putty and then placing the compound into a compression mold.
Molding typically takes place at temperatures between 250 and 350 °F and at pressures ranging from
350 to 2,000 psi (SPI Composites Institute, 1995). BMC is also used in transfer molding and injection
molding processes to produce more complex shapes with closer mold tolerances than can be achieved
using matched die compression molds.
17
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The advantages of BMC include reduced costs and improved stiffness and fire retardance due
to lower reinforcement loadings and increased filler loadings. BMC can also be molded into intricately
detailed, precise shapes with inserts affixed during the molding process.
Wet System Compression Molding. Wet system compression molding differs from SMC and
BMC compression molding in that a matrix of liquid resin mixed with fillers and additives is pumped or
poured onto dry reinforcement mats that have been placed inside of the matched die mold. Thus,
unlike SMC and BMC processing, the resin is not introduced to the reinforcements prior to molding.
Hydraulic pressure is exerted on the mold, forcing the resin to permeate the reinforcement materials and
fixing, and the composite remains under pressure until it has fully cured. Typical curing temperatures
are 250 to 350 °F, much like SMC and BMC molding, but the pressure requirements are much lower,
in the range of 250 to 1,000 psi (SPI Composites Institute, 1995).
Like SMC and BMC, wet system molding can produce RPCs with two finished surfaces.
Other advantages of this process include equipment and tooling savings, due to the reduced pressure
requirements, and higher reinforcement loading, which affords superior mechanical properties. The
disadvantages of wet system molding include an inability to provide undercuts or reinforcing ribs to add
strength to the composite, higher labor costs, and more process waste than is typical with BMC and
SMC molding processes.
Reinforced Thermoplastic Sheet Molding. Reinforced thermoplastic sheet molding is quite
similar to SMC, in that the composite materials are all combined and shaped into sheets prior to
molding, but as the name implies, this process is designed for use with thermoplastic resins. Another
difference is that the sheet is cut to fit entirely within the mold and is preheated prior to placement in the
mold. When the mold is closed and pressure is applied, the thermoplastic resins start to flow and
conform to the shape of the mold. The temperature of the mold is then controlled for 30 to 90 seconds
to permit the molded sheet to solidify and permit removal of the RFC from the mold (SPI Composites
Institute, 1995). This process is sometimes called stamping, because the mold used is similar to a steel
stamping press.
Advantages of this process include unlimited shelf life for the input sheets, fast molding cycles,
recyclable scrap, and potential for parts consolidation relative to metals. Capital costs are comparable
to SMC molding. There are, as yet, few suppliers of the input sheets because this process is new.
18
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Injection Molding. Injection molding is perhaps the most versatile and widely applied process
for mass producing fairly complex composites of absolute dimensional accuracy. It can be used for
parts of any size for which a mold can be built and is ideally suited to high-volume applications. Each
compression molding machine is capable of producing thousands of detailed RPCs per hour. As
illustrated in Figure 2-6, the same equipment can be used to mold both thermoplastic resins and
thermoset resins into RPCs. The only difference is the temperature at which the resin is kept during the
curing stage of the process within the mold. This process is most commonly used to shape RPCs from
thermoplastic resins (e.g., nylon, acetal, PVC, polyethylene, SAN, polycarbonate, and ABS), which
require cooler curing temperatures, but compression molding of thermoset resins (e.g., polyester,
phenolic, epoxy and urethane) is gaining popularity (SPI Composites Institute, 1995).
The basic steps in the standard injection molding process consist of conveying granular or
pelletized thermoplastic resin from a supply hopper to an opening at the opposite end of a heated metal
— Injection Chamber (Hot)
Hopper
Mold
(Cool)
— Screw or Plunger
Thermoplastic Injection Machine
|— Injection Chamber (Cool)
Hopper
Mold
(Hot)
\SN\V-X\
• Screw or Plunger
Thermoset Injection Machine
Figure 2-6. Injection Molding
Source: SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc. Washington,
DC: 1995.
19
-------
chamber, using an auger to control the rate that the resin advances to the tip. The resin is thus heated to
a semi-fluid state melting or plasticizing the resin and can be injected into the mold at the tip of the
chamber with a twist of the auger. The mold is kept at a cool temperature and held closed while the
resin cools down and solidifies. Once the resin has solidified, the mold is opened to eject the composite
from the mold and the whole process can be restarted.
2.2 Products
There is great diversity in the types of products made using most of these processes. Among
the open molding processes, product diversity is especially extensive in the hand lay-up, spray-up, and
filament winding processes. Among closed molding processes, product diversity is greatest for the
compression and injection molding processes. Table 2-7 describes the basic shape characteristics that
are best produced by each RFC production process and lists examples of composite products that
result from each process.
2.3 Costs of Production
There are three variable inputs in reinforced plastic production: raw materials, labor, and
energy. Raw materials include plastic resins, reinforcing materials, and fillers. Labor and energy are
used throughout production as well as for final product transport.
Prices for thermoset resins have increased since 1996, while most thermoplastic prices have
fallen over the same period, as Table 2-8 shows. Among thermoset resins, unsaturated polyester and
phenolics are close in price, while epoxy has a higher price than both. PVC and polypropylene are the
least expensive thermoplastics, while the price of nylon is more than four times greater than these two.
Table 2-9 provides prices for fibrous reinforcing materials. For 1997, the price of fiberglass, the most
common reinforcement, is approximately $1.11 per pound. The price of carbon is the most expensive
and is primarily used in high performance applications ($10 to $30 per pound).
Many producers use fillers in order to minimize the amount of higher-cost resins needed per unit
output (see Table 2-9). RFC manufacturers frequently select calcium carbonate because of its relative
low cost ($0.08 per pound). Other popular low cost fillers include kaoline and alumina trihydrate
($0.05 and $0.13 per pound respectively). As noted in Section 2.1.1.4, additives are also used in
20
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Table 2-7. Compatibility of RFC Production Processes with Shape Characteristics and
Specific Products
Process
Shape Characteristic
Product Examples
Open molding processes
Hand lay-up and spray-up
Filament winding
Large, complex
Round, rigid
Uniform cross-section
Thin, flat, or curved profiles
Uniform wall thickness
Pultrusion
Continuous laminating
Centrifugal casting
Closed molding processes
Compression molding
SMC compression molding Large or small shapes can be
smoothly ribbed, embossed, or
high complex
BMC compression molding Smaller complex
Simple, thinwall
Reinforced thermoplastic
sheet molding
Boat hulls, auto and truck body parts,
swimming pools, tanks, corrosion
resistant equipment, furniture, duct work,
and equipment housings
Pressure bottles, airplane bodies,
underground storage tanks, drive shafts
for cars and trucks, sailboat masts, and
gun barrels
Corrosion resistant rods, beams,
channels, and plates
Flat and corrugated paneling, panels for
truck trailers, road signs, and refrigerator
liners
Larger pipes, tanks
Automotive body panels and front end
assemblies, appliances, air conditioner
base, office equipment housing
Air conditioner components, pump
housings, computer components, power
tools, motor parts, gear cases, circuit
board covers, garbage disposal
housings
Material handling pellets, tray, and
shelving; automotive bumper beams,
floor pans, battery trays, radiator
supports; helmets; flooring; concrete
pouring forms; and chair shells
(continued)
21
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Table 2-7. Compatibility of RFC Production Processes with Shape Characteristics and
Specific Products (Continued)
Process
Shape Characteristic
Product Examples
Closed molding processes (continued)
Wet system compression
molding
Transfer molding
Bag molding
Reaction injection molding
(RIM)
Rotational molding
Contoured, medium-wall
thickness
Simple configurations
Simple, large, contoured
Large, intricate, high
performance, solid or cellular
Hollow bodies, complex
Trays, outboard motor shrouds,
appliances, automotive applications, and
sinks
Body components for trucks, sports car
bodies, automotive body panels, marine
parts, small boats, plumbing
components, equipment housings, and
electrical components
High performance aircraft parts, and
aerospace components
Automobile and truck body panels,
bumper beams for cars and trucks, floor
pans for cars and trucks, and pick-up
truck beds
Water pressure tanks, water softener
tanks, and filters
Sources: Rauch Associates Inc. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: 1991.
SPI Composites Institute. Introduction to Composites. Society of the Plastics Industry, Inc.
Washington, DC: 1995.
22
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Table 2-8. Plastic Resin Prices: 1996-1999
Resin
Thermosets
Epoxya
Unsaturated Polyester3
Phenolic3
Thermoplastics
ABSb
Polypropylene3
Polystyrene3
PVC3
Nylonc
1996
1.25-1.37
.73-.S4
.72-.S2
.96-1.01
A2-.44
.48-.50
.39-.40
1.28-1.38
Price
1997
1.30-1.42
.75-.S6
.74-.S4
.88-.91
.39-.41
.38-.40
.38-.41
1.28-1.38
($/lb)
1998
1.30-1.42
.75-.S6
.74-.S4
.68-.71
.29-3 1
.38-.40
.27-30
139-1.49
1999
130-1.42
.75-.S6
.74-.S4
.64-.67
.28-30
.41 -.43
.29-32
1.29-139
3 General purpose.
b Medium-impact.
c Type 6.
Source: Plastics News. "Resin Pricing." Updated May 13, 1999. As obtained on May 17, 1999.
.
relatively low quantities to enhance particular properties of RPCs . The Agency computed a weighted
average price for additives in 1997 of $0.88 per pound.
2.4 Uses and Consumers of Reinforced Plastics
RPCs are an input into the production of a variety of products ranging from children's toys to
aerospace components and bathtubs to boat hulls. Therefore, the demand for RPCs is derived from
the demand for these products, which can be found within one of the following major segments of the
market for RPCs:
Aircraft/Military: flight surfaces, cabin interiors, aerospace components, military helmets,
armament, rocket launchers.
23
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Appliances/Business Machines: refrigerators, freezers, ranges, microwave ovens, power
tools, small appliances, computer housings, calculators.
Construction: swimming pools, rain gutters, molds for concrete, bathtubs, shower stalls,
whirlpools, spas, highway signs, cooling tower components, paneling for greenhouses,
patios, railings and other architectural components.
Consumer Products: fishing rods, golf clubs, skis, tennis rackets, furniture, campers,
snowmobiles, exercise equipment, seating, counter tops, serving trays, boxes and
containers, microwave cookware.
Corrosion Resistant Products: pipe fittings, ducts, hoods, tanks, pumps, filtration
equipment, and a wide variety of other chemical resistant products for use in the
waste/wastewater treatment, chemical processing, semiconductor, and petrochemical
industries.
24
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Table 2-9. Selected Plastic Reinforcement and Filler Prices: 1997
Input
Reinforcements
Fiberglass
Cellulose
Carbon
Average
Fillers
Calcium carbonate
Kaolin
Alumina trihydrate
Talc
Mica
Other minerals
Glass spheres
Natural
Average
Additives
Average
Price ($/lb)
$1.11
$0.52a
$10-30
$1.25
$0.08a
$0.05a
$0.13
$0.30
$0.21a
$0.08a
$0.78a
$0.05a
$0.09
$0.88
a Price computed by dividing value by quantity and adjusting by a producer price index (PPI) where appropriate.
Sources: U.S. Geological Survey. 1997. Minerals Yearbook: Clays, [online] . Obtained January 21, 2000.
U.S. Geological Survey. 1997. Minerals Yearbook: Mica, [online] . Obtained January 21, 2000.
Rauch Associates. 1991. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: Rauch
Associates, Inc.
Murphy, John. 1994. The Reinforced Plastics Handbook. Oxford, UK: Elsevier Advanced Technology.
U.S. Bureau of Labor Statistics. 2000. Producer Price Index—Commodities: WPUSOP9200, Intermediate
Materials Less Food and Energy, 1990-2000. [online] . Obtained January 20, 2000.
Shearer, Brent. April 15, 1996. "Carbon Fibers Adjusting to Changes." Chemical Marketing Reporter.
25
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• Electronic/Electrical: rods, tubes, circuit breaker boxes, molded parts, housings, substation
equipment, electronic connections, pole line hardware, microwave antennas, and many
other electrical and electronic applications.
• Marine: boat hulls, motor covers, marine docks, moorings, floats, buoys, canoes, kayaks,
and other components and hardware for naval, pleasure, and commercial water craft.
• Transportation: body panels for cars, buses, and tractor trailers, truck cabs, boxcar doors,
subway seating, heater housings, front end assemblies, drive shafts, wind deflectors, grill
opening panels, tail light housings, fender liners, instrument panels, and other diverse parts
and accessories for land transportation and utility vehicles.
• Other: all other composites applications. One significant new category of applications the
repair/replacement of components of the civil infrastructure. Product examples include:
guardrails, sign posts, and structural supports for highways and bridges.
Over time, the need for lightweight structural materials that meet strength, stiffness, and other
mechanical property requirements for high performance applications has prompted major developments
in production practices in the end-use markets. The characteristics demanded vary by the market (e.g.,
construction, transportation, consumer goods, or other product manufacturer). For example, the ability
to replace an assembly of several metal parts with a single molded composite is very appealing to
manufacturers of appliances and transportation equipment. The chemical resistance properties of RPCs
allow users in the construction and marine market segments to avoid the higher maintenance costs
associated with the metal and wood materials that they traditionally used.
The strength-to-weight ratios for composites are typically greater than those of metals. As an
example, phenolic composites have greater yield strengths than steel or aluminum, although resistance to
bending and the resistance to elongation may be superior in metals depending on the type of
reinforcement in the plastic (Murphy, 1994). Composites have low flammability properties, which
make composites superior to wood for applications susceptible to fire. Table 2-10 provides some
examples of these desired demand characteristics for selected end uses and associated products.
26
-------
Table 2-10. Demand for Reinforced Plastic Composites: Some Examples
End-User Industries and Product
Markets
Demand Characteristics
Product Examples
Aircraft/aerospace/military
Appliances/business equipment
Construction
Marine
Transportation
Lightweight, moldability, and
versatile nature
Parts consolidation, design
flexibility, and high strength to
weight ratios
Corrosion resistance, high strength
to weight ratio, custom finishing,
longer life-cycle and/or fewer
maintenance requirements
Large, rigid, continuous shapes with
smooth, corrosion-resistant finishes
and high strength to weight ratios
Parts consolidation, light weight,
continuous shapes with smooth
corrosion-resistant finishes
Structures and interiors of both
military and commercial planes
Dishwasher panels, freezers, small
appliances, computer housings, and
radios
Beams, columns, roof trusses, soffit,
siding, flooring, bathtubs, sinks,
shower stalls, whirlpools and spas
Boat hulls, jet skis, and other marine
craft
Body panels, front ends, bumpers,
and interior dashboards for
automobiles, mobile homes, buses,
and trucks.
Source: Society of the Plastics Industry, Inc. Introduction to Composites. 2nded. Washington, DC. The
Composites Institute. 1992.
Land transportation products consumed the most reinforced plastics in 1997, followed by
construction, as Figure 2-7 illustrates. The land transportation segment alone used 1,095 million
pounds, which accounts for 32 percent of the 3.4 billion pounds of RPCs consumed in 1997.
Construction applications, the second largest end-use category, consumed 700 million pounds of
composites during 1997. Other significant market segments are marine and electrical products.
Producers serving the marine segment will not be subject to the proposed controls; they will be
separately addressed by the Agency.
27
-------
Reinforced Plastics Shipments = 3,422 million Ibs.
Land
Transportation
32.0%
Miscellaneous
3.2%
Marine
10.3%
Aircraft/
Aerospace/
Military Appliances/
0.7% Business
Equipment
5.4%
Electrical/
Electronic
10.2%
Construction
20.5%
Consumer
Products
6.1%
Corrosion-
Resistant
Equipment
11.6%
Figure 2-7. Consumption of Reinforced Plastic Composites by Market Segment: 1997
"Includes reinforced thermoset and thermoplastic resins, reinforcements, and fillers.
Source: Society of the Plastics Industry, Inc. 1998. Facts and Figures of the U.S. Plastics Industry. Washington,
DC: SPI.
28
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Table 2-11 indicates that consumption has risen from 1989 levels in all end-use categories
except for aviation/aerospace/military, which has declined because of the recent reductions in U.S.
government spending on defense. Total shipments have increased every year since 1991. The growth
rate for consumption by land transportation was highest for the period 1984-1997, followed by
electrical applications. Causes for aggregate growth vary across individual market segments. Growth
may be driven by advances in RFC production processes or increased demand for specific final
products. Demand in some end-use categories is strongly influenced by fluctuations in consumer
confidence or by changes in government spending priorities.
The growth for particular RFC processes and resins may differ from the observed aggregate
rates of growth for the markets they serve, which is significant because the RFC source category to be
regulated includes only thermosetting resins—mainly unsaturated polyesters. Table 2-12 presents
information on consumption of reinforced unsaturated polyesters based on consumption data by end
use for 1984 through 1993 from Predicasts Basebook and Modern Plastics. In contrast to the
aggregate growth rates across end-use markets, Table 2-12 shows that growth for reinforced
unsaturated polyesters was positive in electrical/electronic (0.7 percent), aircraft/aerospace/military (0.6
percent), appliances/business equipment (0.4 percent annually), and corrosion resistant equipment
(0.2 percent). It appears that reinforced unsaturated polyesters are losing market share in many end
uses as technological advances allow thermoplastic resins to be used in a wider range of processes and
applications.
Some RFC processes may serve multiple end-use markets and, thus, have a different growth
rate than those listed in Tables 2-11 and 2-12. In particular, industry sources cited in Modern Plastics
state that pultruded parts using reinforced polyesters are replacing aluminum, wood, and polyvinyl
chloride in various markets and are expected to have a 15 to 25 percent growth rate over the next 5
years (Modern Plastics, 1993). Pultrusion is a fully automated fabrication process with low tooling
and labor costs that produces continuous, cross-sectional composite profiles, all of which are expected
to allow it to continue its strong growth and penetration of traditional material profile markets in the
1990s. Growth is expected to be particularly significant in the electrical and corrosion-resistant
markets, with opportunities increasing in the construction and aerospace markets (Modern Plastics,
1994).
2.5 Manufacturing Facilities
29
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Table 2-11. Consumption of Reinforced Plastic Composites by End Use: 1984-1997 (106 lbs)a
End Use 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Average
Annual
Growth Rate
(1984-1997)
Aircraft/
aerospace/
military
Consumer
products
Corrosion-
resistant
equipment
Electrical/
electronic
Marine
29 32 37 36 39 41 39 39 32 25 24 24 24 24
Appliances/ 123 133 137 141 150 151 153 135 143 148 161 167 170 185
business
equipment
Construction 430 445 456 506 495 470 468 420 483 530 597 627 643 700
143 142 149 167 169 158 165 149 162 166 175 184 192 210
310 295 291 329 349 335 350 355 332 352 376 395 405 396
189 191 201 214 230 229 241 231 260 275 299 315 328 348
309 335 340 413 452 405 375 275 304 319 364 375 383 353
540 563 585 656 695 677 705 682 750 822 946 984 1,009 1,095
Land
transportation
Miscellaneous 80 82 83 75 80 76 79 74 83 89 102 107 111 111
-3.4%
2.3%
3.2%
2.3%
2.3%
4.7.%
0.1.%
5.3%
2.8%
Total"
2,153 2,218 2,279 2,536 2,658 2,542 2,575 2,360 2,549 2,726 3,043 3,176 3,263 3,422
3.2%
a Includes thermosetting and thermoplastic resins, reinforcements, and fillers.
b Parts may not sum to totals due to independent rounding.
Sources: Lindsay, Karen F. 1996. "State of the Industry: 1995-96." Composites Design and Application. February.
Rauch Associates. 1991. The Rauch Guide to the U.S. Plastics Industry. Bridgewater, NJ: Rauch Associates, Inc.
Society of the Plastics Industry, Inc. 1994. Facts and Figures of the U.S. Plastics Industry. Washington, DC: SPI.
Society of the Plastics Industry, Inc. (SPI). 1998. Facts and Figures of the U.S. Plastics Industry. Washington, DC: SPI.
-------
Table 2-12. Consumption of Reinforced Unsaturated Polyester by End Use: 1984-1993 (106 lbs)a
End Use
Aircraft/aerospace/
military
Appliances/business equipment
Construction
Plumbing fixtures
Panels and siding
Glazing and skylights
Pipe, fittings, conduit
Consumer products
Corrosion-resistant equipment
Electrical/electronic
Marine
Land transportation
Miscellaneous
Total"
Predicast
Code
30752-20
30754-00
30760-00
30765-00
30761-00
30761-40
30766-00
30770-00
NA
30755-00
30752-40
30752-00
NA
1984
26
86
420
109
125
45
141
130
310
NA
308
200
NA
1,592
1985
28
85
400
101
122
41
136
132
320
48
320
220
52
1,605
1986
32
87
402
102
123
40
137
130
322
52
324
200
50
1,599
1987
33
90
393
100
115
39
139
130
326
55
350
195
50
1,622
1988
34
93
414
112
117
42
143
135
338
53
375
207
51
1,700
1989
35
93
426
115
125
50
158
138
350
53
353
221
52
1,721
1990
34
93
384
106
109
36
139
127
336
53
300
215
48
1,590
1991
36
84
337
88
99
24
126
120
329
50
221
185
45
1,407
1992
31
88
387
94
108
27
122
122
299
53
243
190
52
1,552
Average
Annual
Growth Rate
1993 ('84-'93)b
25
91
418
96
116
29
122
124
NA
55
255
207
NA
1,613
0.6%
0.4%
-0.7%
-1.3%
-1.6%
-5.8%
-1.4%
-0.9%
0.2%
0.7%
-3.7%
-0.5%
-0.7%
-0.5%
a Includes weight of resin, reinforcements, and fillers.
b Or widest range of available years.
c Parts may not sum to totals due to independent rounding.
Sources: Modern Plastics. "Resin Supply: Plotting a Course for Global Supply." January 1994.
Predicasts Basebook. November 1992. Foster City, CA: Information Access Corporation.
-------
The information provided in this section is based on EPA's 1993 survey of the reinforced
plastics industry (EPA, 1993). Although roughly 700 facilities participated in the survey, only
433 facilities were determined to be potential major sources of HAP emissions from the production of
reinforced plastics. Thus, this section focuses on those 433 facilities likely to be subject to the
proposed air regulations.
2.5.1 Location
Based on the 1993 updated industry screening survey, Figure 2-8 identifies the location of the
433 major source facilities producing reinforced plastics in 1993. Ohio, Indiana, California, Texas, and
Pennsylvania are the top five states in order of number of major source facilities.
2.5.2 Employment
The 1993 survey data indicate that employment at these major source facilities ranged from 2 to
1,250 per facility in 1997 with an average of 84 employees for those facilities reporting their
employment level. Table 2-13 provides the distribution of major source facilities reporting employment
data. Over 80 percent of the 389 facilities reporting employment data had 100 employees or fewer.
The vast majority of the remaining facilities reported employment levels between 101 and 500. Less
than 3 percent of facilities reporting employment reported have more than 500 employees.
2.6 Facility Ownership
Facilities comprise a site of land with plant and equipment that combine inputs (raw materials,
fuel, energy, and labor) to produce outputs (reinforced plastics). Companies that own these facilities
are legal business entities that have the capacity to conduct business transactions and make business
decisions that affect the facility. The terms facility, establishment, plant, and mill are used synonymously
in this analysis and refer to the physical location where products are manufactured. Likewise, the terms
company and firm are used synonymously and refer to the legal business entities that own the facilities.
As seen in Figure 2-9, the chain of ownership may be as simple as one facility owned by one company
or as complex as multiple facilities owned by subsidiary companies.
Potentially affected firms include entities that own facilities manufacturing reinforced plastics. In
1993, 356 companies owned the 433 major source facilities, according to the EPA industry survey
(EPA, 1993). Annual sales data were available for 314 of these companies (88 percent). Based on
the available small company sales and employment observations, the Agency also estimated sales for
32
-------
39 of the 42 remaining companies by calculating the ratio of sales to employment for each SIC code
and applying the appropriate ratio to the number of employees for each company without sales data.
Appendix A lists these companies and their sales and employment figures where available.
2.6.1 Size Distribution
Firm size is likely to be a factor in the distribution of the regulatory action's financial impacts.
The 356 firms owning the 433 manufacturing facilities range in size from 3 to 647,000 employees.
Table 2-14 shows the size distribution of potentially affected firms by total employment. The majority
of firms (78 percent of those with employment data) have 500 employees or fewer. Only 5 percent
report employment between 500 and 1,000, while 18 percent report employment over 1,000. Thus, it
appears that this industry is composed of a large number of very small and very large firms, which likely
results from a large number of smaller specialty product manufacturers and larger integrated
manufacturers of durable products.
The majority of firms (82 percent of those with sales data) generated less than $100 million in
annual sales, as Table 2-15 shows. Nine percent report annual sales between $100 million and
$1 billion, and 9 percent report sales over $1 billion annually. The distribution of sales appears to be
less skewed than the distribution of employment across firms.
33
-------
-------
Table 2-13. Distribution of Major Source Facilities by Employment
Employment Range Number of Facilities Share of Reporting Facilities (%)
0-100 313 80.5
101-250 46 11.8
251-500 20 5.1
501-750 4 1.0
751-1,000 5 1.3
> 1,000 1 0.3
Total reporting 389 100.0
Not Available 44
35
-------
Parent Company
Other Companies
or Legal Entities
Subsidiary
Company
(Direct Owner)
Facility
Parent Company
T
Subsidiary
Company
(Direct Owner)
Facility
B
Parent Company
(Direct Owner)
Facility
C
Figure 2-9. Alternative Chains of Ownership
2.6.2 Issues of Vertical and Horizontal Integration
Vertical integration is a potentially important dimension in analyzing firm-level impacts because
the regulation could affect a vertically integrated firm on more than one level. For example, the
regulation may affect companies for whom reinforced plastic production is only one of several
36
-------
Table 2-14. Distribution of Potentially Affected Firms by Employment
Employment Range
0-100
101-250
251-500
501-750
751-1,000
>1,000
Total
Not Available
Number of Firms
194
55
22
10
7
61
349
7
Share of Total
(%)
55.6
15.8
6.3
2.9
2.0
17.5
100.0
processes in which the firm is involved. A company that produces reinforced plastics for example may
also be involved in manufacturing automobiles, aircraft, sporting goods, and appliances. This firm
would be considered vertically integrated because it is involved in more than one level of production
including reinforced plastics. A regulation that increases the cost of manufacturing reinforced plastics
will also affect the cost of producing the final products that use reinforced plastics in the production
process.
Horizontal integration is also a potentially important dimension in firm-level impact analysis.
This is because a diversified firm may own facilities in unaffected industries, giving them resources to
spend on complying with this regulation—if they so choose. The potentially affected firms in
Appendix A demonstrate some diversification as evidenced by the number of subsidiaries and divisions
listed. Most are part of larger firms or holding companies that are involved in several different
industries.
2.7 Small Businesses
The Regulatory Flexibility Act (RFA) of 1980 as amended by the Small Business Regulatory
Enforcement Fairness Act (SBREFA) of 1996 requires that the Agency give special consideration to
37
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Table 2-15. Distribution of Potentially Affected Firms By Sales
Company Sales
Less than $5M
$5Mto$10M
$10Mto$25M
$25M to $50M
$50Mto$100M
$100Mto$250M
$250M to $500M
$500Mto$lB
$1B or greater
Total
Not Available
Number of Firms
127
65
52
27
20
12
13
6
31
353
3
Share of Total (%)
36.0
18.4
14.7
7.6
5.7
3.4
3.7
1.7
8.8
100.0
small entities affected by Federal regulation. This section focuses on identifying the small businesses
affected by the proposed NESHAP.
2.7.1 Identifying Small Businesses
The following secondary sources were used to obtain data for the 433 affected manufacturers
identified in the industry screening survey (EPA, 1993):
• Business and Company ProFile (Information Access Corporation, 1998)
• Dun and Bradstreet Market Identifiers (Dun & Bradstreet, 1998)
• Ward's Business Directory of U.S. and Private and Public Companies (Gale Research,
1998)
• Worldscope (Disclosure Inc., 1998)
• Standard & Poor's Corporations (Dialog Information Service, 1997)
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• Manufacturing USA (Gale Research, 1996)
• Company 10-K Reports
We identified the ultimate parent company and obtained sales and employment data for companies for
which data are available. Based on available secondary data, the Agency has determined that 356
parent companies are affected by the regulation. Employment data could be obtained from the above
sources for 349 of these parent companies (98 percent).
The Small Business Administration (SBA) defines small businesses based on industry size
standards (SBA, 1996). Table 2-16 presents the size standards for the SIC codes covered by the
industry survey. As shown, the small business definition for the RFC industry ranges from 500 to
1,000 employees. We developed a company's size standard based on the reported SIC code for its
facilities. In determining the companies' SIC, we made the following assumptions:
• In cases where companies own facilities with multiple SICs, the most conservative SBA
definition was used. For example, if a company owned facilities within SICs 3714 (size
standard = 750 employees) and 3089 (size standard = 500 employees), we assumed the
size standard to be 750 employees.
• Thirty-eight facilities report an SIC code of 3079. To our knowledge, this SIC code is not
currently used. Therefore, we assigned SIC 3089 to these facilities.
• Twenty-four facilities report no SIC code. We assigned these facilities the most
conservative size standard of 1,000 employees.
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Based on the SBA's definitions, 278 companies out of 356 (78 percent) were identified as small, as
Figure 2-10 shows. These companies own 302 facilities (70 percent of all RFC facilities).
Appendix A lists the companies identified as small for this analysis.
Small
Business
78%
Large
Business
22%
Figure 2-10. RFC Firms by Size
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Table 2-16. Small Business Administration Size Standards for RFC—Companies by SIC
SIC
2434
2519
2522
2541
2599
2821
3082
3083
3084
3087
3088
3089
3281
3296
3299
3431
3499
3531
3533
3546
3561
Small Business
Standard
500
500
500
500
500
750
500
500
500
500
500
500
500
750
500
750
500
750
500
500
500
SIC
3564
3589
3612
3613
3621
3647
3663
3679
3711
3713
3714
3715
3716
3728
3743
3792
3799
3821
3949
3993
3999
Small Business
Standard
500
500
750
750
1,000
500
750
500
1,000
500
750
500
1,000
1,000
1,000
500
500
500
500
500
500
Source: U.S. Small Business Administration. Size Standards by SIC Industry. 1996. Available
.
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