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Ron’s Market Review October 2020

Alliance Plastics

Resin Market

Have you ever been in a relationship with someone who, no matter what, they want more? I felt this way with my personal trainer. I am physically done, and he screams at me, “COME ON YOU WEAKLING, GIVE ME ONE MORE!” Another example, I had a friend who flew all the way to Australia, and the girl he was dating was mad because he was flying business class and not first class. This is the same state of the resin world. I think the converters and the fabricators are staring at the resin companies as they put up their demands for 19 cents, and we are all saying, “but I can’t seem to pass on all this to my customers! They are revolting!” The resin producers say, “Yes, you are all revolting. Have you smelled yourselves lately?”  

The major indexes came out flat, which drew some relief. However, staring down the latest Hurricane coming up towards the mid-central gulf states. This is our 27th such storm, and I have to say, I have never seen us go all the way through the Z’s into the Greek alphabet for names before. Remember, it’s not the wind that hurts us. It’s the water; the water which floods out transportation or knocks out the ability to fix the down power lines. This is what makes the possible shutdowns worse. Let’s just hope we get a TREAT instead of a TRICK this Halloween.

Paper Market

Recently, we had a conversation with one of our major suppliers on paper. He was nervous about something. I could tell it was about our conversation. He said he wasn’t able to fulfill some of our orders for November and December. I said, “Fine, how many can you fulfill?” He came back with the magic words, “NONE” (nada in Spanish). We are okay, but you can imagine my surprise at the negotiations. I didn’t know it would be the Michael Corleone offer of “nothing.” Then, shortly, came the announcements of $50.00 per ton for URB (uncoated recycled board). All of this during a pandemic. This is as appetizing as eating a potato salad that has been sitting for 5 hours in the hot August Florida sun.  

Ron’s view:

Twenty-twenty has been challenging. Do I even need to write that? My network of friends, colleagues, and my family have all been a significant relief from the insanity of a world in a global pandemic and knee-deep in a contentious election.

It’s a good thing I gave up sniffing glue (that would be Elmers from elementary school); otherwise, I could fall into bad old habits. Standing in the corner was torture for a kid who had ADHD. 

I saw a friend and customer the other day, and instinctively drew out my hand while trying to simultaneously pull it back and made a weird sound from my mouth, “aieahhh.” I threw him a fist bump instead and then focused on the germs we had just exchanged. Another friend tried to give me a hug. When he realized that wasn’t acceptable anymore, both our arms were hanging in the air. As uncomfortable as that felt, at least it was better than my Canadian friend who he says he loves me, as I am sure another man says to another man, perhaps it’s more normal now, but I am old school, and I always say, “I…I…I feel strongly about you as well, but in a heterosexual way!”  

When going through trying times, I think about my father and mother. He was in the Vietnam War, so I suppose getting shot at is definitely worse than what I could ever tolerate. My mother almost starved to death more than once as she was a child in war-torn Korea. When I was a little boy, she would tell me the story about how they ate her pet rabbit because they were starving, and she cried as she ate the meat. She was still tearing up all those years later as she recounted it. That certainly gives one perspective. So, yeah – I suppose none of us really have it all that bad.

One thing that 2020 has done: it took away our platform for the launch of our SX2 stretch film product line. No one was looking for more change, even though we had a new, exciting product, a 55 nanolayer film that flat out is the best film in the world. Anyone who says otherwise is itching for a fight, and since I am out of shape, I won’t do any fighting. We were so excited about this product line. We paid for high-end tests to be conducted, and you know what? We won! Not a small win or a victory where we lost as many as they did, but we could afford to like the North did to the South in the Civil War – but a huge Texas-Sized can of whoop-ass kind of win!  

One of my friends who helped us bring this line together and pushed it with his company asked me, “Hey man, I am the first one to bring this in. Are you going to sell this to everyone now?” I looked at him and said, “You know what, this is a special film. The people that recognize it should get something special. So you know what? No, I will sell it to you well below anyone else” It was there that I decided on our loyalty program, which I call the Elite Program. Our first member of the elite program must be doing well because we are getting calls to go against them; however, our loyalty is paramount, and we would never do this to a FRIEND. I had to think. If someone offered me an exclusive in a region on a 55 Nano-layered film that beat the highest end films in the market at 15-20% less than our friendly competitors with a 3% rebate on top, I would say, “Where do I sign?”   

Remember what it was like to have someone who had your back? Having something special to sell that is available to no one else, and knowing that when it comes to price advantage, you would be able to control the game. Before the Covid shutdown, I went round and round with someone who continued to tell me that running his current 57 gauge private label was the same as my 55 gauge, 55 nanolayer film, but he didn’t test the puncture, he didn’t test the cut and weigh, he didn’t test the containment. He just threw it on a machine. My comment was to him, “any film can run on a machine, but do you even care what happens to the load after you take it off the wrapper?” He told me he didn’t care, and I told him, “I can’t wait to go against you in the market.” So, when there is an effective vaccine, and we all can shake hands and clink our glasses again, I will be there to make him realize the difference first hand and show him how wrong he was. I will be doing this with an Elite member in his region soon.

Don’t believe me? Check out this video of our Steelflex Xtreme 2.0 39ga (10 mic) in action. This film is running at 250% pre stretch with speeds of 65 RPMs. If you don’t believe your eyes, let us show in person.

Click to see it in action

The Elite Program is based on loyalty and partnership, and it’s going to be an exclusive club. Our loyalty will be measured in how you won’t run into your competitors with the same thing and how much money we will make you. Our company, creed mentions loyalty:   

We do the things we do because that is who we are.

We invent new concepts because we want to see change.

We are loyal because we choose to do the right thing.

That’s the Alliance Way.

Do you miss the value in a real partnership? Don’t you wish that a vendor gave you loyalty back? Don’t you wish for someone to have your back? Don’t you wish they wouldn’t sell everyone else and when everyone has the same thing, just how special are you now?