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AIN Plastics, a division of ThyssenKrupp Materials NA, Inc., is a leading full line distributor and fabricator of industrial plastic shapes, specializing in engineering plastics for the fabricator and OEM communities.

How Tribology Led to the use of DuPont™ Vespel®

Tribology is based on the Greek word for “rubbing, grinding”, or “wearing away”. It’s study has lead to advances in material selection for high load applications such as bearings. Plastic materials such as DuPont™ Vespel® have been key in reducing friction and adding cost savings in the long run.

Tribology is a highly pervasive occurrence that can cause parts to have a much shorter life. So pervasive that it became a study all it’s own. In 1964, Peter Jost, a lubrication expert was inspired during a conference and out of this he began an entire discipline around tribology. You can learn more about Professor Jost in this interview Today we have many lubricants that range from the natural to the synthetic. They can all help to reduce friction. Thanks to the world of plastics we also have some materials like DuPont™ Vespel® that provide vast improvements beyond lubricants These new polyimide materials allow engineers to create parts and machinery they never thought possible and to greatly improve the efficiency and life of those parts.

We can thank the discipline of tribology for longer part life.

We can thank the discipline of tribology for longer part life.

Just think, if you had asked for a 10 year / 100,000 mile warranty 20 years ago the sales person would have laughed for a very good long time. Now, it’s the standard thanks in part to the discipline of tribology and new materials like Vespel. Due to their properties materials like DuPont™ Vespel® have found their way into commercial transportation industries, medical, food processing and manufacturing of all types. They simply have a unique combination of properties that makes them highly durable even under the harshest conditions.

Plastic materials are making a big difference in our ability to reduce friction and cost due to reduced wear and less need for lubrication and maintenance.

DuPont™ Vespel® has been a marvel of the plastics industry for decades. Now the SCP family of materials has been added to help with extended part life in sealing and bearing applications. It is most noted for it’s ability to be used in non-lubricated high-friction environments because of it’s exceptional heat and pressure resistance capabilities. The SCP 5009 material in particular performs well with or without lubrication under conditions that would cause severe wear or destruction of most other plastics. SCP 5009 is often used in bearing applications because it will reduce or eliminate problems with abrasion, corrosion, adhesion fatigue, and wear that plague conventional options such as metal bearings. Addition of a lubricant can improve performance even more!

Technical Properties of DuPont™ Vespel® SCP 5009

 

Technical Data for DuPont Vespel SCP 5009

Technical Data for DuPont Vespel SCP 5009

(Technical data provided by DuPont)

Using DuPont™ Vespel® SCP-5009 shapes for seals, valves, bearings, bushings, and other components can mean savings due to lower replacement rates which leads to reduced maintenance costs. It’s also easy to machine. Most Vespel can be machined on the same equipment used for metals like brass. (See our video on machining techniques) and that can mean fewer rejects, higher productivity and reliability.

Key industries that have studied tribology and found that DuPont™ Vespel® SCP-5009 shapes can offer substantial processing, performance and metals replacement advantages include analytical instrumentation, medical devices, aerospace and energy and material handling.

In a comparison to metal ball, needle and roller bearings, a part made from high temperature material like DuPont™ Vespel® SCP-5009 has advantages that include:

• No external lubrication
• The ability to hold up in temperature where lubricants fail
• Perform in dirty environments including dusty or where lint is present
• They typically weigh less and are quieter
• Compared to porous metals, bronze and brass the wear life may be much greater
• Vespel holds up to high pressure and high velocity
• Creep resistance

In addition, SCP 5009 can perform at temperatures and velocities beyond that of other plastic materials.

SCP 5009 is just one example but it’s one that shows how, thanks to the discipline of tribology, plastics are becoming more mainstream in manufacturing and it’s not due to a short term gain of cheaper material. Rather tribology has given us a longterm view of parts that looks at longer life, less maintenance and improved performance. Therein lies the true value and savings.

For more information on any of the information in this blog feel free to contact me.

Kendall Montague
Sales & Marketing Manager – DuPont™ Vespel®
ThyssenKrupp Materials NA
AIN Plastics Division

To ask me a question please comment on my post here or contact me directly:
Phone: (314) 502-0813
email: kendall.monatgue@thyssenkrupp.com

 

Read More:

The Patriotism of Plastics

In remembering Veterans Day this past week I thought it might be interesting to consider some of the various and unique ways that plastic materials have contributed to safety, security and defense.

How Are Plastic, War And Women’s Stockings Related?

In the late 1800’s Cellulose based products began showing up in the marketplace. This was followed in the 1900’s with materials like PVC’s (PolyVinylidene Chloride) and Phenolic materials (formerly known commonly as Bakelite).  However the big turning point needed to launch plastics into the mainstream industrial world would be that of necessity.  World War II required rationing of many raw resources such as costly silk from Asia which was used in parachutes, cords and cabling, as well as stockings.  DuPont introduced Ladies’ Nylon stockings right from their Wilmington Delaware headquarters and they sold out of the new hosiery within a few hours!  No longer did women have to struggle to afford costly silk stockings (if they could be found) or paint their nylons on. The new stockings looked great, fit well, and outlasted traditional silk or leg painting.
Nylon went on to become one of the most common polymers used in industrial applications, prized for its toughness and excellent wear properties, not mention it’s ability to be quite stylish and fashionable!

Posted by:

Lin Poulin
Telemarketing Manager
ThyssenKrupp Materials NA
AIN Plastics Division

http://www.ainplastics.com

Better Insulator Materials Take the Heat

When selecting an Engineering Plastic for insulator use the term “dielectric strength” is often of great consideration. But be aware, the term “dielectric strength” has multiple meanings.

In physics, the term “dielectric strength” has three meanings:
1) In an insulating material it is the maximum electric field strength that the insulating material can withstand without breaking down or failing and losing it’s insulating properties.

It can also mean…
2) For a given configuration of dielectric material and electrodes, dielectric strength is the minimum electric field that causes a breakdown of the properties.
3) The maximum electric stress the dielectric material can withstand without breakdown

Overall, dielectric strength is considered to be a natural property of a given material. It’s just a part of what it is. When a material’s dielectric strength is pushed past it’s limit the electric field of the material frees bound electrons. If the applied electric field is sufficiently high an event called an avalanche breakdown occurs. This happens very, very fast (within nanoseconds) and basically it causes the material to severely degrade or even completely destroy it’s insulating properties.

Dielectric-Strength-Test

Example of a Typical Dielectric Strength Test

What to look for in an Insulator Material
When looking at Engineering plastics there are several things that will affect the material’s dielectric strength. When an insulator is subjected to increasingly high voltages, it eventually breaks down and allows a current to pass. The voltage reached before break down divided by the sample thickness is the dielectric strength of the material, measured in volts/mil. It is generally measured by putting electrodes on either side of a test specimen and increasing the voltage at a controlled rate. Factors that affect dielectric strength in applications include: temperature, sample thickness, conditioning of the sample, rate of increase in voltage, and duration of test. Contamination or internal voids in the sample can also have an affect on the outcome of testing.

Another way to Look at Dielectric Strength…It is…
directly proportional to the thickness of the material
inversely proportional so it decreases as operating temperature increases
inversely proportional to an increase in frequency
inversely proportional to an increase in humidity

To see how dielectric strength compares let’s take a look at some common insulator materials:
(All Dielectric Strengths are given in MV/m)

DuPont™ Vespel® – 700
Ultem PEI – 830
PEEK – 480
Cast Nylon – 500

The Ultimate Insulator Material
When looking at materials that provide a high dielectric strength many engineers look to DuPont™ Vespel® This line of materials has been designed into many Electronics applications as an Insulator material due to their high dielectric strength combined with other properties.

Scientific Instrumentation, Semiconductor Manufacturing, Analytical Equipment, Ultrasonics, Communications, and Avionics are just a few of the places where you will find Vespel.  Recently DuPont extended their Vespel® line to include SCP-5000, with even higher dielectric strength than standard SP-1.

Do you have more questions about choosing the right Engineering Plastic based on electrical properties, feel free to call me directly. I’d be happy to assist.

Paul Hanson

Sales and Marketing Manager, DuPont™ Vespel®
ThyssenKrupp Materials NA
AIN Plastics Division

email:  paul.hanson@thyssenkrupp.com
Phone: 770.362.9712

 

 

Fluorosint® 500 a Sacrifice Gasket Material and More

Taking a Closer Look at Fluorosint® Materials
What Are the Advantages and Disadvantages of Fluorosint® 500?

Do you have a part where precision is highly critical and it will be under high pressure? Fluorosint® 500 could be just the material you need.

Fluorosint® 500 is a PTFE enhanced with a synthetic mica. This enhancement means more  opportunities to improve efficiency without sacrificing wear resistance. It also makes an excellent sacrificial wear surface that can help to prevent catastrophic system failures.

In testing there are a few things that really stand out about this material. One is it’s CLTE (in/in/˚F) of 2.5×10-5. Fluorosint® 500 is also 1/3 harder than PTFE and it also has a deformation under load of just 1.10%, that is 9 times lower than virgin PTFE. In fact, the overall performance of Fluorosint® 500 is similar to that of aluminum. Lastly, this material has very low frictional properties so it mates very well with many other materials.

For a complete technical data sheet on Fluorosint® 500 click here to download.

Does this have you thinking about how you might use Fluorosint® 500? Here are a few of the most common uses. If you know of more – drop a comment on our blog!
• Split and one-piece seals
• Valve seats
• Shrouds
• Slide bearings
• Wear strips
• Sacrificial seals
• Abradable mating parts where the parts are allowed to “cut” their own running clearance
• Thrust washers
• A replacement for metal or aluminum seals and shrouds in compressors

To sum it all up – Fluorosint® 500 by Quadrant Engineering Plastics can be another great option to keep in mind if you need a material for a high load applications. It can have  some clear advantages over virgin PTFE and, like other PTFEs it possess chemical resistance. The next time you have a demanding application it maybe worth a look!

See you in the blogosphere again soon!

Lisa Anderson

Marketing Manager
ThyssenKrupp Materials, NA
AIN Plastics Division

www.ainplastics.com

 

 

Fluorosint® 207 FDA Compliant for Seals and Gaskets

Taking a Closer Look at Fluorosint® Materials
What Are the Advantages and Disadvantages of Fluorosint 207?

When it comes to temperature and pressure resistance Fluorosint® 207C falls between  TIVAR® and Duratron® materials. It offers very good wear resistance and Fluorosint® 207 has a very low coefficient of friction.

Where this material really shines is in two areas. It works successfully where virgin PTFE may not. Even more importantly this material is FDA compliant so it’s excellent for food service applications. Basically if you need a seal or gasket material that is temperature resistant, chemical resistant, and FDA compliant Fluorosint® 207 is a great option. In addition this material has been shown to last longer than unfilled PTFE’s in wear applications and it works well against most mating surfaces.

Test Method Result
Tensile Strength (psi) 1,500
Hardness D65
CLTE (in/in/˚F) 5.7 x 10-5
COF 0.10
Limiting PV (ft-lbs. in2-min) 8,000
K-Factor 85
Deformation under load 5.00%
FDA Compliant Yes

 For a more complete look at test results you can download a technical data sheet.

Common Applications Include:

Seals
Mixers
Pumps
Appliances
Bearings
Valve Seats
Commercial Beverage Filling Systems

Is Fluorosint® 207 right for your application? Are you using it now? Let us know how it’s working for you.

Don’t forget to share! If you this information would be helpful to someone you know, please pass it along!

We’ll see you in the blogosphere again very soon!

Lisa Anderson

Marketing Manager
ThyssenKrupp Materials, NA
AIN Plastics Division

www.ainplastics.com

Glass>Acrylic>Polycarbonate = Progression

Glass or Acrylic or Polycarbonate:
A Quick Guide on how to Select the Right Material for Your Application

Glass, Acrylic, or Polycarbonate? Which one is right?

Glass has been the obvious traditional choice when a clear material is needed. Glass is optically clear and, as we all know, it’s great in many applications.  The exception to that is when it comes to safety and weight considerations. In these cases Acrylic often becomes the material of choice. Like glass it has excellent clarity and, with coatings, it can have scratch resistance. It is also available in colors of all kinds.

Is Safety a Concern?

When safety is the primary concern polycarbonate is the logical choice.  Polycarbonate has come a long way over the years.  It comes in many colors. It is similar in clarity to Acrylic but it has the added safety and security of additional impact performance.

Coated or Uncoated Polycarbonate – There Is a Difference!

In order to get the impact performance that polycarbonate offers, something has to give; polycarbonate is softer than acrylic so it can scratch.  However, you can get polycarbonate material with a coating that is water clear and will extend the life of the product by increasing the hardness of the surface.  This is great for applications from machine guards to windscreens, to touch screens.  Consider coated polycarbonate material for added protection. If scratching isn’t an issue the uncoated polycarbonate can typically save you a little bit of cost.

So, as you can see, selection of clear materials is often a progression of going from glass to acrylic to polycarbonate based on the needs of your project.

 Scott Reed

ThyssenKrupp Materials, NA
AIN Plastics Division
Sales & Market Manager
Bayer Market Development

Phone: 214.548.0567

email: Scott.Reed@thyssenkrupp.com 

www.ainplastics.com

Join me for an introduction to the world of plastics!

Your Guide to Plastics Past, Present, and Future…

Lisa Anderson, Marketing Manager ThyssenKrupp Materials NA, AIN Plastics Division

It’s hard to believe it’s been over 6 months since I began working at AIN Plastics. Hard to believe because everyday is packed full of lots of projects and lots of things to learn about plastics. There have been new people to meet and old friends to reconnect with, and it’s all been really fun, so the time has truly flown by.

As I’ve gone through these months I developed a hunch. My guess is, when it come to plastics for manufacturing and specialty uses, a lot of you in many industries are in the same boat because there are so many material choices out there. So I’m inviting you to take the journey along with me to learn about plastics. What are plastics, what are the different types, why are they being used more and more, and what plastics will work for your applications. In fact, I hope you’ll share your applications and experiences as well.

While we are at it we’ll take a stroll through plastics history too. I’m a huge history buff so every time I hear about a plastic I like to dig in and find out how it all started. These days plastics seem to surround us, but it wasn’t that long ago we relied on other materials such as wood, metal, and glass for everything from IV ‘bottles’, to baby bottles, cooking utensils, sporting equipment. Hmmm – what were shower curtains before plastic? I’ll get back to you on that one, or if you know, please share! We love comments.

So let’s get started! Today I’d like to stay in the present and take a look at a helpful piece that came across my desk. As we all know there are literally thousands of types of plastic materials out there and more are hitting the market all the time, so anytime there is something that can help you to select the best one for the job we here at AIN will be sure to share it with you. After all, getting the right material helps everyone. The item that came across my desk is in regards to Materials for seals and gaskets.

So let’s start with a couple of questions –  
• Do you make seals or gaskets?
• Do you need your seals and gaskets to be Teflon®?
• Do you have a high temperature application?
• Do you need FDA compliant seal and gasket material?

The most common choices for seals and gaskets are UHMW – PE, Teflon, and PEEK. These are all great options, but another material called Fluorosint® has, until now been a little less known for seals and gaskets however, it is proving to give material specifiers another excellent option for certain higher temperature applications. Two Fluorosint® materials are FDA compliant giving you options for special applications in food or medical applications.

In selecting material for gaskets and seals temperature and pressure are the two biggest factors people generally consider. This chart easily shows where TIVAR® UHMW-PE, Teflon®, Ketron® PEEK, filled and unfilled PTFE, and Fluorosint® and Duratron® fit in as material options. Test results clearly show that Fluorosint® and Duratron® fit very well into a gap left for high temperature and high pressure applications. To make your selection even more exact, Quadrant (manufacturer of Fluorosint®) has developed several Fluorosint® materials (207, HPV, 500) and each was specifically developed with a certain application area in mind.

Below is a Material Selector Guide that covers all of these materials in two easy formats. One simply compares how a product does in relation to heat and pressure. The other compares Fluorosint® to Rulon®, another common material for seals and gaskets. You can also compare the FDA compliant materials.

Material Selector Guide for PTFE Seal and Gasket Material

From materials suitable for average heat and pressure to the highest, this chart will help you to easily cross reference common seal and gasket materials.

 

Chart comparing Rulon to Flurosint

Compare test results of Fluorosint and Rulon and see at a glance what material fits your application.

As we go forward I’ll be looking at each of these products on an individual basis. But, if you see something here you like and you want to know all the details right now, we do have more information available on our website: Fluorosint Product Information. You can also talk to one of people. We have a knowledgeable staff that can help with any questions you may have about seal and gasket materials. Just call 877.246.7700 and you will be connected with the AIN Plastics office nearest you.

If you are along for the journey that’s great!  If seals and gaskets aren’t your thing, no worries, I’ll be talking about all sorts of other materials as we go. In fact, you can sign up and get our posts in your mailbox so you don’t miss the latest.

I hope you find these charts helpful in your search for that just right seal or gasket material. We’ll see you in the blogosphere again very soon!

Lisa Anderson

Marketing Manager
ThyssenKrupp Materials, NA
AIN Plastics Division

Do I Need to use DuPont™ Vespel®?

It seems like nearly everyday we hear about a new breakthrough advancement in plastics materials. From biodegradable to new engineering plastics and more. Why I just recently posted one on our Facebook about a new invention that is being called OLED (https://www.facebook.com/AINPlastics). These new products and materials have features we couldn’t even imagine 10 years ago. So how do you know when you need to use certain products and when could you maybe use something a little less costly?

In this blog post, I wanted to take a look at one product in particular that we’ve talked about before; DuPont™ Vespel®. There has been a lot written and said about DuPont™ Vespel® and it’s with good reason. It’s been around for a long time (Since the early 1960’s) and the DuPont™ Vespel® product line offers some pretty unique features. But it’s also not the most inexpensive to purchase so we’ve created an easy top 10 list of things to consider when making product selection and considering whether or not Vespel® is right for your application…

The Top 10 Things to Consider when Thinking About Whether or not DuPont™ Vespel® Is the Right Material for Your Application:

1. When you have a critical application such as aerospace or military where DuPont™ Vespel® may be the ASTM specified product. (See our post “When Saving a Little can Cost you a Lot”). If it is specified you can stop reading here. You’ll want to be sure you follow the standard.

2. When you want a plastic material that will hold up in a high temperature environment and not lose it’s properties. DuPont™ Vespel® SP-1 and SCP-5000 can operate in temperatures up to 550° F with excursions up to 900° F! In fact, SP-1doesn’t even have a melting point. Gheesh, I’m melting in our Michigan weather this summer, but as hot as it is here, we aren’t even close to those temps!

3. When you have a high load application such as a bearing.

4. When you are looking for weight savings DuPont™ Vespel® can be an excellent alternative to metals such as aluminum or metallic alloys, or ceramics. It’s properties may even exceed that of metal and ceramic.

5. When you are working in a critical testing environment and need a low outgassing product.

6. When you need a long-lasting material. Low friction and high stability along with heat and wear resistance mean your parts last longer and require less maintenance.

7. Variety. In the “S” product line alone DuPont™ has over 10 products to choose from. This can help to save money as you don’t always have to get all the bells and whistles, but instead get a product that fits your specific application needs.

8. An easy to machine alternative to ceramic. VDuPont™ Vespel® has electrical insulative properties like ceramic, but the ease of machining using standard machining techniques means it can cost less to fabricate Vespel than it does ceramic. This is especially true for design that include details like under cuts, holes, or threads. Vespel is also tougher than ceramic and it can take high impact.

9. When lubrication may not be viable or when you need a low wearing material that can withstand poor tolerances or when you need low friction to improve efficiency. DuPont™ Vespel® Bearing Grade SC and SCP possess some of the highest unlubricated pressure-velocity limits among engineering plastics.

10. When you need a plastic with high chemical resistance, or that will work well under hard vacuum, radiation, oxygen compatibility, cryogenic conditions, and exposure to flame.

Common Uses for DuPont™ Vespel®
Now that we have 10 considerations did you want to know what DuPont™ Vespel® is being used in? OK, we pretty much mentioned aerospace and military. But beyond that you can find Vespel in snowmobiles, ATV’s, farm equipment, and semiconductors. Since 1964 Vespel has been used in transmissions, small motors, brake pad assemblies, seal rings, valve seats, bushings, washers, thrust plugs, anti-lock break systems, fuel systems, turbo chargers, vacuum pumps, door hinge bushings, belt tensioners, gear stick rollers, rubbing blocks,wheel disc nuts, steering and air conditioning systems, suspension systems, intake and exhaust systems, piston rings. Handling of hot glass in manufacturing of bottles and hot runner systems in plastic packaging manufacturing are two more! In other words it’s pretty tried and true in a lot of applications. It may not be right for yours, but to find out see how many of your needs are in the top 10. After that if you need more detail on specific DuPont™ Vespel® products, take a look at the following links. They will take you to product technical data for each DuPont™ Vespel® material. If you don’t have the time to do all that comparing, give us a call and ask one of our people. We can help you determine if Vespel is right for you, and if so, which one fits your application best.

New Video Coming Soon!
Just a heads up…we’ve got a new video coming soon. Above we mentioned Vespel machines easily and in our video we will show just how easily DuPont™ Vespel® machines and we will offer some tips and tricks we’ve learned over the years that can help you get the best out of these materials.

Until Next Time!

Lisa Anderson

Marketing Manager

ThyssenKrupp Materials NA

AIN Plastics Division

Why Should our Business buy Material Through Distributors?

Aren’t I better off Cutting the Middle man out and Going Direct?
In our pop-culture world today we are barraged with phrases like “buy factory direct” or “manufacturer direct cost savings to you”.  Are these cost saving statements even true, or just snazzy marketing terms meant to get ones attention?  Furthermore, is it relevant to your business decisions?  I think its worth a laugh to imagine people traveling miles to stand in line for a gallon of milk outside of a dairy farm.  We don’t really think about distributors on a day to day basis, but companies like Costco and Wal-mart helped make the term “just in time” (JIT) part of our common vocabulary and those organizations, by definition, are distributors. They build relationships with the dairy farmer, the bread baker, the shoe maker. They then buy in bulk and move product you need to places where it’s easy to buy them all in one place. (The one-stop shop.)

Let’s Apply Distribution to the Industrial Market
Let me illustrate these same principles of the use of distribution into the industrial marketplace.  As an example lets consider a sector of the healthcare market. Medical

Medical Plastic Rod Colors

grade plastic shapes are used in the manufacture of surgical instruments and devices, healthcare equipment and the like.  The raw material for medical grade plastics come in a variety of colors, sometimes its for ease of identification purposes between various sizes, sometimes colors may be valued for the aesthetics of an individual brand.  The real problem could begin when a desired color isn’t a common/standard color.  For example we can get a ‘flamingo pink’ produced but it will likely require both a lengthy lead time for the resin and a minimum quantity to extrude the shape.  The volume needed for such customization is usually out of most individual customers reach especially while their end product is still in the proto-type stage.  Now imagine this special color, along with other common ones, used by a large volume OEM and they perceive their best price is to buy direct from the mill.  Let’s also keep in mind the price of material may not really be the same as the cost.  So why might this company consider buying via a distributor instead of direct?

The ‘What-Ifs’ of What Could and Sometimes Does go Wrong

  • There is a resin shortage in the market – it happens! Aside from the pain of the long lead time there’s now no room for error; in quality or inspection, quantity changes to accommodate an increase in demand.
  • Outside forces affecting production or shipping and delivery – power outages, hurricanes or blizzards, fire or flood, etc.
  • The mill accepted the order for the flamingo pink previously, but then there’s a capacity or another manufacturing issue.  Now it’s a triage situation.  Consider what then may happen with the common colors that this same customer needs or for that matter the whole industry is wanting to purchase.

The Benefits of Buying Through a Distributor

  • Manufacturers produce material and they are experts at it!
  • Our manufacturing partners are, and should be, the innovators of new and better plastic materials to the market.
  • Most often manufacturers are single location facilities and many have a limited

    Customers can benefit from the large steady inventory distributors keep. It can mean low minimum orders and shorter lead time to receive your order.

    logistical reach.

  • Tying up space in their facility in order to stock huge amounts of material for customers limits areas they could use to expand operations.
  • The same great application and technical resources are still available to customers through an approved distributor. In fact, sales staff at distributors can also be a great resource for technical advice as they have relationships with multiple customers using the same product.
What Exactly Does a Distributor Do?
  • A distributor ‘supplies’ material so managing and inventing inventory solutions and moving product to customers is what we do – its who we are.
    • Multiple Locations Close to you. ThyssenKrupp AIN Plastics Division has multiple facilities and more people in a local area that can assist customers, and still helps them in meeting vendor reduction goals.

      Distributors often have many locations stocked with product while manufacturers often have a single location. Multiple locations can mean shorter lead time, and product you need in stock.

    • Large Inventory all the Time. We already buy in bulk from all the world’s best manufactures of plastics shapes thus providing the same quality of material.
    • Enjoy the Benefits of low Minimums and JIT. Combining volumes of special material may alleviate large minimums to any one customer.  Keeping material in our warehouse and not the customer’s allows for product to be received only when its needed.  This not only frees up space but inventory dollars that could be used for other business purposes.
    • Less Lead Time, Fewer Headaches. A good stocking distributors who focuses on your particular industry helps ensure a smooth flow of product thus becoming a buffer between the end-user and the bumps in the market such as issues of lead-time, volatile pricing etc.

It Is Called a ‘Supply Chain’ –Let us Be Your Strongest Link!

Lin Poulin
Telemarketing Manager
ThyssenKrupp Materials NA
AIN Plastics Division

Citations

IAPD (international association of plastics distribution) “The Distribution Channel Value”, content provided from NAW (National Association of Wholesaler-Distributors) http://www.iapd.org/distribution value

Know This, marketing tutorial  “Benefits Offered by Channel Members” http://www.knowthis.com/distribution

TexasA&MUniversity, Department of Engineering Technology and Industrial Distribution program, http://etidweb.tamu.edu

Mergers, Takeovers, Healthcare Reform All Affecting Medical Device Market

Medical Device Manufacturers Delaying new Projects and Increasing Layoffs due to Unease Over Multiple Issues
CaduceusThe medical device manufacturers have had a volatile year so far with the impending device excise tax slated for 2.3% of total revenues generated to start 2013. In anticipation of this new tax many companies have delayed product development as well as New Product Introduction (NPI) until after the Presidential election in hopes that there is more clarity in regards to the excise tax.  Jitters within the EU have also contributed an overall uneasiness within the industry.  Major medical device companies like Stryker have already begun workforce reduction to the tune of 1,000 global employees from their workforce in the Orthopedics division with an estimated cost savings of approximately $100 million.  Former Stryker CEO Steve MacMillan in November of 2011, estimated the new tax will add an additional $150 million to their tax liabilities.  On Thursday, June 28, 2012 a spokesperson for Stryker stated that the added tax will eat into approximately one third of their R&D budget. Other companies such as Medtronic announced they will reduce their workforce by 1,000 employees globally across many of their business units, Smith and Nephew, and Covidien have also announced layoffs that began taking effect in 2011 and/or 2012 (see the Wall Street Journal for more)  With the House of Representatives recently  passing legislation (Health Care Cost Reduction Act H.R. 436) and the decision by the Supreme Court  on the Patient Protection and Affordable Care Act signed into law in 2010 by President Obama the excise tax slated for January 1, 2013 is starting to look like a reality. At this point it appears that the big guys are setting themselves up to operate more effectively and efficiently with expectations of continuing to meet market demands, while also trying to maintain the quality standards that are required. Who in your eyes are the best positioned companies as we move forward? Can you really reduce headcount without having a detrimental affect on quality? With yesterday’s ruling I think it is very likely we will see even more layoffs as the industry attempts to reduce staff to offset the additional tax liabilities.

The Upside to the Shifting Medical Device Industry
In addition to the health care reform debate and the recent Supreme Court ruling,  mergers and acquisitions have also played a large roll in making this a volatile year as large medical conglomerates continue to acquire competitors in order to balance and strengthen their portfolios and focus on areas where they currently do not have a strong market share position.  Most notably the acquisition of Synthes by J&J (DePuy) for $21.3 billion, strengthening their brand in the Spinal, Trauma and CMF segments.  The deal which was approved by the FTC on June 11, 2012 with a provision that it divest its wrist fracture system (DVR ) to Biomet. (see FTC article) Without the sale,  the new Synthes/Depuy portfolio for Distal radial fracture devices would have had 70% market share.  Synthes is the market leader for these systems with an estimated 42% market share,  Biomet also previously agreed to acquire Depuy’s trauma unit for an estimated $300 million. (click here to see Johnson & Johnson’s article) I believe we will continue to see market consolidation through the remainder of 2012 and through 2013 with a major focus on Chinese manufacturers being acquired for easier penetration into this emerging market for devices.  Other notable acquisitions: Asahi Kasei acquired Zoll medical ($300 million). Symmetry medical acquired Codman ($300 million) and Stryker acquired Orthovita for ($316 million), Memometal in France ($150 million) and Boston Scientific’s neurovascular unit ($1.45 billion).

Speaking of China…
With yesterday’s ruling by the Supreme Court to uphold the Patient Protection and Affordable Care Act, will we begin to see even more business transition over to China? Will it be India? How about Africa, where many of the MRO Aerospace operations have sprung up. Is this an option for the medical device industry? Will R&D transition over to Asia at a faster pace than was originally planned for these corporations? Not only did the device industry take a hit yesterday, but its been a tough week with the Senate passing the User Fee Act for Medical device manufacturers increasing it from $295 million over the last five years to $595 million over the course of the next five years. What’s $595 million over five years for the device industry? We shall see, it should be an interesting run up to the election and an even more interesting time after the general election.

What will Happen to the Growth we Have Seen?
Although there has been little in the way of growth for most of the last 12 months in the medical device industry,  there are some fairly sizable product developments churning at some of the larger OEM’s. There have also been some key innovators that have popped up over the last 36 months.  Will these new guys set new market trends and turn into a preeminent market leader on a new system or device?  Will the innovators be the ones that help turn around domestic manufacturing or will they be gobbled up by one of the big guys that is looking to acquire some IP to add to its portfolio and then shift the manufacturing offshore? We are in interesting times, how will it all shake out? Stay tuned, we will find out sooner rather than later and as things happen I will do my best to bring the facts to light so everyone can stay informed about changes to this very important industry.

Dave Piperi

Sales and Marketing Manager – East Region
Medical Materials
ThyssenKruppMaterials NA
AIN Plastics Division

 

Here are links to related articles and websites:

The Wall Street Journal – Excise Tax Article

Federal Trade Commission conditions on Johnson and Johnson

Johnson and Johnson article from their website

Synthes website