By Alan D. Fischer
ARIZONA DAILY STAR

Aaron J. Latham / Staff Graphite die cutter mold, left, and the finished cellphone-faceplate die that will be used in injection molding at Catalina Tool & Mold.

Strong consumer demand for hand-held communications devices - including the ever-present cellphone - has offered the local plastics-manufacturing industry a big boost.

"Plastics is strong now," said Stephanie B. Lemme, director of economic development at the Tucson Metropolitan Chamber of Commerce. "The industry in Tucson grew almost 50 percent from 1993 to 1998."

And state industry officials plan to take advantage of the next-generation medical, high-tech and automotive industries' growing needs for their plastic products, said Wayne A. Lundeberg, vice president of the Arizona Plastics and Advanced Composite Materials Cluster.

"There are lots of industries that are still looking at plastics," he said, for items such as disposable precision medical products; strong, lightweight vehicle parts; and communication devices.

The industry continues to use longstanding production techniques: injection molding, rolling molten plastic into products, coating items with melted materials. But new manufacturing technologies and high-tech materials have expanded the scope of what can be made from plastic.

Arizona is the nation's eighth-fastest-growing state for plastics industry shipments - which totaled $2.5 billion statewide in 1999, a 66 percent increase over five years - according to the Society of the Plastics Industry. Arizona had 312 plastics industry facilities with 13,700 employees in 1999, according to society. There are about 50 plastics firms in the Tucson area; a study to determine their collective employment and revenues is still under way.

Pima, Maricopa and Pinal counties had 7,802 plastics industry jobs, 248 facilities and $1.6 billion in shipments in 2000, according to the SPI Economic Report published by the society.

Lemme, the principal investigator for the "Plastics Industry in the Tucson Area: an Industrial Analysis and Community Assessment" study released Nov. 1, said high-tech industries continue to drive the plastics manufacturing market.

"Just look at all the wonderful things sitting around on your desk made of plastic," she said. Examples include desktop and laptop computers, phones, pagers and hand-held non-keyboard computers and organizers.

Another growth area for plastics is optics, said Brian C. Catts, director of the industry relations program at the University of Arizona Office of Economic Development. Improved materials and manufacturing processes made this possible.

"Twenty years ago plastics were not an optical substitute for glass," Catts said. "Plastics have brought down fabrications costs dramatically - you can mold plastic, and you have to grind and polish glass."

New local arrival Plastic Moldings Corp. is a good example of the local industry's growth. The company will begin shipping injection-molded cellphone parts from its new 100,000-square-foot Tucson production facility next month, said general manager Tom Rudolph.

The firm plans to employ 20 to 30 in the first quarter of operation, ramp up to 80 to 90 by the third quarter and grow to about 200 workers after three years of operation, Rudolph said. The operation's nine injection molding devices will be expanded to 36, he said.

"We will pursue the small- hand-held device market: cellphone housings, Palm personal computers, pagers," he said.

He said the facility will offer a full array of services, including injection molding, painting and plastic component assembly.

Several factors led Cincinnati-based Plastic Moldings Corp. to select Tucson, he said.

The city's proximity to San Diego, a hotbed for cellphone manufacturers, and closeness to Guadalajara, Mexico, where much of the industry's electronics assembly is done, helped the selection process, he said.

Local officials' enthusiasm also helped attract the company.

Rudolph said Plastic Moldings Corp.'s president, Tom Hennings, contacted all the mayors of cities on the firm's short list of potential sites. "Of the mayors called, Mayor (Bob) Walkup was the only one who called back," Rudolph said.

In addition, agencies like the Greater Tucson Economic Council were strongly involved in attracting the company to Tucson by showing what the area offered and by helping make the move work, he said.

And Tucson's free-trade zone - where goods may be unloaded, stored or shipped without paying customs duties - offers the company a competitive advantage over other locations, he said.

Industry officials are working to attract companies that purchase components and combine them for resale - original equipment manufacturers, or OEMs - to offer local plastics operations a strong nearby demand for their products, Lundeberg said. "Our No. 1 issue with economic development still remains: We need more OEM business in Arizona, and I can't emphasize that enough," he said.

Lemme of the Chamber of Commerce said efforts to recruit OEM companies are ongoing.

Some customers for locally produced plastic items include Raytheon Missile Systems, Applied Image Group, Bombardier Aerospace, Rain Bird Sprinkler Manufacturing Corp., Microsoft Corp., Motorola Inc., Nokia, Siemens, AT&T Corp., 3M and J&M Corp.

Raytheon uses composites and plastics for missile components and coatings, said David Hollywood, department manager for materials and process engineering at the firm's Tucson site.

He said the high-tech materials offer Raytheon's products lighter weights and lower costs than metal parts, each of which requires precise machining.

"My design staff is interested in the utilization of more composites," he said. "I would say it's increasing."

The company is also considering composites for the sealed canisters that contain the missiles when they are shipped and loaded into launchers.

Raytheon regularly evaluates the newest developments in plastics and composites for possible product applications, Hollywood said.

Most of the Arizona plastics industry's products are exported, offering a strong stream of new money to the state.

"The easiest way of looking at it is, dollars from somewhere else are coming into our economy. Money is coming in from outside Tucson and is getting regenerated into our economy," Lemme said.

She said one-third of Tucson's plastics operations actively export their wares. Arizona plastic and rubber exports to Mexico increased by 163 percent between 1993 and 1998 - from $70 million to $184 million, she said. From 1997 to 1998 plastic and rubber exports to Mexico increased by 37.6 percent, outpacing growth rates for other Arizona exports, according to a U.S. Census Bureau study. Maquiladora plants south of the border played an important role in the growth.

In comparison to the industry's strong export growth, Arizona's exports in the "all products" category increased by 1.5 percent from 1997 to 1998 and by 83.3 percent from 1993 to 1998.

Lemme looks for a bright future for the industry: "It will definitely pick up pace as a growing industry here and continue to employ a significant number of people here."

* Contact Star Business reporter Alan D. Fischer at 573-4175 or at afischer@azstarnet.com.