GSP Expiration Increases the Cost of Materials in High-Demand Industries

Penn Pac, a small business in Manheim, Pennsylvania, provides slitting, warehousing, and distribution services for companies in need of packaging film. Penn Pac imports polypropylene sheets from suppliers in Brazil, including Vitopel and POLO Films.  By collaborating with plastics suppliers, converters, and the end-users, Penn Pac helps reduce the overall cost of packaging materials for its customers.

More than 99 percent of the polypropylene sheets imported from Brazil in 2010 entered duty free under the GSP program, eliminating the 4.2 percent tariff.  Brazil, India, Indonesia, and Thailand all export polypropylene sheets to the United States.  Total imports under GSP exceeded $63 million in 2010 and saved American companies more than $2.6 million.

What separates Penn Pac from many companies is its continuous investment and expansion since 2005, even during the economic downturn:

In 2005, we built a new 60,000 square foot facility… In 2007, we added a new 76” high-speed 3-inch core splitter… This enabled us to do an additional 9 million lbs in slitting capacity. With the demand increasing again…we welcomed a new 65” converting center, which allowed for an additional 8 million lbs. slitting capacity. 2009 brought with it another 9 million lbs slitting capacity and in 2010, we celebrated the arrival of another 23 million lbs slitting capacity!

Penn Pac President Bill Palmer credits this to strong customer demand and a “can do” attitude.

Yet someone has to pay the higher costs associated with GSP expiration.  Companies like Penn Pac can often pass cost increases along to their customers, but that doesn’t mean they won’t be hurt by higher prices.  After all, if customers can’t afford to buy as much, there’s no reason to keep expanding.

 

This entry was posted in Brazil, Company Stories, India, Indonesia, Pennsylvania, Thailand. Bookmark the permalink.

One Response to GSP Expiration Increases the Cost of Materials in High-Demand Industries

  1. Pingback: Digging Deeper into the 2010 GSP Import Data | Renew GSP Today

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