Harris County:
Recipient of Global Trends in
Manufacturing and Transportation
By: Curtis D. Spencer, President
IMS Worldwide, Inc.
Table of Contents
 Global Trends 2014-2019
 Manufacturing and Re-shoring
 Gulf Coast Resin Boom
 Other Harris County Trends
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Global Trends
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Five-Year Forecast for U.S. Imports via
Ocean Container
Compound Annual Growth Rates
Forecast developed by JOC Group economist Mario O. Moreno
9.6
6.7
6.7
4.1
1.1
1993-1997
1998-2003
2004-2008
2009-2013
2014-2018
Five-Year U.S. Exports via Ocean
Container
Compound Annual Growth Rates
Forecast developed by JOC Group economist Mario O. Moreno
8.8
7.4
3.5% With New
Resin Exports
2.5
2.4
1.6
1993-1997
1998-2003
2004-2008
2009-2013
2014-2018
U.S. Intermodal Volume Growth
In the first 37 Weeks of 2013 vs. 2014
In Millions of Intermodal Units
9.6
9.5
9.5
9.4
9.3
9.2
9.1
9
5.6% Growth
9
8.9
8.8
8.7
2013
Source: American Association of Railroads
2014
Global Sourcing
and
Manufacturing
Trends:
Re-Shoring and
New US
Manufacturing
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Manufacturing Grows in the USA
 New US-Domestic manufacturing that is made
competitive by new resources
 Natural Gas-new technologies unlocking new
sources of product which provides lower cost feed
stocks for plastics-PE and PP specifically but PVC as
well, now US is competitive with the worlds
producer
 New production capacity announced in North
America, 9 billion pounds of new production
through 2018, some will be on line as early as 2015
 Not all about “re-shoring” but about new industry
and manufacturing
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What is the Real Story in Near Shoring
• Boston Consulting Group’s report in 2012 had
everyone expecting “25% Re-Shoring to the USA
in the next 5 years” Not going to happen!
• There are indeed some evidence of Re-Shoring
coming back into the USA from Asia. Primarily in
heavier products/parts, highly automated
operations and those requiring quick engineering
changes in order to stay ahead of competition
• AND…we are seeing a huge ‘boom’ in basic,
heavy manufacturing being started up in the USAplastics, chemicals, steel, basic metals – all based
around Cheap Natural Gas for the next 100 years.
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What is the Real Story in Near Shoring
• New Aluminum Plants, New Steel Plants, New
Pipe Plants and basic Chemical Plants are all
coming online during the next 5 years in the
USA
• How? Cheap Natural Gas.
• And, we are seeing a resurgence in Mexican
Manufacturing in auto, home goods and other
“heavy products” for US consumption.
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Chemical, Resin and Plastics MFG.
• 191 new or expansions in petrochemical processing
• This is $117 billion in the US petrochemical industry
• By 2020, the cumulative impact will boost real GDP by
2.0% to 3.3%
• Creating from 2.7 million to as high as 3.6 million new
jobs.
• Representing cumulative capital investments totaling
$117.0 billion in the United States, fully 62% of this is
foreign direct investment.
• 62% of this investment is foreign direct investment
Source: American Chemical Council, 2014
Strong Investment in Ethylene
Exporting Plastic Resins
• In 2012, 15 billion pounds of thermoplastic resins was
exported, PVC was the leading export with a value of
$31.2 billion.
• Between 2005 and 2012, the U.S. went from being
among the highest cost producers of ethylene to
among the lowest cost producers globally.
• Today, the U.S. exports approximately 20% of its
production of PE and PP resins.
• When all the new capacity is created, we will export 30%-40% of the total PE and PP Production.
• What Supply Chain Routes will be utilized to Export
Resin?
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Supply Chain Routes for Plastics
• In the next 10 years, the Gulf Coast Producers will
be needing 350,000 to 400,000 new export
containers to capture the new Export Production.
(Source: IHS Global Insights 2014)
• Estimates today place 60% of that Resin will be
shipped directly out of the Port of Houston to
Asia, Europe and S. America
• 15-20% may travel to DFW for packaging and
then will route to West Coast Ports and on to
Asia.
• 10-15% will travel to Charleston/Norfolk for
European Destinations.
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Global Sourcing and
Manufacturing
Trends - Mexico
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Here is a look at the Evidence for Mexico!
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Since 2003, wages in Mexico have risen
25% compared to 218% in China
U.S. Dollar
2011-2013 WSJ
SOURCE: International Labour Organization, U.S. Bureau of Labor Statistics
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27
What do we see as the “Hottest Markets”
not on everyone’s radar
 Houston Gulf Coast – Resin, Medical, Manufacturing;
Insane levels of investment over the next 10 years.
 E-Com facilities in dense population clusters; re-working
value added space, cold, cooler, reefer space, for E-Com
same-day delivery.
 The entire “cold-chain” is growing! Target, WM and
others want to control back to the farms. Port of Houston
has a huge initiative for Cold-Chain Imports and exports.
 Our Firm is working on projects estimated to add over
80,000 New TEUs for the Port of Houston – Export, and
50,000 new TEUs Imported.
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Change in Employment (%) Top 20 Metro’s
July 2013 – July 2014
Source: HSBC and Greater Houston Partnership
Prepared By: Curtis D. Spencer, President
IMS Worldwide, Inc.