The volume cost of a raw material input is the purchase cost
of a unit volume of the material.1
It is extremely
important to understand the volume cost of polymers and their
additives as this plays a key role in their selection for a
Price is one of the first
characteristics of a polymer that a designer looks at before
specifying it as the material of construction. Prices vary from
time to time, sometimes wildly, but tend to maintain their
proportion in respect to other polymers. The recent prices of
the commodity thermoplastics, using average prices, are shown
in Table 1.
While it would appear that UPVC is
by far the cheapest polymer, the natural question is: why does
it have such limited applications in eg. moulded products?
Assuming that UPVC is as easy to mould as the other commodity
thermoplastics, why is it not used in widespread applications
such as plastic buckets?
At this point we have to focus on an important polymer property
that is often overlooked - fortunately this is not a
property which changes with time or location!
| Table 1: Prices of
|Low density polyethylene
|High density polyethylene
|High impact polystyrene
|Acrylonitrile butadien e styrene
The density of a polymer (see
Table 2) is measured from a fully gelled and fused sample
and should not be confused with bulk density, which is the
apparent density of the granules or powder that the polymer is
sold and measured as prior to processing.
Bulk density has more relevance to
rate of flow through the hopper throat of the processing
machine, tendency to bridge/stick and other handling and
storage considerations. Bulk density can change depending on
particle size/shape, but density of a polymer is constant.
When the volume cost is plotted, a
completely different picture appears. Polypropylene now becomes
the cheapest (see Figure 1).
In the case of the household plastic bucket, it is interesting
to note that in India these were first moulded in LDPE in the
early 1960s. As HDPE became available in the late 60s,
its lower volume cost was one of the reasons why there was a
wholesale shift by bucket manufacturers to HDPE.
| Figure 1: Polymer price vs. volume cost
Of course the better stiffness and
warm water resistance of HDPE were major factors for the shift,
but the lower volume cost helped to keep bucket moulding firmly
in the polyolefin family.
In the 1990s, polypropylene had
also made inroads into the bucket market; aided no doubt by its
lower volume cost though its superior clarity, although
stiffness and temperature resistance were also factors.
It is smart marketing which has
positioned the clearer and stiffer PP bucket as a premium
product sold at higher prices than its HDPE counterpart. As
they say, pricing depends on marketing policy while
costing depends on facts, and the fact is that the volume
cost of the higher-priced PP bucket is lower than the HDPE one.
That is to say that if PP and HDPE are injected into the same
bucket mould volume, lesser amount of PP in kilograms would be
It is a separate matter that the PP bucket mould would be
different with perhaps a thinner wall to cash in on PPs
higher rigidity, but the reality of better volume cost remains.
PVC has never been in the picture because of its higher volume
cost - if its volume cost had been lower than the
polyolefins, ways and means would have been devised to mould
PVC into buckets!
| Table 2: Polymer density
This example is simplified and
there are of course many factors which have to be considered to
select the correct plastic for a specific application, but the
point to take away is that volume cost is a less understood but
extremely important factor.
On the basis of volume cost, when
chief of R&D of VIP Industries, a leading Indian moulded
luggage producer, the author formulated a directive to the
companys luggage designers that any new plastic component
should be designed with PP copolymer unless the design intent
could not be met by the properties of PPCP. Only then was there
a need to look at other higher volume cost polymers.
Importance to the plastics formulator
The consideration of volume cost is even more important when
polymers are compounded with additives. The density of the
final product can change considerably especially when mineral
fillers are added primarily to reduce costs.
Volume cost and its implications are not properly understood by
many entrepreneurs, formulators and people undertaking cost
reduction/value engineering. It is vital to understand its
implications before embarking on cost reduction
| Table 3: Summary of volume costs for PVC
|Formulation cost Rs/kg
|Volume cost Rs/lt
|% Reduction in
|% Reduction in
Most plastic products are sold by
volume. They are priced either per piece (mouldings) or per
unit length (pipes, cables, tape) - thus the costing and
pricing are for fixed volumes. As the plastic raw materials are
always purchased per unit weight, the tendency is to calculate
cost on a per kilogram basis, and the finished product is
priced accordingly to the weight per piece.
However, in the marketplace,
competitive pressures often force the entrepreneur to offer
discounts to protect market share. The discount is normally a
percentage of the existing selling price, which, in the
majority of cases is the realisation on volume basis.
If costs are calculated on a per
kilo basis, often the reduction in cost by adding
fillers/extenders is calculated as a percentage of original
formulation cost. The savings may be translated into a price
reduction based on this percentage.
After some time the entrepreneur
realises that he is sustaining losses as the reduction in
volume cost was nowhere near the per kilo cost reduction on
which the discounts were based, especially when mineral fillers
are the main cost reducing input. All mineral fillers have a
higher density than most plastics.
Rigid PVC pipes are a prime
example. The ease with which calcium carbonate can be loaded
and processed by modern twin screw extruders has led to
mindless loading of fillers in a desperate bid to reduce costs.
The pitfalls are many as is illustrated by the calculations in
Tables 3 and 4.2
It is interesting to note that even
though these are theoretical calculations, the predicted
density is quite near the actually measured density, with the
difference being a few points in the third decimal place.
Rarely do we find errors in the second decimal place. Assuming
that the pipe is gelled fully and has no voids, the density
figures predicted are quite close to actual densities.
There is some volatile loss, but in a pipe formulation this is
a low percentage. The graphical representation shows the big
difference in the reduction in cost when measured per kilogram
and the volume cost (Figure 2).
| Figure 2: Volume cost vs.
per kg cost
By adding 50 PHR calcium carbonate,
which is not unusual in commercial grade PVC water supply pipe
(in India some processors sell such pipes for water supply,
albeit for irrigation), and in the non-pressure applications
like SWR, the expected cost reduction appears to be a healthy
However, in actuality, the volume
cost has reduced only 11%. Such a high loading of filler not
only ruins the pipe impact strength and pressure resistance,
but the wear and tear on costly twin screw equipment is severe.
Thus it is not worth sacrificing so much quality deterioration
and machine life reduction for a mere 11% reduction in
This should be understood by all
PVC pipe manufacturers and other sectors which rely on dense
mineral fillers primarily for cost reduction. Of course nobody
makes pipes with 0 PHR filler, and around 8-10 PHR filler is
the optimum level for good quality pipe conforming to BIS 4985
(Bureau of Indian Standards), which is in line with the DIN and
British Standards for pressure PVC pipes.
Screw barrel life is of acceptable
levels, and it is heartening to note that most of the quality
conscious PVC pipe manufacturers have persisted with such
formulations and have been successful in the long run.
It is when higher loadings are
resorted to for cost reduction that a vicious cycle starts. Let
us say a manufacturer increases his filler loading from 10 PHR
to 40 PHR. Relying on formulation costing he expects a
reduction of 15.5%, and so reduces the price of his pipes by
15% from his BIS 4985 price.
However his cost per length of pipe has gone down only by only
6.5% (the volume cost reduction). Soon the producer finds out
that he is losing money, so what is the next step? More filler
loading coupled with decreasing the wall thickness of the pipe,
deteriorating quality even further: and the downward spiral in
quality and shrinking returns continues (see Figure
| Figure 3: The filler-based
cost reduction trap
The author hopes those PVC
processors tempted to take the high filler route pause and
rethink their strategy. One of the reasons that so many PVC
pipe and profile extrusion firms have collapsed and closed shop
is that they got caught in this vicious cycle: higher filler
loading, decreased wall thickness, product failures, and
compensation claims - trapping the company with heavy
What has been highlighted above is
a most dangerous trend. Many polymer applications in India have
faced declining demand due to loss in confidence of the
consumers because of repeated failures of poor quality, cheap
products. Examples are too numerous, and it is most saddening
to persons and companies who have worked so hard in
establishing such applications.
| Table 4: Volume costs of
PVC formulations for PVC pipes
In the pipe field itself one can recall the hammering HDPE
pipes took in the early 1980s due to large scale failure of
pipes made from offgrade/scrap HDPE and sold to prestigious
government projects as prime grade pipes. While HDPE pipe
markets languished because of the bad name, PVC pipes surged
Even major companies like
Polyolefin India Ltd, a Hoechst licensee, were so badly
affected that they had to stop the manufacture of their well
established Hasti brand HDPE pipes. It has taken two decades
for HDPE pipes to claw back to good volumes, which involved
consistent quality and development of new application areas
like drip and sprinkler irrigation, gas piping, large diameter
sewerage pipes etc., as well as consolidation in the core water
supply sector with good quality pipe with second generation
A dangerous fallout of mindless
filler loadings is when markets change from pricing per piece,
or - in the case of pipes - per unit length of
specified thickness to pricing on a per kilo basis. Such a
change encourages higher filler loadings and should be resisted
by all discerning manufacturers.
In plastics, heavier
does not mean stronger: physical properties are
seriously compromised in PVC products made heavy by excessive
With polyolefins, the situation is different. Here fillers like
talc and calcium carbonate are added to improve stiffness to
PP, or desired properties like anti-fibrillation in HDPE or PP
| Table 5: Volume cost of major ingredients
||% cost of resin
||Volume cost (Rs/lt)
||% resin volume cost
Incorporation of fillers in
polyolefins is an expensive process, requiring costly
co-rotating twin screw extruders or sophisticated equipment
like Buss Ko-Kneaders. Compounding costs for filling
polyolefins can be as high as Rs. 10-15/kg (US$250-350/tonne),
while in PVC the increase in dry-blending cost with filler
addition is negligible.
Filled polyolefins (10-30%) are
costlier than the base polymer because compounding costs
outweigh the lower filler cost. The volume costs go up sharply,
but requirements of better stiffness in auto components,
moulded furniture and other technical parts is the driving
force for filler addition.
It is only at filler levels of over 40%, as in filler
masterbatches, that the cost per kilo dips below polymer cost
levels, but the volume cost will be adverse. Thus normally
filler addition does not automatically lead to cost savings
with polyolefins as it does with PVC. This is why polyolefin
pipes cannot be cheapened by adding filler, as in PVC, and it
is volume cost considerations which determine this.
| Table 6: Volume
cost - formula 1
|Cost per unit
Glass-filled and fibre-filled
polymers are a special case with the fillers price sometimes
exceeding the polymer prices. It should be obvious that glass
filling is done purely to improve mechanicals.
In flexible PVC, considerations of
volume costs come into play. Large amounts of plasticisers and
extenders (secondary plasticisers) are used. The volume cost
calculations are similar, though the contraction in volume in
flexible PVC compounds is slightly more because of volatile
constituents in the liquid added.
A simple example of a soft PVC
compound stabilised with a mixed metal stabiliser/ESO mix is
shown in Tables 5-7. It is interesting to note how the relative
costs of the other ingredients change in relation to PVC resin
when viewed from the volume cost angle.
Plasticisers like DOP, which per kilo is much more expensive
than resin, have always been thought to be the reason why
plasticised PVC is costlier than RPVC. But DOP, for example, is
not that costly from the volume cost viewpoint. In fact when
PVC prices had flared up, DOP was actually cheaper than resin
on a per litre basis. Chlorinated paraffin (CP), a secondary
plasticiser that is very popular in India, is cheaper than
| Table 7: Volume cost - formula 2
|Cost per unit
|Reduction (from formula 1)
As the tables demonstrate, an
expected cost reduction by tripling the filler loading is
considerably eroded on a volume cost basis.
Secondary plasticisers like the
popular chlorinated paraffin family have a higher density than
the primary plasticiser. The higher the chlorination, the
higher the density and thus the lesser the cheapening
Apart from fillers, CP is the
favoured cost reduction tool. It takes considerable skill to
balance the compatibility with the chlorination level of the CP
selected with the addition PHR to achieve an effective cost
reduction without compromising quality.
Compounding of moderately filled
plasticised PVC compounds can be handled by single screw
extruders. Unlike UPVC compounds, normally plasticised PVC is
processed after a pelletising pass.
With single screw extruders,
compounding costs are low compared to filled polyolefins.
However, as filler loadings increase over 40-50 PHR, even
flexible PVC requires intensive compounding equipment with much
higher compounding costs (examples: cable sheathing
This cost increase has to be
factored in for determining the cost savings while boosting
filler levels in flexible PVC. Needless to say, the reduction
in volume costs compared to unfilled/lightly filled
formulations is less in comparison to UPVC, as the base
unfilled compound has a lower density than that of UPVC.
Instances of soft PVC products
which are sold by weight are too many for comfort for
discerning persons working for healthy growth of the PVC
industry. Agricultural hoses, low quality cables, and some
small mouldings are sold by weight. Customers do not realise
until after using the product that they have got less actual
product, whether in terms of per metre or numbers when he buys
such highly filled products with attractively low per kilo
The industry as a rule should
discourage per kilo prices for finished products, although raw
materials are always sold by weight.
There are other ways of reducing
costs which do not impact quality and offer value for money.
The author hopes PVC processors will explore and exhaust all of
these other routes before increasing filler levels. If so this
article on volume costs would have served its purpose.
Contributor: Siddhartha Roy is a chemical engineer
from IIT Kharagpur (1968). He has worked with plastics
throughout his career and was actively involved in development
of PVC markets and applications, especially pipes and fittings.
Roy worked with Shriram Vinyls, PRC (now DCW) and Chemplast,
manufacturers of PVC resin and compounds. He has managed a PVC
pipes and fittings factory in Kuwait and helped Jain Pipes (now
Jain Irrigation) set up their pipe production facilities.
Roy headed R&D at VIP
Industries, Nasik, and is well versed in the processing of
polyolefins, styrenics, polyamides and PC. He has been active
in the Indian Plastics Institutes activities and was
recently awarded the Fellowship by the governing council of IPI
for his contribution to the plastic industry.
1 Volume cost (Rs./litre) = Purchase cost (Rs./kg) x
density (kg/litre or gm/cc)
2 Explanatory note for international readers: While
ratios between polymer prices would be roughly the same
globally, the price ratios of PVC resin and important
compounding ingredients like calcium carbonate fillers,
stabilisers and pigments could be very different from country
to country. This is because the taxation tariffs are quite
different for polymers and minerals. Also the mineral filler
prices have a major transportation cost element especially for
the cheaper GCC grades.
I have intentionally calculated the costing with individual
compounding ingredients in a classical lead stabilised twin
screw pipe formulation. The calcium carbonate price is for a
precipitated uncoated grade. One pack stabiliser lubricant
systems are the norm in India as it is globally, but there is a
paucity of density data for such one packs. It is more accurate
to calculate volume cost with well documented densities of the
separate ingredients. An interested reader could redo the
calculations with their local price data and the one pack
density if it is known. My guess is though the percent cost
reductions may vary, the pattern will be in line with my
3 The pressure to cut costs is surely not restricted to
Indian markets. I am sure worldwide that cost reduction of PVC
pipes with fillers is endemic, but it should be within limits.
Addition of fillers is the easiest way out of the many avenues
available to cut costs, but the dangers of doing so blindly
without heed to volume costs would lead to disastrous results
similar to those illustrated in Figure 3.