Plastic bags targeted
Governments across the country want to get rid of plastic grocery bags. Here are stocks that could be affected.
This is a growing trend nationwide. Cities across the country are quashing plastic bags in hopes that people will bring their own reusable bags when they shop.
Just for fun, I thought I'd look up which stocks might be affected by this movement. Here are some of the largest makers of plastic bags and polyethylene resins, according to the American Chemistry Council:
1. Dow Chemical (DOW). No surprise there. Dow has seen strong gains in its basic plastic business, and in April said that quarterly revenue had risen 48% from the year before.
2. ExxonMobil (XOM). The company says its chemical division is the largest supplier of polyethylenes in the world. Those are used to make plastic bags, foils and bottles.
3. Total Petrochemicals (TOT). The company says clean incineration is the only real answer to the plastic bag problem, and adds that the incineration of one bag produces enough energy to power a 60-watt light bulb for 10 minutes.
Other bag makers that aren't publicly-traded include Advance Polybag, Hilex Poly and Superbag Corp.
Wal-Mart (WMT) is trying to cut shopping bag waste at its stores by 33% by 2013, according to the Record. But a group of plastic bag makers is trying to fight this movement, pledging to have 40% recycled content in its bags by 2015. It's a losing battle, said one supermarket consultant.
"The demise of Styrofoam cups and packages was driven by our kids who learned in school about environmental impact," the consultant told the Record. "The next generation will not even consider a disposable bag."
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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