November 15, 2024

Advertising: Selling Made in U.S.A., but Very Carefully

But many companies are stepping gingerly, avoiding sweeping claims and spelling out what “Made in the U.S.A.” means for their products. Consumers are more shrewd about how few consumer goods actually are made in the United States, leaving companies less wiggle room about the origin of products.

The Whirlpool Corporation, for example, specified in full-page print advertisements this year that 80 percent of its appliances “sold in the U.S. come from our U.S. factories.” Despite its deep American roots, the 101-year-old company — which makes Maytag, Amana, KitchenAid and Jenn-Air products — has, like other corporate giants, moved some manufacturing abroad.

As a result of its centennial celebrations last year, some consumers have urged the company to talk more about its American origins, said William Beck, a senior marketing director at Whirlpool, which spent $57.4 million in 2011 on advertising, according to Kantar Media, a WPP unit.

In recent months, the appliance giant has been underlining its American factories, and noting in its overall brand advertising that it employs about 22,000 workers (15,000 of them at its manufacturing plants), and spends $7.4 million annually on operating and maintaining its factories in Iowa, Ohio, Oklahoma and Tennessee.

But Whirlpool, whose ad drew a full-page rebuttal from the International Association of Machinists and Aerospace Workers accusing it of shutting factories in the United States, said nostalgia and similar sentiments do not drive its sales. “Whirlpool’s key differentiating points are quality and innovation,” said Mr. Beck, and “the icing is that, hey, we’re made in the United States.”

Whirlpool does not share its market research, but other market studies show that customers increasingly take note of where a product is made. Perception Research Services International, in a September study, found that four out of five shoppers notice a “Made in the U.S.A.” label on packaging, and 76 percent of them said they would be more likely to buy a product because of the label.

While shoppers, especially those over 35, say they want to help the economy by buying United States-made goods, “the motivating factors actually may be quality and safety,” said Jonathan Asher, executive vice president of Perception Research Services. The company, which is based in Teaneck, N.J., surveyed 1,400 consumers last summer. “People are paying attention in categories that are ingested like food, medicine and personal care products, but less so in electronics, office supplies and appliances,” he said.

In a separate study, the Boston Consulting Group found that 80 percent of consumers surveyed said they would be willing to pay more for “Made in the U.S.A.” products than for those carrying a “Made in China” label.

They would pay the biggest differential for items like baby food and wooden toys, and a smaller percentage for electronics, apparel and appliances, said Kate Manfred, director of the group’s Center for Consumer and Customer Insight in the Americas, which released the study in mid-November.

“Safety and quality, and keeping jobs in America, are the important factors,” she said.

Bixbi, a Boulder, Colo., pet treat provider, has relied on safety to increase sales. The company, which started in 2008 amid revelations of tainted dog food ingredients imported from overseas, sells dog treats made from locally raised chickens and other animals.

“Our sales have grown 600 percent each year,” said James Crouch, who founded the small company with his brother, Michael. “Locally sourced is a key advantage.”

Article source: http://www.nytimes.com/2012/12/24/business/media/selling-made-in-usa-but-very-carefully.html?partner=rss&emc=rss

Sasol Plans First Gas-to-Liquids Plant in U.S.

The company, Sasol, which is based in Johannesburg, has been a pioneer in a technology that has tantalized energy scientists for decades over its potential to produce liquid fuels without using oil, which has historically cost far more than natural gas.

Having already built smaller plants in South Africa and Qatar, Sasol has designed its new Louisiana plant to produce 96,000 barrels of fuel a day using its “gas to liquids,” or G.T.L., technology. It will be the second-largest plant of its kind in the world, after Royal Dutch Shell’s Pearl plant in Qatar, and will cost $11 billion to $14 billion to build.

“By incorporating G.T.L. technology in the U.S.A.’s energy mix, states such as Louisiana will be able to advance the country’s energy independence through a diversification of supply,” said David Constable, Sasol’s chief executive, at a news conference here Monday near the project’s planned location.

The facility will include a gas processing plant, a chemical plant and a refinery. All are required to perform the alchemy of converting natural gas into diesel, jet fuel and other chemical products.

What makes this southwestern corner of Louisiana attractive to Sasol is its proximity to bountiful shale gas fields just north of here and west in Texas. A boom in shale drilling has reduced the price of natural gas in the United States in the last four years by more than two-thirds, encouraging many energy and chemical companies to build and expand manufacturing plants around the Gulf of Mexico to produce a variety of petrochemicals.

Sasol estimated that the plant would create at least 1,200 permanent jobs and 7,000 construction jobs. Production is scheduled to begin in 2018.

The state encouraged the project with more than $2 billion worth of tax credits and other incentives.

The company said it would put off previously announced plans to build a separate gas-to-liquids plant in Canada, giving priority to the Louisiana effort.

The track record for the technology, conceived by German scientists in the 1920s, is not encouraging, mainly because of a history of construction cost overruns.

Shell’s Pearl plant in Qatar, built with Qatar Petroleum for $19 billion, was over budget by a factor of three and has had stubborn maintenance concerns. Many other oil companies have looked at the process and declined to make the huge investments necessary.

Only a handful of gas-to-liquid plants operate commercially in Malaysia, South Africa and Qatar, and they collectively produce a bit more than 200,000 barrels of fuels and lubricants a day — the equivalent of less than 1 percent of global diesel demand.

Nevertheless, Shell is considering building its own G.T.L. plant on the Gulf Coast. Sasol and the Malaysian oil company Petronas are building a plant in Uzbekistan, and Sasol is joining Chevron to build one in Nigeria. Rosneft is planning a pilot project in Russia.

Profits have been elusive for the technology. To make it work financially, natural gas prices must remain low and prices for oil, diesel and jet fuel must remain high for a prolonged period.

Natural gas and diesel prices have historically been very unpredictable, and if enough companies build gas-to-liquids plants or find other uses for natural gas, demand will rise, putting upward pressure on prices.

In the United States, various companies have plans to build natural gas export terminals and promote more use of compressed natural gas for vehicles, as is done in many countries like Pakistan, Iran and Argentina.

“If you didn’t have cost overruns, and if you didn’t have maintenance unscheduled downtime — if everything worked perfectly — then G.T.L. plants look pretty good on paper,” said Don Hertzmark, an international energy consultant who has worked on gas-to-liquids and other natural gas projects for 30 years. “These plants are only economic with very low gas prices.”

Mr. Hertzmark said that, with modest construction cost overruns, companies could make a decent profit on a gas-to-liquids plant. He said that at today’s price for natural gas in the United States, about $3.60 per thousand cubic feet, a company would need a retail price for diesel fuel of more than $4 a gallon — near the average price today — to make the process profitable.

At the news conference on Monday, Gov. Bobby Jindal said the Sasol project, which also includes a separate $5 billion ethane cracker to produce plastics and solvents, would be the largest manufacturing project in the history of Louisiana and one of the largest ever in the United States. “The global financial markets will be watching,” he said.

Article source: http://www.nytimes.com/2012/12/04/business/energy-environment/sasol-plans-first-gas-to-liquids-plant-in-us.html?partner=rss&emc=rss

Business Briefing | Company News: Newell Rubbermaid Will Consolidate Its Structure

Newell Rubbermaid, the maker of Rubbermaid containers and Sharpie pens, said it was simplifying its structure to find savings and to focus more on its high-growth businesses and markets. The new structure, effective on Jan. 1, will reduce the number of operating groups to two from three, with one for consumers and the other for the professional market. Newell will also consolidate its manufacturing plants and distribution centers. The changes will result in 500 layoffs, primarily white-collar jobs. The company also reported better-than-expected earnings and affirmed its full-year outlook. Newell reported a net loss of $177.6 million, which included a one-time charge of a charge of $382.6 million. Shares of the company rose 11 percent, to $15.36.

Article source: http://feeds.nytimes.com/click.phdo?i=ee53d20720cdc45fd69efae21ffe7e5a