Faced with sluggish sales and rising public concerns about cholesterol, Olson Industries in Sherman Oaks sold its egg-production division in 1987 to concentrate on the production of plastic containers--an industry that had been experiencing skyrocketing sales.
But since the switch, the firm has been losing money, partly because the sky itself has become a limit.
The prime ingredient in the plastic trays used by Olson's customers--companies like the McDonald's fast-food chain--had been chlorofluorocarbons, but a major campaign has been mounted against the use of the chemicals because they erode the ozone layer that shields Earth from cancer-causing ultraviolet rays.
So Olson must use a new, more expensive, ingredient. In all, the firm spent $1 million last year to switch its plant from CFCs to a more benign ingredient, according to Olson Chairman John Buffington.
'Right Thing to Do'
"We're struggling," he said. "The conversion is a factor. It means we have to relearn how to make the product. But it's the right thing to do."
Olson's industry--producers of foam plastic trays and cartons for grocery stores and containers and cups for fast-food restaurants--is the first to be so powerfully affected by the worldwide campaign against CFCs, a gas or liquid substance still used by makers of air-conditioners, refrigerators and electronics equipment.
But under a plan endorsed by governments, CFC producers and industry, chemical firms will dramatically cut or eliminate their CFC production by 1998 and will offer substitute products.
The anticipated cost increases will be passed on to the manufacturers that use the products and--in some cases--to consumers.
Olson, the nation's largest producer of plastic egg cartons, and other food service packagers took the lead in the campaign against CFCs. The company switched to an ingredient called hydrochlorofluorocarbons after joining the rest of the nation's foam plastic packagers last April in an industrywide pledge to eliminate harmful CFCs from the manufacturing process. HCFCs are considered to be much less damaging to the ozone layer.
Softer, More Pliable Forms
The pledge drew praise from environmentalists, who applauded again when the industry's trade association--the Washington-based Food Service and Packaging Institute--two weeks ago presented a progress report announcing that American producers of foam plastic food packaging have virtually eliminated CFCs from their plants. The industry had relied heavily on CFCs, a so-called blowing agent, to expand plastic into its softer and more pliable forms.
"They (foam plastic packagers) have responded very well," said Christian Rice, a spokesman for the U.S. Environmental Protection Agency. "They've gone out on their own and eliminated CFCs ahead of schedule."
The reduction schedule was established by the United States and 45 other governments through the Montreal Protocol, a 1987 agreement designed to cut CFC production to 50% of the worldwide 1986 levels by 1998. U.S. companies are still responsible for about 30% of the world's CFC production, estimated at about 2 billion tons in 1986, according to the EPA.
Under the Montreal Protocol, CFC production is to be reduced and frozen at 1986 levels beginning July 1. This first phase will force U.S. companies--five firms produce the nation's CFCs--to reduce production by about 20%.
Production must be reduced another 20% by 1993 and by another 30% by 1998, under the plan. However, the situation has become more urgent since the gathering of the signers of the Montreal Protocol.
Researchers recently discovered a CFC-related buildup capable--depending on weather conditions--of destroying the ozone layer above the North Pole at a rate of up to 1% a day. A depletion of only 1% of the ozone layer increases ultraviolet penetration by 2% and adds 4% to 5% to the risk of skin cancer, according to scientists.
Scientists found that chlorine-containing molecules from the CFCs accumulate on the ice in stratospheric clouds, which are found only at the poles. When sunlight strikes the molecules, the reaction on the cloud surface destroys ozone much faster than reactions elsewhere in the stratosphere.
Responding to these and other findings, representatives from the United States and more than 70 other nations are scheduled to gather in London next week for "Saving the Ozone," a conference designed to help countries find ways to meet the goals of the Montreal Protocol. Also, environmental ministers of the European Community on Thursday commited the 12 member nations to try to ban all production of CFCs by the end of the century.
In addition, Washington sources say that the Bush Administration will soon call for the complete elimination of CFC production by the end of the year 2000. The move could come as early as today, the sources said.
The biggest producer of CFCs--E. I. Du Pont de Nemours--says it plans to stop production of CFCs by the end of the century. The company, which developed the CFC substitute for the foam plastic packaging industry, is trying to find alternatives for other CFC users.
The substitutes will cost two to five times more than CFCs, but Du Pont will not reap a windfall, according to Kathy Forte, a spokeswoman for the giant chemical firm, because the company will be recouping funds spent on the development of the alternative materials.
Air-conditioning producers account for the largest share of CFC use in the United States, about 33%, according to 1986 statistics, the latest available. In contrast, food packaging for restaurants and grocery stories, represented only about 3% of the total.
However, many people are under the impression that producers of foam plastic for food service are responsible for much more of the CFC use, according to Nancy Sherman, a spokeswoman for the Washington-based Food Service and Packaging Institute.
"In surveys," Sherman said, "people say we account for 20% and some say we produce 50%. We've been blamed because our products are so visible. We're very concerned because people misperceive our product."
Responding to public concern over foam plastic, some local governments--Los Angeles, Berkeley, San Francisco, and Suffolk County, N.Y. among them--have banned the use of foam plastic made with CFC, targeting restaurants. The Los Angeles ban will take effect July 1.
In addition, some fast-food chains no longer accept CFC-produced containers.