You’ve optimized headcount across the portfolio company. You’ve renegotiated the leases. You’ve squeezed every SG&A line until there’s nothing left. But there’s a good chance you haven’t seriously examined the 60–80% of COGS sitting in resin spend—and that oversight could be costing millions in unrealized value creation.
For plastics manufacturers, resin procurement represents the single largest variable cost. Yet somehow, it’s also one of the least examined areas in typical value creation planning—a blind spot that compounds with each month it goes unaddressed.
Standard PE value creation focuses on the usual suspects: labor efficiency, overhead reduction, revenue growth, working capital optimization. They all have established playbooks and plenty of operating partners who know how to pull them. Resin procurement, by contrast, rarely makes the 100-day plan.
The reason is straightforward. Most PE ops teams don’t have deep expertise in plastics, and resin markets are specialized, opaque, and a mystery to most outsiders. The index names—CDI, ICIS, IHS—mean nothing to someone who hasn’t worked in the space. The pricing mechanisms are arcane. The supplier dynamics are invisible.
So the default assumption becomes “the procurement guy knows what he’s doing,” and the topic gets deprioritized. Sometimes that assumption is correct. More often, though, the person managing resin purchasing is under-resourced, flying blind on market data, and maintaining supplier relationships that haven’t been competitively tested in years. They’re keeping lines running—genuinely valuable—but nobody asked them to optimize, and nobody gave them the tools to do it.
Consider a typical plastics manufacturer doing $50M in revenue with 60% COGS. Resin probably represents $25M or more in annual spend.
A 10% improvement in resin procurement—completely achievable for most companies that haven’t optimized this area—delivers $2.5M straight to EBITDA. At a 6x multiple, that’s $15M in enterprise value creation. At 8x, it’s $20M. These aren’t aggressive assumptions. They’re realistic outcomes that focused procurement optimization regularly delivers.
What makes this even more attractive is the risk profile compared to other levers. Revenue growth requires execution risk, market risk, and competitive risk. You need to win customers, launch products, or expand geographies—all of which take years and often disappoint. Procurement optimization, meanwhile, requires information and expertise rather than market luck. The savings are real, measurable, and usually realized within 12 months rather than a 3–5 year horizon.
When you compare risk-adjusted returns, the procurement opportunity often looks dramatically more attractive. Yet it’s consistently overlooked.
The PE firms capturing this value include resin procurement in their diligence process rather than treating it as an afterthought. They identify cost savings opportunities before acquisition, quantify the improvement potential, and factor that upside into their investment thesis. When they see a plastics manufacturer with unoptimized resin spend, they see value creation others miss—and price accordingly.
Specific red flags to surface pre-close:
These aren’t failures of effort. They’re failures of information and bandwidth. The tools needed to fix them simply haven’t been prioritized because nobody quantified how much money was actually at stake.
After close, the firms that capture this value bring in specialized market intelligence rather than generic consultants. Big-name firms can optimize your org chart, but they don’t know the difference between CDI and ICIS or why it matters for your contracts.
The winning approach treats resin like a commodities position requiring active management rather than a stable cost to set and forget. Results follow: 15–20% procurement cost reductions in year one are common, delivering EBITDA improvement that flows directly through to valuation multiples at exit.
For context, about 25% of ResinSmart engagements involve PE-backed companies—which tells you where focused money looks when EBITDA improvement is the priority. Resin is simply too large a category to ignore. Firms that recognize this build procurement optimization into their standard playbook. The ones that don’t leave millions on the table with every plastics investment.
Want to see how much value is hiding in your portfolio company’s resin spend? Request a ResinSmart demo and get a clearer picture of where procurement stands—and what better buying could mean for EBITDA.