Reifenhäuser readies for shale gas boost

By Don Loepp
Editor

Published: April 11, 2013 5:03 pm ET
Updated: April 12, 2013 2:06 pm ET

Image By: Plastics News Editor Don Loepp Clockwise from top left: Ulrich Reifenhäuser, Steve DeSpain, Dave Larson and Jim Snell.

Related to this story

Topics Machinery, K 2013
Companies & Associations Reifenhauser Inc.

ORLANDO, FLA. — It may be a K show year, but that's not stopping a major German machinery company from making 2013 all about North America.

Part of the reason is the shale gas boom and its looming impact on the global polyethylene market.

Troisdorf, Germany-based Reifenhäuser GmbH & Co. Maschinenfabrik, a major manufacturer of extrusion equipment, is pursuing a USA-first attitude this year. The company is moving its North American headquarters to Wichita, Kan. — the home of Westland Corp., a screw maker the German company bought in December.

Reifenhäuser also is sponsoring a series of free, one-day flexible-packaging seminars in June across the U.S., to talk to customers about key trends in the market.

Managing Director Ulrich Reifenhäuser said the company sees great growth prospects in the North American flexible packaging market, in large part because of shale gas.

"This fiscal year [in North America] is very, very strong, the best in 15 years. Last year we had a focus on China; it was our China year. This year is for the U.S.," Reifenhäuser said at a news conference in Orlando.

"What we see is our customers are looking at new investments. They are fed up with Chinese plastic goods coming here. They want to make products themselves," he said.

The real impact of shale gas on the PE market is a few years away. Ethane from natural gas can be used to make PE feedstocks, and new natural gas discoveries have led to a surge in PE expansion announcements. But most of the new capacity, an estimated 11 billion pounds, will come online in the next five years.

Reifenhäuser said his flexible-packaging customers already are preparing to take advantage of the boom.

On the film extrusion side of the market, the first companies to add capacity may be those that make sacks used to transport resin, said Steve DeSpain, vice president of sales and general manager of Reifenhauser Inc., the company's North American unit. Resin industry analysts expect North America to boost PE exports significantly as new capacity becomes available. Much of that resin will be transported around the world in PE sacks.

"We're already seeing customers looking well enough ahead, and more are going to be doing so," DeSpain said. "We see near-term growth, but also long-term. We see the flexible packaging industry growing.

Reifenhäuser added: "When we talk to customers, the willingness to invest is there. They grasp the possibilities offered by this shale gas."

Longer term, he expects growth in food packaging, where Reifenhäuser offers 7- and 9-layer lines that offer benefits over commodity films.

Another important part of Reifenhäuser Group's emphasis on North America this year is the fresh acquisition of Westland, which is now called Reiloy Westland Corp. Reifenhäuser's Reiloy Metall unit makes screws and barrels in Germany.

Buying a U.S. company was a big step for Reifenhäuser, which until now has done all of its manufacturing in Germany. The family-owned company was founded in 1911 and got into plastics after World War II.

"It's a strong step. It's a first step," Reifenhäuser said of the Westland deal. "It symbolizes how we want to participate and react to this [U.S.] market, which is still the largest global market."

Reifenhäuser talked about how the company recovered from the 2008-09 recession, when sales dropped to about 100 million euros — just 30 percent of the 2007-08 level. But the company managed to keep its expertise, thanks to a German government program that allowed employees to work short schedules and still collect partial unemployment benefits. As a result, Reifenhäuser has seen sales recover sharply, to about 450 million euros. But much of that growth is outside Europe — with the exception of a few markets like Poland and Russia, much of Europe remains in a recession.

But as growth returned to Germany and export markets outside Europe, lead times for equipment got too long. The Westland acquisition helps on that front, since now Reifenhäuser has a North American base where it can manufacture screws and barrels. The next step will be to improve service and aftermarket support, DeSpain said.

"If we're going to grow the business in North America … we have to improve our sales, service and aftermarket support," DeSpain said.

The company is making some concrete changes. Reifenhäuser now is stocking more spare parts in North America; it has developed a proprietary web-based tool that customers can use to find the right parts and order them online; and it hired Jim Snell as project manager, who will serve as a technical expert to Reifenhäuser customers.

The next step will be to move the North American operations — Reifenhauser Inc. — to Wichita, from Danvers, Mass. Reifenhäuser said it makes sense to base the regional operations where the company is making screws and barrels.

Workers in Danvers have been offered positions with the company, and in the meantime they have committed to staying on through the end of the year. The Danvers operation will close in September.

Wichita, meanwhile, will be adding equipment and personnel. The plant currently employs about 50, but it should be up to 60 within a year, said Dave Larson, president of Reiloy Westland. The plant also has $1 million in new equipment on order.

"The announcement of this acquisition, it's been so much more than I expected," Larson said. "We see growth in North America. We see a lot of opportunities coming back from Asia. We think that there's a lot of very positive things happening in North America with the plastics industry. I know there are still a lot of people saying negative things, but we're not seeing it," he said.

The company's flexible packaging seminars, which will be invitation-only events, will take place June 25 in Grapevine, Texas, near Dallas; June 26 in Atlanta; June 27 in Rosemont, Ill., near Chicago; and June 28 in Mississauga, Ontario, near Toronto. The seminars will include speakers from other suppliers, in addition to Reifenhäuser, highlighting machinery and material developments in flexible packaging.

K show preview

Despite all the talk about North America, Reifenhäuser did not ignore the K show completely. After all, he also serves as chairman of the VDMA Plastics and Rubber Machinery Association, the German trade group that serves a key role at the Düsseldorf, Germany, trade show.

Reifenhäuser Group will run seven machines at the show, which will take place Oct. 16-23. The lines will represent the company's whole range of extrusion technology, Reifenhäuser said.


Comments

Reifenhäuser readies for shale gas boost

By Don Loepp
Editor

Published: April 11, 2013 5:03 pm ET
Updated: April 12, 2013 2:06 pm ET

Post Your Comments


Back to story


More stories

Image

Haitian's standardization efforts paying off

August 29, 2014 9:53 am ET

Streamlined design efforts and robust export sales helped propel Ningbo, China-based injection molding machine manufacturer Haitian International...    More

Image

American Starlinger-Sahm begins work on new US headquarters

August 29, 2014 10:18 am ET

American Starlinger-Sahm Inc., which sells equipment for woven plastic bag production, PET recycling equipment, sheet extrusion and laminating lines...    More

Image

Sidel opens training center in Mexico

August 29, 2014 9:00 am ET

Swiss machinery company Sidel Group has opened a new training center in Guadalajara, Mexico, featuring a virtual factory environment, augmented...    More

Image

Obituary: Frank Nissel, Welex Inc. co-founder

August 28, 2014 1:01 pm ET

Friends, family and business acquaintances will remember Nissel as an urbane, outgoing machinery executive, an expert on extrusion, a globalist who...    More

Image

Haitian to start assembly of injection presses in India

August 25, 2014 2:59 pm ET

Chinese press maker Haitian International Holdings Ltd. plans to expand its operation in India.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events