Tooling analyst sees growth in Asia, opportunities in Midwest

By Kerri Jansen
Staff Reporter

Published: August 5, 2014 11:34 am ET
Updated: August 5, 2014 11:36 am ET

Image By: Plastics News file photo Laurie Harbour

Related to this story

Topics Automotive, Molds/Tooling, United States, China, Canada, Asia, Injection molds

TRAVERSE CITY, MICH. — Asia’s mold industry continues to grow despite some reshoring, suggesting a shift in the types of tools sourced from the region.

The global mold making industry grew 22 percent globally from 2011 to 2013, with the majority of that growth coming from Asia, analyst Laurie Harbour said at the Center for Automotive Research’s Management Briefing Seminars in Traverse City. Asia alone showed a 33 percent increase.

“What we’re still seeing is that we’re still buying tools in Asia in a high degree, particularly on the mold side, as opposed to stamping dies,” she told Plastics News. “And this data proved it — that from 2011 to 2013 revenue was up 33 percent in the mold side of the business [in Asia].”

That number is based on molds leaving Asia, not necessarily all of which ended up in North America.

Harbour has previously discussed how rising costs and lead time constraints can drive reshoring of tools from Asia. The question, then, is why that’s not represented in the data.

“If it’s something that’s really tight and needs to be made quickly, it’s not going to go to China. There’s no time. The more cost increases in China, not just labor rates but costs in general — transportation, energy — it won’t make the math work on large, large tools,” she said.

But for simple tools where engineering changes and lead time constraints aren’t an issue, the low initial pricing available in Asia make sourcing tools from the region an attractive option. That is likely what’s driving Asia’s growth, Harbour said.

“I think the mix is shifting,” she said. So even though some reshoring happens as costs in other regions rise, “the data doesn’t show it. The data just shows continual growth.”

Harbour predicts the mold making industry will grow another 12 percent in 2014. As released in Harbour Results Inc.’s October 2013 tooling capacity study, Harbour believes the tooling industry faces a pending tooling capacity gap, and new data collected by her firm confirms that, she said.

The global mold making industry operated at 94 percent of utilization according to her data, Harbour said. After seeing a dip in early 2014, business is now picking up again in preparation for 2016 automotive releases.

North America had the lowest percent utilization, operating at 85 percent capacity, compared to Asia at 97 percent capacity and Europe at 114 percent capacity.

“There’s more availability here,” Harbour said.

Harbour Results announced on Aug. 4 it was working with the Michigan Economic Development Corp., in collaboration with the Original Equipment Suppliers Association, to support Michigan’s tooling industry ahead of the capacity constraint.

HRI is working with the state on developing programs to provide benchmarking, assess businesses and develop best practices, Harbour said. A key goal is to attract more people — especially young people — to the industry.

“Somebody will take the work if we have a capacity gap,” Harbour said. And Michigan’s dense tooling industry — 867 tool and die shops in the state — means it has a unique opportunity to absorb that increasing demand.

“Michigan has the highest skill level to be able to support that activity,” she said. “If the state can support them as those costs in China and other regions go up, and reshoring does occur, we have to have the people here to actually staff these shops and be able to take on the work.”


Comments

Tooling analyst sees growth in Asia, opportunities in Midwest

By Kerri Jansen
Staff Reporter

Published: August 5, 2014 11:34 am ET
Updated: August 5, 2014 11:36 am ET

Post Your Comments


Back to story


More stories

Image

P&G removing PE microbeads from its Crest brand toothpaste

September 18, 2014 1:57 pm ET

After months of prodding, Procter & Gamble Co., the makers of Crest brand toothpastes, say polyethlene microbeads will be completely removed from its ...    More

Image

Smartphone work adds 52 percent to sales for China's Eva Precision

September 18, 2014 4:37 pm ET

Growth in supplying the smartphone and automotive industries helped Chinese processor Eva Precision Holdings Ltd. push injection molding sales up 52...    More

Image

Bill Kent named Thermoformer of the Year

September 18, 2014 12:11 pm ET

Bill Kent flew 6 million miles in a 50-year career at Brown Machine LLC — where he began assembling thermoforming machinery on the factory...    More

Image

Nolato Contour beefs up white room molding capabilities

September 18, 2014 11:56 am ET

Nolato Medical has extended its controlled environment options to include a white room at its Baldwin, Wis., Nolato Contour plant.    More

Image

Plastics News Now: Local Motors 3-D prints a car

September 18, 2014 6:00 am ET

A time lapse of the car being printed, we visit a rigid package manufacturer who is expanding and the strong M&A market might continue according to on...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

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

Upcoming Plastics News Events

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

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

More Events