Let the good times roll. Manufacturers of injection molding machines are humming that tune as the new year begins. The biggest ``problem'' they face is how to make enough presses fast enough to fill orders booked through the first six months of 1995.
Business was strong in 1994, with many companies reporting record sales. Large machines sold especially well. Many industry officials think 1995 can equal, or even beat, 1994. Machinery suppliers should continue adding on to their U.S. plants and hiring workers this year, trying to pump more machines out to meet demand for quicker delivery.
``If you have a customer, you have to deliver, and if he has to go somewhere else, he will,'' said Kurt Fenske, vice president of sales for Engel Machinery Inc. of York, Pa.
Machinery executives will remember 1994 for some time.
``A banner year. It's the kind of year you only get once every nine or 10 years,'' said William Ball, a 30-year industry veteran who is general manager of plastics machinery at Daiichi Jitsugyo (America) Inc., a trading company that sells presses made by Niigata Engineering Co. Ltd. of Japan. ``We certainly haven't had it this good since the early '80s.''
Larry Bauer, executive vice president of Arburg Inc., called 1994 ``the best year for our business since right after the oil embargo.''
The current capital spending cycle is the strongest in the post-World War II era, said Alexander Paris Sr., an analyst who covers industrial machinery.
``It has been, and will continue to be, strongly focused on machinery and equipment,'' said Paris, president of Barrington Research Associates Inc. of Barrington, Ill.
The U.S. Department of Commerce said manufacturers planned to boost spending on plants and equipment by 7.3 per-cent in 1994, up from 3.1 percent in 1993. And spending on industrial equipment gathered steam throughout 1994: Purchases, measured at an annual rate, increased through each of the first three quarters of 1994, the department's Bureau of Economic Analysis reported in December.
Beefing up with new, more-efficient machinery means that U.S. factories have hired fewer new workers than in past recoveries. That's not the case at companies that make the machines, of course.
Van Dorn Demag Corp., for example, added 100 jobs at its Strongsville, Ohio, headquarters in 1994, which now employs 750. But the company no longer could count on just ``help wanted'' advertisements. Van Dorn Demag held Saturday job fairs, increased its internship programs with area colleges and even contacted local companies that were downsizing, searching for qualified employees.
``We'll probably hire another 50 people'' in 1995, said William G. Pryor, president and chief executive officer.
Van Dorn Demag plans to boost capacity for toggle machines by 75 percent and for its hydraulic machines by 50 percent this year, he said. Planned expansions include 40,000 square feet in Strongsville to make toggle machines, to be finished in April. The company also has centralized its spare parts and service area in a new, leased facility near Cleveland Hopkins Airport.
Van Dorn Demag is hardly alone. Expansions and new hiring have happened across-the-board at companies that manufacture machines in the United States and Canada, and at several machine importers as well: Engel, HPM Corp., Husky Injection Molding Systems Ltd., Cincinnati Milacron Inc., Newbury Industries Inc. and Netstal Machinery Inc.
Milacron invested about $2 million in computer-aided-design equipment in 1994. But the reallybig investment came five years ago when Milacron spent $36 million to double production capacity at its machining plant in Mount Orab, Ohio. It's paying off.
``The expansion that we made in the 1990-1991 time frame, when things were slow, has played a tremendous role in our ability to capitalize on what we agree is a very strong period right now,'' said Bruce F. Kozak, vice president of Milacron's plastics injection machinery business.
U.S. suppliers have become low-cost producers, according to Pryor. That bodes well for exports in 1995, as economies in Europe and Japan recover, and hot growth continues in China and the Pacific Rim. He said some of Van Dorn Demag's additional capacity is needed to make toggle machines for global export, through its German parent, Mannesmann Demag AG.
Pressured by the yen/dollar relationship that makes their machines more expensive relative to U.S.-made ones, Japanese press makers also are discovering the joys of U.S. manufacturing. JSW Plastics Machinery Inc. and Toshiba Machine Co. America already do partial U.S. assembly. Mitsubishi Heavy Industries Ltd. plans this year to begin assembly of 10-20 machines a month in Hopkinsville, Ky.
Currency markets could force additional Japanese companies to follow suit. The dollar fell below 100 yen in July. In that same month two years ago, the dollar stood at 125.88 yen.
So exactly how good was 1994? Hard numbers are scarce. The Society of the Plastics Industry Inc. of Washington has not released its full-year report yet, and most suppliers do not release exact unit or dollar numbers. In a report issued before NPE '94, held in June, Michael R. Paslawskyj, a vice president for the industrial financing arm of CIT Group, had predicted 1994 growth of 4.5 percent. Contacted in December, he bumped that figure up to about 8-9 percent, or 6-7 percent if adjusted for inflation. Paslawskyj's numbers cover U.S. sales of all types of plastics machines, not just injection presses. CIT Group is in Livingston, N.J.
But machinery company officials reported much higher numbers - as much as 40 or 50 percent. Milacron's Plastics Machinery Group, based in Batavia, Ohio, was expecting 1994 sales to top $500 million, more than a 40 percent increase from $357 million in 1993. Kozak thinks 1995 ``will probably be about a carbon copy of '94'' in terms of dollar-volume of sales. Unit volume may rise, though, because of an anticipated increase in sales of small and mid-sized injection presses.
Milacron claims to have picked up U.S. market share by maintaining normal delivery schedules while other domestic suppliers take longer. Kozak said Milacron can deliver smaller-tonnage machines in two to four weeks, and 12-16 weeks for larger machines. That helped the company win an Industry Week award as having one of ``America's Best Plants'' in 1994.
Paris said Milacron stands to benefit from a rebounding European economy, thanks to its purchase in late 1993 of the Kl”ckner Ferromatik injection press business and factory in Malterdingen, Germany.
Engel's two North American factories ran at full capacity in 1994 - 550 injection presses, according to Fenske. Engel is adding capacity this year. The company is completing a 48,000-square-foot addition to its Engel Machinery Inc. plant in York to boost production space by 60 percent. In Guelph, Ontario, Engel Canada Inc. last year added 65,000 square feet of space and bought a 30,000-square-foot building next door to produce insert molding machines and robots. Strong sales of large-tonnage machines prompted the Engel expansions.
Machine builders say automo-tive, appliance and construction molders are stoking sales of large-tonnage machines. Several suppliers said they think machines of 1,200 tons or larger could surpass the 71 units in U.S. shipments SPI reported in 1993 - a figure that itself was a 58 percent gain over 1992.
At Husky, Mike Urquhart, vice president of sales and marketing, predicts continued growth in large-tonnage machines because of the strong auto market. Automotive and thin-wall packaging were Husky's two fastest-growing markets in its fiscal year ended July 31, helping the Bolton, Ontario, company post a 29 percent sales gain, in machine shipments. For the first quarter of fiscal 1995, ended Oct. 31, Husky said its sales doubled. The company does not release dollar amounts.
Husky in the past year has opened two new facilities, totaling 169,000 square feet. By March 1995, it will complete work on an additional 151,000 square feet of expansions.
HPM also reports strong sales of big machines. The Mount Gilead, Ohio, company has orders for large-tonnage machines through August, according to Brian Bishop, general manager of injection molding. HPM's fiscal year runs through June.
``We're looking at '95 to be an increase from '94. We don't see things slowing down at all,'' Bishop said.
HPM has hired about 100 people since June. The company also plans a plant expansion for smaller toggle machines, to open in May, but Bishop said details have not been released.
Given the demand for machines, longer lead times and cost increases for steel and other raw materials that go into them, machine builders say prices are stabilizing, although deals still are available.
Battenfeld of America Inc. also experienced record sales during its fiscal year, which ended June 30, President Wolfgang Meyer said. The West Warwick, R.I., unit of the German machinery company Battenfeld GmbH posted a 45 percent sales gain.
Meyer is projecting growth through June. Hot markets include automotive and materials-handling containers, a market he said has ``tremendous growth potential.''
Sam Amin, president of Newbury Industries Inc., is predicting a slight sales increase in 1995. The Newbury, Ohio, firm has boosted employment by 20 percent, to 130 people.
``We have everybody working at least 12, 13 hours overtime. We're busy,'' Amin said.
Arburg, based in Newington, Conn., plans to become active in Latin America this year. Bauer said Arburg is projecting a ``substantial increase in our business'' mainly because the company has expanded its line with larger machines, up to 220 tons.
Bauer is concerned that interest-rate hikes by the Federal Reserve Board - and signals that more might be coming - could temper the optimism. But so far that has not happened, according to Bauer and officials at other machinery suppliers.
CIT's Paslawskyj said: ``The economy has withstood very nicely the interest rate hikes. It can take up to six to nine months for interest rates to work their way through the economy.''
Forecasting is not a problem at many injection press suppliers - at least through the first half of 1995.
``We're going into the coming year with the biggest backlog we've ever had,'' Netstal President Barry Potter said in December. ``The biggest portion of that is in [compact disc machines]. We have, right now, about 30 CD machines in backlog.''
Netstal also has seen a resur-gence in machines shipped to medical molders.
Potter said that in the spring Netstal will begin construction of a headquarters building near its existing facility in Fitchburg, Mass., that will be devoted entirely to the company's CD packaging molder, Optima Precision Inc.
Krauss-Maffei Corp. of Florence, Ky., was on pace to sell 82 injection molding machines in 1994, Michael Santa, executive president of the firm's injection molding division, said in December. In a typical year, Krauss-Maffei's U.S. unit sells 55-65 presses.
The gain came from increased sales to custom molders-a market Krauss-Maffei is targeting under a new strategy.
Toshiba sold 25 percent more machines, in units, from its U.S. operation in 1994 than in 1993, according to Tim Glassburn, vice president of the Plastics Machinery Division. Toshiba recently opened service offices in Lansing, Mich., to serve automotive molders, and Norcross, Ga., to serve the southeastern United States, where demand is up for machines to mold components for televisions, appliances and electrical/electronics. Toshiba America is based in Elk Grove Village, Ill.
Toshiba hopes to bring its PVC pipe fitting molding technology to North America this year, said Mitsuaki Eshima, vice president and general manager.
Sales increased about 10-15 percent in 1994 for JSW Plastics Machinery Inc. of Santa Fe Springs, Calif. But JSW's parent, Japan Steel Works Ltd., is hoping business improves at home.
``We had a good year, but this increase is not compensated for by the Japanese market,'' said JSW President Nobuyuki Hirato.
Mitsubishi is projecting that 1995 sales will be about the same as 1994, according to an official at MC Machinery Systems Inc., a Wood Dale, Ill.-based unit of Mitsubishi.
Sandretto Plastics Machinery Co. of Cedarville, N.J., said it has picked up new customers by having machines available.
``Customers are very important these days. They want their machines yesterday,'' a company spokeswoman said. Sandretto in 1995 will open two additional distribution centers for its Italian-made machines, in the Chicago area and in southern California.
The booming automotive market helped newcomer Hemscheidt Machine Corp. of Wixom, Mich., the U.S. unit of German supplier Hemscheidt Maschinentechnik Schwerin GmbH & Co. Mike Mead, executive vice president and general manager, said the company sold 10 machines during its first year of U.S. sales-all to automotive molders.
