CHICAGO — Although Plastics USA sometimes is described as a regional — or perhaps ``superregional'' — show, global economic forces were felt on the show floor in Chicago.
A number of exhibitors feel North America is the only economy strong enough to absorb big-ticket items such as injection molding machinery. Others note the depressed value of the Japanese yen compared with the dollar.
``It's certainly been a benefit for us,'' William Roebuck, vice president of marketing and sales for JSW Plastics Machinery Inc., said Oct. 6 at the show. JSW is the U.S. sales arm for the machinery division of Japan Steel Works Ltd. of Hiroshima, Japan.
``The higher yen puts us here in a better position,'' he said. ``When the yen was in the low 90s [per U.S. dollar], it was tough to sell machines here. The situation now makes us much more attractive.''
JSW, being part of a huge steel manufacturer, makes most of its components in-house in Japan, Roebuck said.
But at least one U.S. distributor of Japanese machines said currency fluctuations don't necessarily mean one side of the Pacific will benefit over the other.
``It hasn't had a major impact on us,'' said Tim Glassburn, vice president and general manager of Toshiba Machine Co. America. ``We don't make price changes based on short-term currency changes.''
Besides, in Toshiba's case, manufacturing is an international affair, Glassburn said. Some components travel from the United States to Japan to be assembled into the final product — before the whole unit can be shipped back across the ocean to North America.
That transcontinental manufacturing system closes some of the gaps in currency exchange rates, he said. But no matter what the exchange rate, when the only people buying are in North America, there will be a lot of manufacturers competing for business here.
``That's why everybody is rushing this market,'' said David B. May, national sales manager for MHI Injection Molding Machinery Inc.
Being from Japan doesn't automatically mean an easy ride in the U.S. market, even with the favorable exchange rates.
``We have to face very hard competition,'' said MHI Executive Vice President Minoru Shibata. ``Now it's a buyer's market.''
But the lower value of the yen has ``allowed us to be competitive with some of our competitors,'' May said.
Earlier this year, some U.S. injection molding machinery makers joined a lobbying effort to push for changes in International Monetary Fund lending practices, as well as proposing provisions to enforce World Trade Organization rules that protect industries against a flood of imports.
But Mitsubishi's Kei-ichi Toma dismissed those efforts.
``I didn't hear them complaining when the dollar was at 90 yen,'' Toma, an executive vice president with MHI, said. ``As far as I know, Cincinnati Milacron was making a lot of money.''
Noting that currency values go in cycles, Van Dorn Demag's Ken Vaughn said his company is going to ride out the current wave.
``We've seen [Japanese companies] become much more aggressive in North America,'' he said. ``The advantage of the exchange rate has helped them. It just forces us to be tougher.''
Meanwhile, Van Dorn's sales efforts in the rest of the world have suffered from frozen economies and plummeting currencies.
``It's really made it more difficult to compete in those markets,'' Vaughn said. ``We're going to concentrate in Canada, Mexico and the U.S.''
Vaughn, Van Dorn's marketing communications manager, said his company has to maintain pricing discipline in the face of competition for those markets.
``We've added features, but haven't raised our prices,'' he said. ``We're going to be a strong company and are going to beat them.''
Of course, global forces don't wait for anything — not even for Plastics USA.
During the course of the show, the yen gained considerably against the dollar. The U.S. Federal Reserve Bank of New York pegged the yen at 118.5 per dollar on Oct. 8, compared to 135.75 just the week before. At the beginning of August, it took about 145 yen to buy a dollar.