While sales of packaging-type blow molding machines are holding their own, suppliers of large accumulator-head units are reeling, hoping for some relief in 2003.
Depending on whom you talk to, the wait could be a long one. Meanwhile, one major player, the Kautex business of SIG Plastics International GmbH, is on the selling block as SIG concentrates on its core packaging equipment business.
``The glory days for industrial blow molding were in the mid-90s,'' said Frank Kennedy, sales director for Davis-Standard Corp.'s accumulator-head machines. ``We had a huge pipeline that we filled as people ramped up, but I think the market's going to stabilize at a smaller number.''
Accumulator-head machines make large parts, from trash cans to gas tanks to the walls of a backyard shed.
Kennedy said the U.S. market for accumulator-head machines started to head south in 2000 - the year Canadian housewares molder Euro United Corp. went bankrupt, dumping 15 nearly new presses on the market.
Richard Morgan of Uniloy-Milacron said the North American demand peaked at 150 machines a year during the mid-1990s. That fell to 100-120 in the late 1990s. ``In the past two years it's been running at about 80-90 a year,'' said Morgan, Uniloy-Milacron's manager of business development for industrial blow molding machines.
Wolfgang Meyer, president of the SIG Kautex business unit, said customers are not expanding capacity, given the slow U.S. economy.
``There is not a significant need to expand,'' Meyer said. ``Companies are extremely reluctant to throw out older machines and replace them with newer equipment. This is not happening.''
SIG officials said in October the company will close its operation that assembles accumulator-head presses in North Branch, N.J. According to Meyer, Kautex has a North American market share of 30 percent for accumulator-head machines and larger extrusion blow molding machines. That market plunged to $26.5 million in 2001, from $60 million in 2000.
There are some bright spots. Meyer said SIG Kautex has recorded a couple of multiple-machine orders, but he thinks that may be a one-time blip - and that sales might not improve in 2003.
Kennedy and Morgan are more optimistic.
``Our custom molders are actually looking at equipment,'' said Kennedy of Davis-Standard, based in Pawcatuck, Conn. ``I think they're seeing an upturn in the last couple of months.''
Some markets are fairly healthy, such as outdoor products like deck boxes and sheds. But work is moving to Asia, even for large blow molded parts, he said.
Morgan said business has picked up in the fourth quarter, after the first three quarters of 2002, which he described as ``abysmal.''
The fourth quarter is nearly sold out for Uniloy-Milacron's accumulator-head business, based in Batavia, Ohio. ``It surprisingly has picked up in a short period of time,'' Morgan said.
Business is strong in custom and household products. Machines sold to automotive molding have picked up as the year ends. Even so, Morgan is cautious. ``It's too early to tell if it's a true pickup in business. It may or may not hold,'' he said.
The other side of SIG - packaging machines - is doing better. That includes Corpoplast two-step PET machines and Blomax machines for one-step PET bottles and extruded blow molded polyethylene containers.
``This year, for us it's the best year since 1994,'' said Peter Andrich, vice president of sales for Blowtec and Corpoplast. He said SIG is gaining market share, with new high-output machines and a move to strengthen parts and service in North America.
Thomas Jordan said business is picking up for Krones Inc.'s PET machines. Water bottlers are investing in new technology, he said, while the U.S. soft drink market continues to grow at 2-4 percent a year.
Franklin, Wis.-based Krones established itself in the blow molding machine market in 2001, and it received orders as business picked up in 2002, said Jordan, plastics division vice president.
Two big news stories hit blow molding this fall. To cut costs, Milacron Inc. announced Nov. 8 that it will move assembly of Uniloy blow molding machines for packaging, along with structural foam presses, from Manchester, Mich., to Milacron's central factory in Batavia.
Also, an Oct. 25 European court ruling opened the door to Tetra Laval International SA's purchase of Groupe Sidel, a Le Havre, France, maker of PET blow molding machines, and filling and packaging systems. The decision overturned the European Commission's decision to block the $1.6 billion deal.
Officials could not be reached at Sidel Inc., the company's U.S. unit in Norcross, Ga. But Groupe Sidel is rebounding this year, after a difficult 2001, according to financial reports.
Through the first nine months of 2002, Groupe Sidel reported its North American sales increased 4.6 percent, to $206 million. North American sales had fallen 14 percent through all of 2001. Worldwide, Sidel's blow molding and coating segment increased sales 6.3 percent through the first nine months, ended Sept. 30.
On the dairy side, companies that make machines for blow molding milk jugs still are sorting through the big consolidation among U.S. dairies.
Joe Carr, president of APS Plastic Systems LLC of Tecumseh, Mich., thinks the new, larger dairies still are sorting out their blow molding operations, which has hurt sales of new machines. But Carr said the dairies are having existing machines rebuilt, which has paid off for APS.
``There remains a good remanufacturing business, because a lot of these plants have not had capital expenditures for many years,'' Carr said.
Carr said APS enjoyed 30 percent sales growth this year, and expects that to continue in 2003.
Martin Stark, president of Bekum America Corp., said business was slow through the first half of 2002. ``Now in the last six weeks I've seen tremendous activities, and really some bookings,'' he said in early November. ``We're going into 2003 very comfortably.''
Packaging is somewhat recession-resistant, even though customers are cautious about buying machines, blow molding executives said.
``The downturn in the packaging industry was not as severe as in the industrial extrusion blow molding machinery industry,'' Stark said.
Bekum, which employs about 100 at its headquarters in Williamston, Mich., is working overtime, Stark said.
Wilmington Machinery Inc. is targeting multilayer coextrusion machines for food packaging, with a barrier layer. Jeff Newman, vice president of sales and marketing for the company in Wilmington, N.C., said packaging has held up during the recession. But going into 2003, he does not see a lot of new packaging projects, which drives new machinery purchases.
R&B Plastics Machinery LLC, known for its rotary machines to make bottles, has launched a line of continuous-extrusion blow molding machines to make larger products. ``We're building the first machine as we speak,'' said James Sheely, vice president of business development for R&B in Saline, Mich.
Sheely said R&B also is building some multilayer polypropylene machines to make food packaging.
Through the first three quarters of 2002, U.S. shipments of blow molding machines totaled 63, for a total value of $54.9 million, according to the Washington-based Society of the Plastics Industry Inc.