From ``slow and spotty'' to ``lively,'' the state of extruder machinery is as diverse as the sector's end markets - but most executives expect their companies to ride an improved U.S. market into 2004.
Packaging, a mainstay during the difficult manufacturing recession, held up all year and got stronger late in the year, officials said.
Other markets were weaker, but business seemed to pick up in the second half, officials said.
In construction - a key market for extruders to make siding, windows and pipe - the bad news is the red-hot market for new-home construction should finally slow down. The good news? Economists think the $234 billion remodeling market will enjoy solid growth in 2004.
Plastics News reported on several expansions this year, including a project to double capacity at Westech Fence and a new plant for Dayton Technologies LLC to make wood-plastic composite decking and railing sold by Alcoa Home Exteriors.
The Federal Reserve Board delivered the best news of all for construction, when it pledged to keep interest rates low even as the economy recovers. Low rates also should help machine sales.
Vinyl siding, windows, decking and fencing are still solid.
``Siding has had some of the best months for a long time,'' said Josef Marek, president of American Maplan in McPherson, Kan. Maplan is running the highest level of quotations in several years. ``So if the hit rate is normal, it should be a good year,'' he said.
Marek said some extrusion companies that serve hot construction markets are busy. ``What I'm seeing now is the utilization of the plants is pretty high: They are about 80 percent, and some are even at 100 percent. So I'm optimistic for 2004,'' he said.
At Krauss-Maffei Corp., Hans-Jurgen Matthesius, vice president for the extrusion division, said vinyl windows continue to grow, taking market share from wood and aluminum.
``Expansion is still going on, which is good for us,'' he said. ``Siding was surprisingly strong for us this year. I didn't expect that. I thought siding would be a commodity market, but it became pretty strong.''
But the U.S. pipe market is not ordering machines. Matthesius said that tight budgets at state and local governments don't allow for spending on needed infrastructure like water and sewer pipes, which would give the industry a boost.
Overall, he said: ``I have seen better years, but in general, the activities are increasing. We have done pretty well considering the economic conditions,'' he said from the company in Florence, Ky.
The strong remodeling business has helped Milacron Inc. in extrusion, according to Glenn Anderson, director of sales for the Cincinnati machinery maker. Milacron sees interest from processors making window profiles, siding and pipe.
``There are more projects looming. Certainly the activity is there, and our customers are healthier than they have been,'' Anderson said. ``The wood composite business continues to do well for us.''
Jerry Berlyn, owner of Berlyn Extruders Inc. said his ``gut feeling'' is 2003 marked the bottom of the U.S. machinery business. Last year, customers were waiting for the other shoe to drop - another act of terrorism on U.S. soil. ``This year they have confidence that the world is not going to come to an end, and they're getting on with their lives. They're beginning to put some projects in the pipe,'' he said.
``Our year 2003 has been very soft. But I see the sleeping giant is wiggling its big toe,'' Berlyn said from the company in Worcester, Mass.
Sales rose by 20 percent at Merritt Davis Corp., according to Sandy Guthrie, president and chief executive officer of the Hamden, Conn., extruder maker. A year ago, the market did not have a lot of direction. ``Demand is coming back at a reasonable level. We'll be able to plan again,'' he said with a chuckle.
Late in the year, Guthrie said his business is approaching a level not seen in four years, part of it from year-end spending.
``Though margins were a little bit slimmer, there was growth nonetheless,'' he said. ``We are seeing the market right now very lively, with people buying machines and wanting short delivery.''
Processing Technologies Inc. got a big order for an undisclosed number of six-layer sheet lines for Visteon Corp.'s thermoformed gas tanks, a groundbreaking automotive achievement. President Dana Hanson said PTI also is selling sheet lines for PET and polypropylene packaging. In wood flour, PTI has developed equipment to make sheet, a new market for that material.
PTI of Aurora, Ill., does not release sales, but Hanson said sales increased this year by 15 percent over 2002, which was a record year. The company currently employs 60 people, and Hanson said he plans to hire 10-20 employees next year.
``We've been fortunate, because of our diversity and our markets have been solid,'' he said. ``Our backlog is solid going forward. Our pipeline for quotations is bigger than it's ever been. From our perspective, the market conditions look like they're stable and good.''
An agreement announced at NPE 2003 between PTI and Bruckner Formtec GmbH, a German company that makes machinery for thin-gauge packaging film, has opened new global markets for PTI, Hanson said. Through Bruckner, PTI got an order from Russia for a PET packaging sheet line, and an order from China for lenticular sheet used in billboards.
American Kuhne Inc. also has boosted employment. A year ago, the company in Norwich, Conn., was predicting a modest sales gain in 2003. Instead, said David Citron: ``We had an explosion of orders starting on Jan. 2 of this year.''
The hot markets were extruders for medical products and multilayer tubing for automotive and industrial applications. ``All the projects we had been working on for two years, really came through in the first half of this year,'' said Citron, director of sales and marketing.
American Kuhne also sees strong demand for complete systems.
Davis-Standard Corp., part of publicly traded Crompton Corp., has reported an operating loss in 2001 and 2002. Through the first nine months of 2003, sales of $120 million are down 8 percent from the same period in 2002 - but Davis-Standard is in the black, turning a profit of $1.7 million. Last year through the first nine months, the company had lost $9 million.
Interviewed Nov. 7, Davis-Standard President Robert Ackley attributed the black ink to cost cuts and a move toward higher-growth areas such as packaging. ``The economy still hasn't done much for us,'' he said from Davis-Standard headquarters in Pawcatuck Conn.
``Packaging is still in high demand, food packaging and every other kind,'' he said. ``But at the same time, some of the other markets are softer.'' Davis-Standard also rolled out its Super Blue line of lower-cost single-screw extruders, using a standardized, modular design.
Overall, Ackley is optimistic that the nasty machinery downturn should be over in 2004. ``We may have another slump here and there, but I do think by the middle of next year, we should be on more solid footing,'' he said.