China is a hot market for Welex Inc., which makes sheet extrusion lines in Blue Bell, Pa. ``We're selling like crazy in China,'' President Frank Nissel said. ``And I'm seriously, quite honestly, looking at putting a plant into China.''
Nissel called the U.S. market ``very spotty,'' adding: ``Here and there we sell something. We're keeping alive. Food packaging is doing well. That's where it's all going.''
Nissel said Welex has received requests for loads of quotes in the last three months. ``This is a good sign ... People are talking about plans, but orders are still slow coming.'' Big U.S. packaging companies seem to be fine-tuning their machines to get maximum production before ordering new sheet lines, he said.
At HPM in Mount Gilead, Ohio, ``packaging has been a solid market over the last two or three years,'' said Gerry Sposato, director of sales and marketing. Other growing areas include wood-flour profiles for construction and automotive products.
HPM is a division of Taylor's Industrial Services LLC.
Executives at two smaller extruder makers also are polishing their crystal balls. They like what they see. Harrel Inc.'s president, Holton Harris, said business is down. ``But there's light at the end of the tunnel'' at the maker of specialty extruders for medical tubing and other markets. The company in East Norwalk, Conn., keeps pushing new technologies, such as a fully automatic ``lights out'' system that extrudes tubing and handles product takeoff-and can shut itself down if something goes wrong.
``This has been done in injection, but nobody's been doing it in extrusion,'' Harris said.
Thomas Allen, president of Diamond America Corp., in Tallmadge, Ohio, said signs look good for the new year. ``All indications I have is, the projects we are quoting seem to be real and have time frames on them. And they're good-sized projects,'' he said.
Count the growth, layer by layer of film
Food packaging may indeed be recession resistant, but that does not mean that every packaging company is ready to shell out the hundreds of thousands of dollars for a new blown film or cast film line - at least not in the United States.
Business is ``unbelievable'' in China for Battenfeld Gloucester Engineering Co. Inc., according to Brian Marvelley, president and chief executive officer.
What about North America? Marvelley echoed several other film equipment executives who said business started to grow only in recent months. ``North America was, for the first eight months, pretty flat relative to last year,'' he said. ``And then towards the end of the summer months, there was a visible pickup. It's certainly not what you would call a rebound in the sense that we've reached astronomical levels, but it's certainly improving. It's taken the gradual improvement that everybody is expecting for the rest of the economy.''
Most blown film equipment for food packaging now centers on five- or seven-layer lines, he said, although Battenfeld Gloucester goes up to nine layers. Machines to the Far East typically have three layers.
For 2004, Marvelley is cautiously optimistic that will continue. ``We are not looking for the thing to take off like a racehorse,'' he said.
The old ``cautious optimism'' also applies to David Nunes, president of Hosokawa Alpine American in Natick, Mass. ``It's been really slow for the last two years, and I would say the outlook from NPE to now has been improving in a number of different markets. We're seeing much more quotation activity and certainly more prospects for an improving market,'' he said.
But then Nunes says how he hates that phrase, ``cautious optimism.'' What he'd really like to see is a break in the relentless pricing squeeze, which goes by another buzz-phrase: ``Taking cost out of the supply chain.''
Allow Nunes to sound off: ``There's nothing left to squeeze. We're at the bottom and now we have to get back to partnering with suppliers and not just getting every last penny that's left. Because there isn't anything that's left.''
Nunes agrees it has been a buyer's market, but warns: ``You can only sustain falling prices for machinery for so long.''
Nunes and other machinery executives who sell to U.S. customers is closely following the anti-dumping complaint filed against the flood of cheap imported bags from China, Malaysia and Thailand, by the Polyethylene Retail Carrier Bag Committee. ``This could have a significant impact on the machinery industry and the overall film market,'' he said.
Meanwhile, at Brampton Engineering Inc. sales increased by double-digits this year, said Bud Smith, president and chief executive officer. Customers are seeking quotes and should continue to place orders in 2004, he said.
``Factory utilization is getting higher and they've deferred capital expenditures. Now they're facing a shortfall to meet their customers' needs,'' Smith said.
The company in Brampton, Ontario, displayed a nine-layer film die during NPE. Smith said the food market continues to be strong as flexible containers, like pouches, win market share from rigid ones.
Paul Conley said Macchi North America also likes the zipper pouch. ``It's steady and it's consistent. There's always something that can be put into a plastic pouch or bag,'' he said.
Based in Burlington, Ontario, the North American operations of Italy-based Macchi srl opened in late 2000. This year at NPE 2003, the company ran a three-layer blown film line at NPE.
``Things seemed to have bottomed out. I'm seeing a lot more interest,'' Conley said, attributing some of that to Macchi's NPE exposure.
In Italy, Macchi is building five seven-layer lines, all for European customers.
Reifenhauser Inc. of Ipswich, Mass., said business this year ``has been surprisingly strong,'' according to John Wise, general sales manager. The company's blown film business has been ``just so-so,'' but sheet extrusion lines for food have sold well.
On the food film side, Wise said Reifenhauser is waiting to see if long-delayed projects come through next year. ``At this point, we're encouraged,'' he said.
Black Clawson Converting Machinery LLC changed ownership earlier this year, as Carl Landegger sold the maker of cast film and extrusion coating machinery to a management team led by Mark Panozzo. He business has picked up in the last three months, after a ``somewhat disappointing'' beginning of the year.
The company in Fulton, N.Y., has sold extrusion coating machines to make window coating and film for graphic arts.