As it stirs back to life, the beaten-down U.S. injection press market should grow around 8-10 percent this year, machinery executives said, and they hope for modest and steady growth going forward.
A few storm clouds loom. If resin prices increase or stay high well into 2005, that could hurt the ability of molders to buy machines. Equipment executives hope resin will mellow out. Any major automotive slowdown could stifle the surging investment in big-ticket, large-tonnage presses. Machinery makers hope you buy a car or truck this year.
Hope. Some stability. That's the prevailing wisdom as 2004 winds down - a year of modest recovery after the devastation wrought by the three-year-plus downturn that sliced the U.S. market down to half its former size.
``The best that we can expect is a slow, steady growth,'' said Jerry Boggs, executive vice president of Sumitomo Plastics Machinery America LLC in Norcross, Ga. Right now, Boggs said, ``I wish it was steady. It's this up-and-down that's driving us nuts.''
At least there is an up. In the late-1990s, the U.S. market for injection presses was more than 5,000 units annually, sometimes topping 6,000. The bottom fell out in late 2000.
In 2001 and 2002, shipments were about 3,500 and it seemed like that was the floor. Then 2003 came along, and press shipments fell 7 percent, to 3,290 units.
Machinery executives interviewed for this story expect that by the end of 2004, the U.S. market will end up anywhere from 3,600-3,900. Assuming the growth continues, 4,000 could be the new norm down the road.
Friedrich Kanz, president of Arburg Inc., said the market is growing ``very, very slowly.'' He notes a new commitment by U.S. molders to compete in a rugged global market as 2005 nears.
``The market itself will be at least on the level of 2004,'' Kanz said. ``It should improve a little bit, again, continuing slow and steady growth. However, I look optimistically for the rest of the year and into 2005. With the way the American molding market has changed, there are really more technical machines, more loaded machines. Special applications, automated systems are needed. So compared to 2000, the market has changed dramatically.''
But the days of 6,000-press years are long gone. ``The days of customers just calling the sales rep and saying, `Hey, I need another 100- or another 500-tonner' are over, really,'' Kanz said.
``In North America, most of the machines are too old,'' said Walter Jungwirth, president of Engel Machinery Inc. in Guelph, Ontario. ``Sooner or later we have to replace, because otherwise we are behind.''
Jungwirth sees continued good business for large-ton presses.
``We project between 3,800 and 4,000 machines [for all of 2004], so a growth year from last year,'' Jungwirth said. ``It's mainly by the automotive industry, but also by the packaging industry. Automotive is still strong. We saw some good investments in the last couple of months.''
Engel plans to deliver a giant Combimelt multishot machine, with 4,000 tons of clamping force, to an unidentified customer in December.
Kanz said Newington, Conn.-based Arburg is selling machines with multishot capability, ``and basically all of them are new projects.'' He also reports good demand for presses for insert molding and liquid silicone rubber.
Husky Injection Molding Systems Ltd. has generated three straight years of increasing orders - a sign, officials said, that Husky's move to become a broad-line supplier is bearing fruit.
Orders were up 14 percent for fiscal 2004, which ended July 31. Mike Diletti, vice president of sales and service for the Americas, said Husky enjoyed strong third and fourth quarters, giving the Bolton, Ontario, company a solid backlog.
``So if you take the combination of a very good [first quarter] so far, we feel our sales will be very strong,'' he said.
Word is getting out that Husky has diversified beyond PET and packaging, to include automotive, general-purpose molding and other markets. ``We've had more new machinery customers in 2004 than in any prior year,'' Diletti said.
Battenfeld of America Inc. also has won brand-new customers this year, according to President Mike Santa.
``Our market share has been on a par with what it's been over the last 8-10 years, but what's interesting about that is we've seen a slowdown with some of our major customers,'' he said.
Medical and large-tonnage machines have sold well, as have complete molding cells with full automation for Battenfeld, which moved to South Elgin, Ill., from West Warwick, R.I., this year.
Capacity utilization is on a long, slow climb at U.S. plastics and rubber factories. It moved up from 80 percent a year ago to about 83 percent now - inching closer to the 85 percent rate that machinery officials say could spur significant orders.
But Santa said his company ``hasn't seen a lot in the way of new capacity. It's primarily updating technology, replacing older technology with equipment that's going to improve yield and productivity.''
Paul Caprio of Krauss-Maffei Corp. said molders are buying presses for new projects. ``Our strongest markets are automotive and packaging. Those are the big ones. Medical always plays a role too.''
Caprio, executive vice president of K-M in Florence, Ky., is hoping the U.S. market can grow by 5-10 percent for several years in a row. ``We see it as positive. What's more important is the people that are buying equipment are not just buying what they bought last time. They're looking for new technology. They realize they have to be different, and they're looking for what's right.''
Cincinnati-based Milacron Inc. struggled through some uncertainty early in the year, before bringing in new investors to refinance a large debt in March. At a K 2004 news conference Oct. 22 in Dusseldorf, Germany, top executive Ronald Brown said Milacron is on solid financial footing.
``We have no major debt maturities until the year 2011,'' he said, adding: ``I don't feel there's anyone in this entire industry that has a stronger balance sheet.''
At K, Milacron's German unit, Ferromatik Milacron Maschinenbau GmbH, laid to rest any doubts about the company's continuing investment in new technology by showing an injection press with an exotic double turning-stack mold using two rotating cubes. A second injection unit was mounted on the moving platen. The mesmerizing press did in-mold labeling and in-mold assembly, and placed the completed product on a conveyor.
``This is really a world innovation that has never been seen before,'' said Michael Koch, managing director of Ferromatik Milacron in Malterdingen, Germany.
Karlheinz Bourdon, the firm's vice president of plastics machinery technologies, said the U.S. market ``is slowly growing, with an accelerating pace.'' He said Milacron's large-machinery business has grown about 20 percent in the United States, from a year ago.
Bill Carteaux, co-executive managing director of Demag Plastics Group in Strongsville, Ohio, said U.S. sales ``are still a very slow climb. The growth in booking dollars has been up double-digits this year, but we don't look for that to continue next year. We're looking for more modest growth in 2005.''
Carteaux said most of DPG's U.S. sales are for new capacity. He cited pent-up demand in automotive, appliances and housewares, and continued strength in packaging and medical.
Machinery companies are touting work cells and automation as a way to keep molding work from leaving low-wage countries. ``We can provide a system that makes products at a lower cost than making them in China,'' said Rick Shaffer, president and general manager of Netstal Machinery Inc. in Devens, Mass.
At K, Netstal's big news was the Elion, its first all-electric press for standard injection molding. Shaffer said the Elion will give Netstal a chance to play in the U.S. all-electric market.
All-electric machines continue to make news. ``We're seeing a fair amount of replacement on older hydraulic machines and the move to electric,'' said Boggs, of Sumitomo. He too cites automotive and medical, plus something new: a revival of presses sold to the electronic connector business.
Here are comments from other injection press suppliers:
* ``We see a lot of projects on our plate and I would say a good number of them will come true. So we're pretty optimistic,'' said Harry Wowchuck, general manager of injection molding at the HPM Division of Taylor's Industrial Services LLC in Mount Gilead, Ohio.
* Tomohiko Naito, president and chief executive officer of Nissei America Inc. in Anaheim, California, said Nissei expects to sell 400 presses in 2004 and again next year. In 2003, the company sold 330 units. ``Electrical machines are increasing compared to last year,'' he said. Naito said prices are increasing for used machines, which bodes well for the new-press business.
* Bob Columbus, marketing head at JSW Plastics Machinery Inc. in Elk Grove Village, Ill., said the market is running a month up, then down. ``But if you average it all together, it definitely seems like it's on the upswing,'' he said. The downsizing among molders is slowing. Inventories have been reduced. ``They're ready to start investing,'' Columbus said.
* Toshiba Machine Co. America, also in Elk Grove Village, has sold its EC all-electric to medical molders and for small precision work on single-cavity molds, said Michael Werner, technical sales manager. Larger hydraulic-clamp Toshibas are going to auto molders. ``The people that are quoting are serious buyers,'' he said.
* The U.S. market will increase by 5-10 percent this year, predicts Liam Burns, general manager of Negri Bossi USA Inc. in Newark, Del. ``If it was more than 10 percent, we'd be very lucky. Things were picking up, but the oil price is going through the roof, the dollar's weakened and I think that's causing people to say, `Oh hang on, let's just wait to see what happens,' '' Burns said. If resin prices drop to a reasonable level, that will help spur investment, he noted. ``But if oil stays where it is, I think this will hurt machinery sales.''
* ``Actually we've been kind of slow,'' said Patrick Miura, vice president and general manager of Kawaguchi Inc. in Wheeling, Ill. But officials have been attending auctions to meet people who buy used Kawaguchi presses, some of the estimated 1,200 the firm has sold to U.S. plants.
* President Robert Koch said Exton, Pa.-based Boy Machines Inc. has seen a solid increase in aftermarket sales. ``It means that more machines are being put into production and require spare parts,'' he said. He expects Boy's sales to remain steady next year.
* Richard Morgan, injection molding business manager at Wilmington Machinery, said the low-pressure structural foam machine business remains soft. The Wilmington, N.C., firm is developing equipment for specific applications. Promising areas include storm-water chambers, pallets, materials handling and foaming plastic with wood fibers.
* Chinese press maker Haitian Machinery Co. Ltd. opened its first U.S. plant in August, in Itasca, Ill. Kingsley Qi Qin, president of the North American division, said customers are ``more positive for investment than a year ago.''
* Chen Hsong Machinery (Canada) Co. Ltd. in Keswick, Ontario, is quoting on large-tonnage machines and other general-purpose presses. ``If the trend keeps going in the next month or two, I suspect that 2004 could see some decent machinery moving,'' said Rick Horrocks, managing director.