The head of Battenfeld of America Inc. sees better times ahead for U.S. molders, as they buy higher-end machines and hire employees with more skills than ever before.
``We believe, we hope, that the worst is over,'' Michael Santa said in an address Sept. 14 at a technology conference at Battenfeld of America's new headquarters - the first major event at the facility in South Elgin, near Chicago.
``I think we've survived and have come away from it stronger and wiser. I believe that the future, albeit difficult and challenging, appears bright,'' said Santa, president and chief executive officer.
Battenfeld opened the 16,500-square-foot South Elgin facility in August 2004. Today it employs 35. The move marked a big change, as the company left its longtime home of West Warwick, R.I.
Battenfeld of America, part of Dusseldorf, Germany-based SMS Plastics Technology, sells injection presses built in Meinerzhagen, Germany, and Kottingbrunn, Austria.
About 165 people attended the two-day conference, which showed off the building's demonstration area and training room. Many were from injection molding companies in the Midwest, which Santa said is by far the biggest region for injection press sales in the United States.
Santa, who lives in the Chicago area, cited statistics from the Society of the Plastics Industry Inc. that back up the company's move. ``The area that we sit in right now is still the lion's share of the market. It's right at 40 percent,'' Santa said.
To date this year, the five Midwestern states of Illinois, Indiana, Michigan, Ohio and Wisconsin have accounted for 35.4 percent of all injection presses purchased in the United States, measured by units. Measured by dollar sales volume, the five-state region is responsible for a whopping 40.1 percent of the business.
``That's an amazing amount of units that are being sold in this area,'' Santa said.
Units and dollar volume both increased from the levels of 2000 through 2004 for the five-state area - designated by Washington-based SPI as the east-north central region. Santa said Ohio is the only state to decline so far in 2005 from its averages the past four years.
The New England area has declined substantially. Santa said the region, the birthplace of the plastics industry, represented about 18 percent of the U.S. press market 10 or 15 years ago. From 2000-04, New England made up 6.5 percent of unit press sales. That has fallen to just 3.8 percent so far in 2005.
The region covers Connecticut, Massachusetts, New Hampshire, Vermont, Maine and Rhode Island.
``It's very difficult. There's a lot of costs involved in manufacturing in the Northeast region,'' Santa said.
Santa also reviewed other SPI statistics he said reveal strength in large-tonnage, higher-performance presses and all-electric machines.
This year, all-electric presses represent 40.5 percent of all injection presses bought in the United States, measured by units, Santa said - a dramatic surge from the 27.2 percent in the 2000-04 period, he said.
``There was one month in that time frame where 58 percent of the units were all-electric,'' Santa said.
He said the numbers are proof all-electrics are being widely adopted, beyond the medical market.
Large-tonnage machines, defined as those having a clamping force of 1,000 tons and above, now account for about 30 percent of the total U.S. dollar volume, up from 20 percent from 2000-04. ``It's an unprecedented level of large-tonnage machines being sold,'' Santa said.
Today's strength in big machines and specialized, higher-technology presses is reflected in the average sales price. From 2000-04, the average press, covering all sizes, was $192,000; the average price today is $230,000.
According to SPI data, the U.S. injection press market appears to have stabilized at about 3,500-4,000 units a year. That's only about half the number of the glory days of the late 1990s and first half of 2000, Santa said.
Punished by molding work moving to China and, more recently, skyrocketing resin costs, molders still in business have adapted and focused on specific niches. General-purpose molding has fallen off in the United States, as companies are using technology to cut costs and become profitable, Santa said.
Plastics employment is down, but Santa applied a positive spin, saying manufacturers are attracting young people with high-level technical skills.
``Unlike in the past, there will continue to be a trend for less employees. But guess what? Those employees better be damn good and that's what we're seeing,'' he said.
Santa said catastrophic events such as a terrorist attack could wake up Americans to the importance of making things in the United States.
``The vulnerability of a weak U.S./North American manufacturing sector will become exposed, which in turn will re-stimulate growth,'' he said.