When it comes to the U.S. market, blow molding machinery was a mixed bag in 2005. The cost-sensitive packaging sector got hit by zooming resin prices. In accumulator-head machines, single-layer machines suffered through a dismal year, while new environmental rules drove sales for their high-tech cousins, multilayer coextrusion machines.
PET enjoyed some bright spots, as new 12-ounce soda bottles appeared on store shelves and Coors Brewing Co. heavily marketed its Plastic Cooler Box for beer.
Damage and shutdowns of petrochemical plants from Hurricanes Katrina and Rita caused uncertainty to ripple through packaging producers, a key market for blow molding equipment.
Bekum America Corp. President Martin Stark said in late October that concern about the availability of polyethylene could hurt extrusion blow molding machinery sales into 2006. ``I'm afraid it [will be] four to six months before the customers are confident again to place orders for millions of dollars' worth of equipment,'' he said.
Stark said business typically slows down a month or two before the NPE show, slated for June 19-23.
Despite the uncertainty, packaging innovation marches on, and Stark said Bekum America of Williamston, Mich., has won some new work on specialty containers.
But the hurricanes clouded Stark's crystal ball. ``Next year I would have a tough time giving you a good forecast,'' Stark said.
James Sheely, vice president of business development at R&B Plastics Machinery LLC, also said the problem was finding enough resin in the wake of the hurricanes.
``I'm not saying that's what we're hearing across the industry, because some people did a little pre-planning and don't seem to have a resin-flow issue. But there have been customers that have told us they're not going to spend capital until they know what's going to happen with resin availability and being able to get what they need,'' Sheely said Oct. 12 at the Society of Plastics Engineers' Blow Molding Conference in Toledo, Ohio.
During the SPE conference, R&B held an open house at its plant in Saline, Mich., to roll out its line of continuous extrusion shuttle blow molding machines, as a lower-volume and less-expensive alternative to R&B's core wheel machines. The shuttle machines will have features of a high-end machine, including integrated deflashing and takeout systems to remove finished bottles from the double-sided press. ``They're completely trimmed coming out of the machine,'' he said.
Entering the shuttle market places R&B in direct competition with Bekum.
Uniloy Milacron in Tecumseh, Mich., is a major supplier of extrusion blow molding machines and molds for PE milk jugs. Dave Scala, vice president and general manager for Uniloy Milacron North America, said the price of dairy gallon bottles already was moving up before Katrina and Rita. But the hurricanes caused supply problems that, combined with the big consolidation of the dairy industry, slowed the company's business down after ``strong momentum'' through the first three quarters of 2005.
But Scala stressed the resin supply problems are temporary.
``My sense is, it's going to stabilize pretty quick,'' he said in late October. ``My sense is that 2006 is going to pick up the momentum that we were feeling in the first part of 2005.''
Russ LaBelle, president of Wilmington Machinery Inc., also said resin price hikes have ``slowed the decision-making somewhat'' on equipment purchases, but he said it's not a major issue, long term. High resin costs have helped draw attention to the Wilmington, N.C.-based company's efforts in foaming, wood fillers and nanocomposites, all of which reduce the weight of a package, he said.
The Coors Light 18-pack, which began shipping in May, comes in a box that holds ice to become a portable cooler - promoting the portability of the 16-ounce plastic bottles. Convenience Store News named the box the Best New Packaging Innovation of 2005.
While beer continues its slow-and-steady U.S. growth, 12-ounce PET soft drink bottles hit U.S. shores this year.
For SIG Beverages North America Inc., higher PET resin prices have helped open up a whole new machinery market - bottlers - according to Peter Andrich, vice president of sales.
Bottlers are starting to blow mold their own bottles, to shave off weight and use less of the costly resin, Andrich said at the SPE conference in Toledo. The bottler also can eliminate the transportation costs charged to ship PET containers from a converter to the bottling plant.
Higher resin prices are driving the change. ``The challenge with running extremely lightweight bottles for the converter to ship them is that, when bottles are too large and too thin, they are also too fragile to be packed and shipped and palletized and moved around,'' Andrich said. ``So that means the last 1, 2, 3 or 4 grams, you cannot get them out of the bottle unless you mold it where you fill it.''
Andrich said the resin savings in one year can pay for the cost of the machine, in a high-production plant. The bottler-as-molder trend will continue, he said.
SIG, based in Hillsborough, N.J., is promoting its technology to make bottles as thin as possible. ``We are having a record sales year in the U.S.,'' he said. ``In fact, we are about 120 percent above budget, which even surprised ourselves.''
Custom containers for food and personal-care products are solid businesses for one-step PET machines from Atlanta-based Nissei ASB Co., said Craig Arnold, sales manager. ``Even though there are downturns with resin pricing doing what it is, people still eat; people still have to bathe and take care of themselves,'' he said.
The hurricanes did cause Nissei ASB to revise its forecast slightly for its fiscal 2006, which started Oct. 1. Arnold said officials added contingencies based on potential resin scenarios.
Tale of two markets
North Branch, N.J.-based Kautex Machines Inc. sold several six-layer coextrusion machines - huge accumulator-head presses for blow molding fuel tanks. Historically, Kautex has been strong in car gas tanks, but these new machines will turn out fuel tanks for lawn mowers, snowmobiles, boats, all-terrain vehicles and other smaller engines.
The six-layer machines are assembled in Bonn, Germany, by parent Kautex Maschinenbau GmbH.
While the multilayer business is solid, tough times continue for simpler accumulator-head machines that run single-layer parts such as trash cans and big storage sheds.
Back in the late 1990s, suppliers sold as many as 150 of those presses a year to the U.S. market. The market was around 100 in 2000, but since then has dropped like a rock, according to several industry experts who said that, as of October, only nine of the single-layer accumulator-head blow molding machines had been sold in the United States at that point.
Frank Kennedy, sales director for accumulator-head machines at Davis-Standard LLC, said automotive molding has too much capacity, although some Japanese transplants are buying blow molding machines. The toy business, another big market, largely has left the United States.
``I tell people we're back to where we were in the 1960s and '70s time frame, where now what we're seeing is just the incremental business,'' Kennedy said in Toledo. ``So is this a crappier year than usual? Absolutely. Now, what's it going to be? Is it going be a 25-, 30-machine market over the next few years? That's my best guess.''
Some new products are in the pipeline. Kennedy said new residential building codes call for emergency routes to exit an underground basement, and early versions are blow molded plastic panels for steps and outside doors.
Davis-Standard this year announced it was building larger-sized blow molding machines, expanding its line to larger sizes for customers that mold large outdoor, industrial-type parts.
``We've seen an increased demand for machines with 50-pound head sizes and larger driving the market,'' Kennedy said. Davis-Standard currently builds accumulator-head presses that run up to 125 pounds of material.
Uniloy Milacron has enjoyed some success in automotive, selling machines that blow mold headrests.
Robert Jackson, president of Jackson Machinery Inc., said blow molding entrepreneurs, not machinery companies, are developing new technology. One major innovation will be what Jackson calls ``composite molding'' that turns out parts with a hard substrate, then other layers of soft foam or other materials - all done inside the machine.
But Jackson thinks some industrial blow molders, and machinery makers, will struggle to survive until the next developments resurrect the single-layer sector.
Another problem facing equipment makers is the large amount of used single-layer machines on the market.
Sheely said R&B's business for new machines was slow this year. ``In 2005, we've done more rebuild/retool business than what we've built in new machines,'' he said.
Jackson Machinery also has been busy refurbishing older machines at its plant in Port Washington, Wis.
Jackson said customers want machines upgraded to meet ANSI safety standards, equipped with new extrusion heads, modern controllers and robots.
But for new machines, Jackson said there are too many manufacturers chasing a smaller pie. ``It's an industry that has to change and downsize,'' he said.