There is a ``pent-up demand for new machinery'' in the U.S. market, but plastics processors need stable resin prices so more companies can pull the capital-investment trigger, according to the top executive at Milacron Inc. (Booth S1702).
``We are watching this very closely. It's very important for the entire industry, for oil and resin prices to stabilize,'' said Ronald Brown, Milacron's chairman, president and chief executive officer.
Brown, at a pre-NPE news conference, outlined two key economic indicators that normally would point to robust machine-buying activity. Capacity utilization - the rate of machines in use at U.S. plastics and rubber factories - hit 90.8 percent in April.
``This is the highest level since the mid-90s. And traditionally, when it's at that rate, that's when we see, historically, increases in ordering for capital equipment,'' he said. ``But the resin prices, the oil prices, are still having a dampening effect on that.''
Plastics part production also is growing, Brown said.
Brown said the tight capacity, and the need to replace aging machinery, shows ``the need is there.'' But he added: ``It's a question of, when can that customer base begin buying new equipment? Can they afford it? Do they have their own profitability and cash flow in order to justify doing that?
``For the industry to spend, they need to be profitable, as an industry. And that is the limiting factor at this point in time,'' Brown said
Milacron leaders outlined their plans for NPE 2006 for injection molding machines, extruders, blow molding machines and mold components during a May 17 news conference at the company's U.S. assembly factory in Batavia.
Milacron is showing 10 machines at its booth this week, including an injection press featuring a double-turning stack mold with two rotating cubes doing in-mold assembly. Milacron also is rolling out its new global controller, the Mosaic, which the company plans to expand across all its machinery lines.
Karlheinz Bourdon, president of Milacron's global plastics machinery, said the highest growth rates for machinery will continue to be Asia and Eastern Europe. ``But in all places of the world, you'll see growth,'' he said.
``North America seems to be what I would call in a strong recovery mode. And that continues,'' Bourdon said.
All-electric injection presses are one of the bright spots. They accounted for about 40 percent of the U.S. market for injection presses in 2005, measured by units, up from about 30 percent the year before.
Bourdon said Milacron, in the first quarter of 2006, saw a 40 percent increase in new business and orders for all-electrics, in unit volume, from the first quarter of 2005. Measured by dollar value, orders for all-electrics grew by 33 percent, he said.
``This is a very strong sign that our product strategy with all-electrics is really paying off now,'' he said. ``We have been investing in that technology, as one of the first companies, and that goes back more than 20 years.''
U.S. sales of multimaterial injection molding presses also show solid growth, Bourdon said.
NPE is the largest plastics trade show in North America - the most important region for the Cincinnati-based company. Milacron's North American machinery business generated nearly half of the total company 2005 sales of $809 million.
Although sales have been increasing for Milacron the last several years - and orders have grown, including a strong 11 percent gain in the first quarter of 2006 - Milacron has not turned a profit since 2000. But the amount of red ink has steadily declined each year, and in 2005, Milacron lost $14.1 million, down from a $51.8 million loss in 2004.
At the pre-NPE news conference, Brown said the company has cut costs and become more efficient, although some ``noncash'' items, such as pension costs, are masking the improved bottom line. At the same time, Milacron is developing new technology, as 30 new products are planned for this year.
Meanwhile, Bourdon pointed out, Milacron is positioned to be a global player, with factories in the United States, Europe, India and China.
``Our general strategy is to invest in the sales and service organizations in the emerging markets, because we want to be part of the growth that takes place in these regions of the world,'' Bourdon said.
Taking the global approach, the new Mosaic controller is designed to be easy to use, everywhere around the world. Milacron engineers in the United States, Germany and India designed the controller to use both a touch screen and manual buttons.
``The look and feel should always be the same,'' Bourdon said. Any screen can be reached from any other screen in two touches.
The Mosaic is now standard on all new Milacron injection presses, and as a no-cost option on the company's twin-screw extruders. Milacron now is offering the controller as an option, for an additional cost, on its single-screw extruders. According to Bourdon, Milacron will extend the Mosaic across the entire machinery offering, including blow molding, within the next few years.
Milacron is running 10 machines at its NPE booth this week. Its injection technology news includes:
* A two-platen Cincinnati Milacron-brand Maxima MG press with 1,100 tons of clamping force, molding a polycarbonate side-panel window for a sport utility vehicle, overmolded with a black-PC frame. Milacron is using a mold from Exatec LLC, a joint venture of GE Plastics and Bayer MaterialScience LLC that produces coatings for PC automotive glazing.
Milacron mounts the secondary injection unit, piggyback style, on an injection sled directly above the primary injection unit. The sled is mounted to the stationary platen, so it maintains good solid alignment.
``There is no impact whatsoever on the compact size of the press, while we're able to eliminate the need for two holes and any effect on platen stiffness,'' said Ronald Hertzer, director of technology.
The process shown at NPE this week is not a turning-stack mold, but Hertzer said Milacron can offer rotary tooling to mold the window glazing.
The press uses the coining process, filling the mold as it is nearly closed, then applying full tonnage to apply compression in the mold. Coining avoids molded-in stresses that could hurt the optical qualities of the window, but to make sure, a robot moves the part to an inspection area that uses Avalon vision inspection. Hertzer said an infrared light reveals any molded-in stress. Software compares each window to the parameters, and the system automatically rejects bad parts.
The Maxima also has a Staubli magnetic mold-clamping system, and a tie-rod puller, for quick mold changes.