The U.S. compounding extruder business managed to hang on this year, as compounders added capacity for packaging, tinkered with bioresins and offset high resin prices with new extruders to add fillers, machinery officials said.
But 2009 is the Big Unknown.
``We're gonna keep grinding away,'' said Charlie Martin, general manager of American Leistritz Extruder Corp. in Somerville, N.J.
The collapsing automotive and construction industries two major compounding markets have taken their toll.
``All the markets are down, with the exception of packaging. Some food packaging companies seem to be still moving forward,'' Martin said.
For American Leistritz, 2008 was a decent year, he said. ``But next year, the backlog is not so great. The first quarter of next year, I would say is not a train wreck, but it's certainly not good.''
A construction meltdown has hammered PVC compounding, as vinyl windows, siding and other building products face a rough 2009. ``That's been hit hard right between the eyes. There are projects that have been postponed,'' said Jan van Bakergem, president and chief executive officer of Coperion Corp. in Ramsey, N.J.
Coperion is selling machines to big multinational petrochemical players that can expand in high-growing parts of the world. ``Big boys in these rough times,'' as van Bakergem put it.
But overall, too many compounding projects are getting pushed back. ``When there is a project, in most cases they have hit the postponement trigger,'' he said.
Farrel Corp. in Ansonia, Conn., is enjoying a healthy backlog, thanks to export business to Europe, India and China, said William Flaherty, vice president of worldwide sales and marketing. But the U.S. market ``is kind of a question mark.''
``From the fourth quarter of this year, people are pushing those [projects] into the first quarter of 2009,'' Flaherty said. He said the PVC compounding market has been slow for the past two years.
The price of resin skyrocketed in mid-2007, before sinking toward the end of the year. Farrel is selling masterbatch lines, to add calcium carbonate and other mineral fillers. ``When resin prices are high, people try to fill the material,'' Flaherty said.
Some of Farrel's compounding customers that typically run smaller machines have purchased larger extruders. ``People are trying to be larger players in a smaller market,'' he said.
``The wider your product offerings are, the better you will do,'' said Reiner Bunnenberg, vice president of extrusion at Krauss-Maffei Corp. in Florence, Ky., which includes Berstorff compounding extruders.
Bunnenberg said specialized applications will do well, but automotive and construction, are very quiet. ``If you are a pipe producer right now, and you built up a big inventory based in the higher resin price earlier in the year, you cannot sell that inventory now unless you take a big loss,'' said Bunnenberg, Some construction markets are holding up, including foamed insulation and roofing membranes.
But business will be hard to come by next year. ``We are not done with the worst part of the collapse of our customers,'' Bunnenberg said.
The housing downturn is hurting wood-plastic composites, which are used for decking. But for Entek Manufacturing Inc., growing interest in bioresin has taken up some of the slack, company officials said.
Bioresin projects accounted for more than a third of laboratory trials at Entek headquarters in Lebanon, Ore. The first products for Australia-based bioresin pioneer, Plantic Technologies Ltd., were run at Entek's lab in 2005, and the two companies continue a solid business relationship today.
This year, Cereplast Inc. bought a twin-screw Entek extruder for a new bioresin plant in Seymour, Ind.
Entek officials expect the wood-plastic composites market to continue to be flat in 2009, which will cut into sales of the company's larger twin-screw extruders. But John Effmann, director of sales and marketing, said the company enjoyed stronger sales of its smaller and mid-sized twins, with screw diameters of 40, 53 and 73 millimeters. The trend should continue in the new year.
``In the color compounding market, many processors like the ability to run smaller, customized lots of materials,'' Effmann said. ``The same goes for the bioresin suppliers, although once their products have gained commercial acceptance, they tend to move towards the larger, higher-output production machines.''
Entek also predicts ongoing strength for replacement screws, barrels and other wear parts a theme echoed by several other compounding extruder suppliers.
An Indian maker of twin-screw compounding extruders, Steer Engineering Pvt. Ltd., opened a U.S. headquarters and technical center in Uniontown, Ohio, this year. ``We're new, but we've done very well getting out of the gate. We've gotten attention from a lot of customers,'' said Wayne Stagner, president and CEO of SteerAmerica Inc.
This month, the company is starting up its two Steer extruders for customer trials. Mike Millsaps, director of sales, said Steer is focusing on customer service. Markets that are growing include biofuels, color compounding and glass-filled nylon, he said.
As the new kid on the block, SteerAmerica can make a splash. But Millsaps said in general, buyers remain cautious.
``I haven't seen any projects canceled,'' he said. ``But after everybody sees the news on TV and reads the newspaper, in the back of their minds, there seems to be a fear factor.''
Van Bakergem, of Coperion, said the outlook is cloudy. ``Hopefully this thing starts turning out of the mud somewhere in the fourth quarter of next year,'' he said.