Changes in the blow molding market are pushing Nissei ASB Machine Co. Ltd.'s new president to move the Japanese machinery maker in a new direction, with an eye toward growth in India and a shift to more market-based product development.
Nissei has seen its PET bottle equipment markets shrink about 10 percent since the financial crisis started in the U.S. three months ago, said Kota Aoki, who took over as Nissei president Dec. 19 from Ichiro Mizuuchi. Aoki's father, Daiichi Aoki, is chairman of the Komoro, Japan-based company.
``At this moment, it is quite tough because of the world economic crisis,'' Kota Aoki said during a Nov. 8 interview at the recent International Plastics Fair in Tokyo. ``I can say the market is shrinking about 10 percent.''
Aoki, who was Nissei's general manager of sales and marketing, said he does not know if the markets have hit bottom.
``This is one of the difficult points,'' he said. ``At this time, we cannot predict what it's going to be six months later … Most customers say they have a lot of work but the bank won't give them the money so they can't buy the machine. The market itself is not shrinking but [it is] just a temporary stopping of investment.''
Still, Aoki said Nissei is seeing strong growth in India, partly because it has manufactured there since 1997 and sold into that market since 1984.
``In the last three years, the Indian growth is dramatic,'' said Aoki, who headed the company's Indian operations for five years. That country now accounts for about 10 percent of Nissei's sales, more than China, a market that Aoki described as a ``stable'' market yet more difficult because of intense price competition. ``If we sell a machine [in China], there are no profits,'' he said.
Although the firm has no specific plans to expand production, Aoki said, ``I am always thinking if we have a chance to expand our production in India — maybe it's a good time now to invest, because nobody is investing.''
He said Nissei also sees potential in Africa and could be helped by the strong business ties between India and Africa.
At IPF, the firm unveiled its HSB-6N machine for hot filling, which doubles production from previous models and makes hot-fill bottles more competitive against aseptic packaging, according to Paul Atkin, Nissei's section manager for sales and marketing.
Aseptic packaging had been taking business from PET bottles but Atkin said Nissei is hearing from Japanese customers interested in switching back, because PET bottles are easier to manufacture if the cost is right.
The company also showed a new generation of its ASB-70DPH one-step stretch blow molding machine, which reduces power consumption by 40 percent compared with previous models, along with its ASB-15N/10E, which it introduced last year as the first all-electric one-step stretch blow molding machine.
Aoki also said Nissei is looking at PET beer bottles, and developing technology to make PET 5-gallon water bottles more efficiently and improve their performance. He said the firm is hearing from people who want to move away from traditional polycarbonate 5-gallon bottles, given health concerns about bisphenol A.
It is important for Nissei to steer research and development in a more market-oriented direction, Aoki said. The company — one of the early firms in the PET bottle industry starting in the 1970s — sometimes had developed new technology without much attention to market trends. ``We have to be more sensitive to the market,'' he said.