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March 02, 2009 01:00 AM

Netstal joins Nissei in pulling out of NPE

Bill Bregar
Senior Staff Reporter
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    Two major injection molding press makers — Japan's Nissei Plastic Industrial Co. Ltd. and Switzerland's Netstal-Maschinen AG — have pulled out of NPE2009. Now the leader of NPE's organizer is traveling to Asia and Europe to meet with major exhibitors.

    Bill Carteaux, president and chief executive officer of the Society of the Plastics Industry Inc., said NPE2009 has a 3 percent cancellation rate as of late February — which he said is a typical number at this time before an NPE show. NPE2009 is scheduled for June 22-26 in Chicago's McCormick Place.

    “The difference is that we've had some high-profile people, and for whatever reason, because times are tough, are opting not to come. That's what's different this time,” Carteaux said. Overall, he said, “We have 130 more exhibitors than we had at this time three years ago.” SPI still is selling about 2,000 square feet of space a week, mostly in small-sized booths.

    Carteaux said on Feb. 26 that he was preparing to leave for Asia, and then would travel to Europe in mid-March. “We're trying to meet with our big exhibitors to explain all of the new changes,” he said. “It's not your father's NPE. This show is completely different.”

    Officials of Netstal and Nissei both cited the economic downturn as the major factor in their decision not to exhibit.

    Netstal said the Chicago plastics show is too costly in the current economic climate. The cost of exhibiting cannot be justified by the anticipated returns, company officials said.

    Reto Morger, Netstal's marketing manager, said the decision not to show in Chicago this year was a difficult one and was not taken lightly. However, he said the continuing decline in U.S. injection molding machinery sales, together with the weak global economic conditions and the high cost of NPE, made it unavoidable.

    “It is a very expensive show and the timing is not good for us to spend so much money,” Morger said. Most of the cost of exhibiting comes from moving machinery and other expenses.

    “Only having a booth at NPE is not expensive. What is very costly is the labor and the technical supplies, which are very expensive compared with European and Asian shows,” Morger said. He added it would make no sense for Netstal to have a static booth without any machines running, to reduce costs.

    Carteaux disputed that viewpoint. Before coming to Washington-based SPI, he was a top machinery executive himself at Demag Plastics Group. He said if companies manage the planning process, the costs are similar for NPE and the K show in Germany. SPI also offers value-package pricing that can bring the costs down, he said.

    Netstal is the second major injection press supplier to withdraw from NPE2009. Earlier this month, Nissei America Inc., the U.S. unit of the Japanese press maker, announced it will not exhibit at the show.

    Netstal already had decided to cut back on its floor-space requirements after the last NPE in 2006 — when it showed a massive, 192-cavity PET preform machine and several other presses. In 2006, its booth totaled 7,650 square feet. For 2009, Netstal had reserved only 4,500 square feet of floor space, according to Rick Shaffer, Netstal's top U.S. official.

    Shaffer said Netstal had planned to take two or three injection molding machines to NPE2009. He said the weak market for injection molding machines makes that a hard decision right now.

    “I think the fact of the matter is, the effort and the expense of NPE for that size of booth is not justifiable,” Shaffer said.

    Morger said Netstal also learned the costs for running a high-output PET preform production system at the 2006 NPE.

    Morger said Netstal believes its decision not to exhibit at NPE will not hurt the company's position, because Netstal has a strong presence in critical market niches such as thin-wall molding, closure production and PET preforms. “We know our customers in North America very well,” he said.

    NPE comes at the midpoint of 2009, when the economic outlook should become clearer.

    “It's one of those things where we won't find out if it's a good choice [not to exhibit] or a bad choice until August,” Shaffer said.

    But North America is not the only region where capital spending on industrial equipment is down. Morger said global injection machinery sales in the fourth quarter of 2008 had declined by around half from the same quarter a year before.

    Netstal has not been able to avoid the impact of that decline, and its factory in Näfels, Switzerland, is currently operating on a four-day week under a 12-month assistance package provided by the Swiss government.

    Carteaux said some machinery officials have told him that business is better in the United States right now than in several other parts of the world. Tough economic conditions make it even more important for plastics companies to see advanced technology, as they face global competition, he said.

    NPE2009 will highlight new technology — including emerging areas like bioplastics, nanotechnology and energy efficiency — at special pavilions and in exhibitor booths.

    “We think the show, especially in these times, is extremely important, and we believe the attendees are going to go because there's so much to see and do at the event,” Carteaux said.

    Smith is editor of European Plastics News.

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