With historically unprecedented factors affecting the North American manufacturing climate, the industry consensus for thermoforming is that the ride will be bumpy and a “new normal” may require five years of patience.
According to figures gathered by Plastics News, thermoforming total sales in North America have grown from $6.99 billion in 2005 to $9.1 billion in 2010. The top 10 companies represented 57 percent of sales in 2005 and that figure stayed the same for the 2010 ranking. Total sales for the top 10 grew from $4 billion in 2005 to $5.14 billion in 2010.
Packaging as a percentage of total sales grew from 81 percent in 2005 to 84 percent in 2010 with industrial making up the rest. End markets including building and construction, automotive and transportation, signs and displays and marine have taken a beating.
“To get back to normal will take us, in many of these markets, five years. That's kind of daunting,” said industry consultant Peter Mooney of Advance, N.C.
Industrial thermoformers are weathering the storm.
Lewis Daly, vice president of engineering for Triad Technologies Inc. in Syracuse, N.Y., said his firm sees a gradual return to profitability. Triad's business primarily is molded fiberglass. Thermofoiling — a three-dimensional laminating process for vacuum forming vinyl — and vacuum forming make up smaller business segments.
“As the economy slowly comes back due to all the small businesses having faith in America we see a gradual return to profitability. It's not optimism — just faith, tough business decisions and hard work,” he said.
Looming worry over Obama Administration policies such as cap and trade were among other issues sources discussed.
“In terms of the chastening effect that came from the Massachusetts election, cap and trade is dead at least for this year,” Mooney said. “Jobs, jobs, jobs [is the] concentration now. It would be economic madness to push anything like cap and trade this year.”
Although manufacturing has changed a lot and officials have seen a lot of capacity taken out on the supply side and processing side, officials remain optimistic.
Brian Ray, chairman of the Society of Plastics Engineers' Thermoforming Division, said the group already is seeing good numbers for its fall conference in Milwaukee in terms of attendees and exhibitors. The division canceled its 2009 conference precisely because of the economy.
“The economy still has issues,” Ray said in a Feb. 8 telephone interview. “There are a lot of distractions out there. Everyone is focused on their business, becoming more efficient, and being more aggressive.
“With a niche process, there is lots of opportunity for those types of volumes. The process fits so many needs in so many markets. It will continue to grow. The worst is behind us.”
He said thermoformers are interested in thin-gauge packaging and new materials including corn-based and recycled materials. On the heavy-gauge side, there will be opportunities in wind and solar power as ideas take shape to change the reliance on oil.
“When volume does come back, there will be new things in the marketplace,” Ray said.
In addition, there are companies expanding in the market.
Industrial molder Wilbert Plastics Services Inc., for example, will relocate its headquarters and add capacity to its thermoforming operations over the next three years.
Some thermoformers are investing internationally, too. Packaging thermoformer Prent Corp. of Janesville, Wis., for example, recently has opened plants in China and Denmark.
“Prent went offshore and has been very successful,” Mooney said.
Expect to see a lot more growth in Latin America, especially as Brazil gears up for the 2016 Olympics. Brazil also is part of the BRIC economies, which include Russia, India and China.
“People all across the country are saying that's where we have to start exploring if we're not already there,” Mooney said of export opportunities.
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