Mark Sankovitch, the new president of Engel Machinery Inc., said the spare-parts business is bouncing back from the recessionary doldrums and he wants to keep the ball rolling.
Increased demand for spare parts, along with replacement screws and barrels, means processors are spending money on their equipment. After the brutal recession, that's a good sign and should lead to sales of new injection presses, he said.
There's been an uptick in the spare-parts side of it, Sankovitch said. Spare parts are always a very big indicator whether the market's coming back or not. If you see your spare-parts business starting to grow, you get a nice surge with it as these machines come back on board.
Sankovitch became president of Engel Machinery on March 31. He replaced Stephan Braig, who left Engel to become the top executive of Trexel Inc. in Woburn, Mass.
In an early-June visit to Plastics News in Akron, Sankovitch outlined his commitment to spare parts and service, and gave his thoughts on the North American market for injection molding machines.
The plastics machinery sector endured a gut-check in 2009. U.S. shipments of injection presses plunged to 1,285 units, a 47 percent decline from 2008 shipments of 2,444, according to the Society of the Plastics Industry Inc. That means 2009 stands as one of the worst years ever.
Officials of Austria-based Engel Holding GmbH faced their own tough decision in 2008, when the injection press maker closed a long-standing factory in Guelph, Ontario. Engel started that plant in 1976. Officially, Engel said it was moving some of the assembly work to the Engel Machinery headquarters in York, Pa. but the depressed U.S. market caused the company not to do any assembly in York last year.
The moves happened under Braig, but Sankovitch said they made sense, to make the organization reflect a much smaller market. Still, closing Guelph initially hurt Engel's spare-parts operation for about a year, Sankovitch said.
When you close a manufacturing facility down that has all the infrastructure built into it, and you have all the engineering staff there, that whole support structure, all of your spare parts, are basically feeding your production line, and they're also for the aftermarket, he said.
Engel Machinery switched from making its own spare parts in Canada to getting parts from Schwertberg, Austria. That first year was very, very difficult, Sankovitch said.
North American manufacturing had set Engel apart from other European press makers. After all those years, the Guelph closing also raised questions from some North American customers, even a sense of abandonment, he said.
But Engel has invested to open technical centers in California and Mexico, and has beefed up its regional service managers to get closer to customers. Engel reaches the market using a mix of service managers, regional sales managers, direct-account managers and manufacturers' representatives.
Engel already is known as a technology leader, Sankovitch said. What we need to re-establish is not just the equipment. It's also the after-sales support, he said. The message that's important to get out to the market now is that we are here. Even though we've closed the plant in Canada, we're still a very strong organization from a people aspect.
Sankovitch has 21 years of experience with Engel presses 18 working at manufacturers' representative Fisher Sales Corp. of St. Charles, Ill., and the past three years full-time with Engel in York. Engel hired him as a Midwest regional sales manager.
He married into the machinery business. After getting a chemistry degree from Central Michigan University, he worked for two years at Dow Corning Corp. in Midland, Mich. He left to get his MBA from Michigan State University, then returned to Dow Corning, working in a sales and marketing job in Chicago. There, he met his wife, Mary Ellen Fisher the daughter of Arnold Fisher, who founded Fisher Sales in 1959 and built it into a major rep firm.
Sankovitch got a marketing sales job for Exxon Chemical Co. and they moved down to Houston for two years. He left to start a business, then decided to get out of the chemical industry. He joined the family business in 1989, running Fisher Sales' after-sales support side.
He was a chemist, not a machinery guy. I didn't know anything about equipment. I was not mechanically inclined whatsoever, he said. But handling spare parts like heater bands, thermocouples and transducers forced him to learn the components and how they work on an injection press.
Sankovitch made frequent trips to Guelph and started going over to Schwertberg, where he met Engel's owners and top technical people. He said the company's long history and stable family ownership should put customers at ease.
That experience gave Sankovitch an appreciation for parts and service an area he said injection press makers took for granted during the booming 1990s, but lean very heavily on now since press sales are down.
Sankovitch said North American business has been brisk for injection molding machines the past two or three months. It's a distinct pickup. There's a steep pickup to it, he said.
But at the halfway point of 2010, nobody knows if that level of growth will be sustainable through the whole year, he said. There are some good signs: There is not a lot of good, late-model used equipment on the market, as auctions and those amazing deals on 1- or 2-year old machines finally slow down. The used machinery market is pretty much dried up, Sankovitch said.
At the same time, machinery manufacturers have reduced their inventories of new presses during the recession.
And press suppliers are promoting energy-saving technologies such as all-electric machines. At the K 2010 show this fall in Germany, Engel will show a new all-electric press for molding caps and closures, called the e-Cap. Engel also has been running ads in trade magazines showing head-to-head comparisons of power consumption.
Sankovitch said the important automotive market started buying injection molding machines again in the fourth quarter of 2009, as molders that survived the shakeout win new jobs and tooling gets moved around.
You walk into some of these [molding] plants and they've got some large-tonnage machines, but they're energy hogs because it's older equipment. They need to invest in some of this infrastructure, he said. So I think that's where you see a buildup of people buying equipment for the automobile sector.
Sankovitch said machinery executives are predicting U.S. shipments for 2010 in the range of 1,700-2,000 a healthy increase of about 30-50 percent from the depressed 2009 numbers, but well below the level of 2008.
He said a new, downsized plastics industry is starting to grow, in typical fashion after coming out of an economic downturn.
The recession takes out the excesses. It squeezes all the water out of the sponge. Because the sponge just can't absorb any more water.
We had too much capacity, so the recession squeezes and squeezes. Now it's starting to re-inflate itself, Sankovitch said.
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