Driven by pent-up demand, the economic picture for many extruder makers is brightening but suppliers of extruders for construction products like vinyl windows and siding remain on the sidelines.
A strong packaging market for blown and cast film and thermoforming sheet is putting smiles on the faces of suppliers of those type of extrusion lines. K 2010 was marked by a first, as two companies ran nine-layer blown film lines: Italy's Macchi SpA and Germany's ReifenhÃ¤user GmbH & Co. KG.
It's the only time a nine-layer ran at the show, let alone two of them, said Steve Gammell, sales manager at Macchi North America Plastics Machinery Inc. in Gainesville, Ga.
Macchi was running polyethylene film with ethylene vinyl alcohol barrier material and tie layers. It's very difficult to run true barrier films on a daily basis [at a trade show], where you're shutting it down every day, Gammel said.
ReifenhÃ¤user decided not to run barrier film, in order to show how a nine-layer film line can improve production of other types of film, according to Steve DeSpain, vice president of sales and marketing for Reifenhauser Kiefel Extrusion in Danvers, Mass. ReifenhÃ¤user bought Kiefel Extrusion GmbH in 2009.
Most customers, they really can't sell out 100 percent of their capability in a nine-layer line. But you need to have that to be able to make other structures. We were trying to show the ability to run a commercial-grade three-layer or five-layer film, without any sacrifices, DeSpain said.
Both DeSpain and Gammell said the buzz from K 2010, held Oct. 27 to Nov. 3 in Dusseldorf, Germany, is helping their business. We booked one line order for North America (since the K show) and we're also working on numerous others, Gammell said. Demand is reasonably good in 2010. Right now there seems to be an interest in the midsized three-layer lines. I'm also getting more interest in five-layer configurations and dies.
Interest is catching on in the United States for stretch hood films, Gammell said.
DeSpain has seen a pickup in business in Reifenhauser Kiefel Extrusion's fiscal year that began in July. I think there's been a lot of pent-up demand. People have gotten to the point where they just can't hold off anymore. They've got to make expenditures to be competitive. It appears that film makers are replacing outdated equipment, he said.
Brampton Engineering Inc.'s president and CEO, Bud Smith, said global film capacity has been tight, and now customers are having trouble making deliveries. They need to add production.
Smith said he was not surprised by the brisk pickup in film machinery in the second half of 2010. All the economists were saying it'll be a slow recovery, but I said in our business, once it starts, it's going to catch fire, he said. And it has. Now I'm trying my hardest to increase our capacity by 50 percent.
Andrew Wheeler, vice president of Windmoeller & Hoelscher Corp. of Lincoln, R.I., had the largest order intake in company history in December 2009 and January 2010, so he knew it would a good year. Both printing and blown film equipment did well, he said. Food and medical packaging are the strongest markets.
The German parent company launched several technologies during a well-attended open house in late 2009. Wheeler said that sent a signal: W&H kept innovating in the recession.
Our outlook is still very strong. We're going into the new year once again, with an outstanding backlog, he said.
Wheeler said the credit crunch has eased, but financing remains an issue. It's still tough. People are not getting the money as easily. There is money, though, and it's certainly better than it was a year ago, he said.
David Nunes, president of Hosokawa Alpine American, agreed that financing is much improved from a year ago. But lenders are still very conservative, especially with companies that are too highly leveraged, he said.
Business has been strong at the company in Natick, Mass. We've been selling the whole range, from high-end barrier lines, and even some commodity lines. So it's been a wide range, and all in all, it's been a good, solid year for us, and we're really sitting with a good backlog going into 2011, Nunes said in an interview at K 2010. Hosokawa was running a five-layer line with an X-die, making a variety of three-layer films, to show how that improves properties and reduces resin costs.
Nunes said orders are coming from a broad range of markets, including barrier food packaging, lamination films and shrink-bundling films. Pretty much the whole spectrum of packaging films. There appears to be a lot of pent-up demand for equipment from companies that weren't investing because they were still apprehensive about what the markets were going to do, or companies that wanted to invest but couldn't get financing.
So it's a combination of those things that kind of delayed some capital expansion, that is being released now, Nunes said.
Companies that make sheet lines also are reporting good sales. Processing Technologies International LLC is having its second-best year ever in 2010, and has a strong backlog for 2011, according to President Dana Hanson.
Most of that is from U.S. sales, and the lion's share of that is packaging, Hanson said. We saw a lot of activity in PET, which is a very cost-effective packaging solution today, given the low prices of PET resin, he added.
PTI also has sold machines to make polypropylene sheet, but sales of extrusion lines for polystyrene sheet have been soft, he said.
In 2011, PTI will install a dryerless sheet line for PET and the bioresin polylactic acid at its headquarters in Aurora, Ill., through a partnership with Italy's Bandera Luigi Costruzioni Meccaniche SpA.
We took an order recently for the largest dryerless PLA system in the world, Hanson said. He declined to identify the customer but said it is in North America.
This year has been better than 2009, for sure, said Hayes Stripling, vice president of sales at Welex Inc. of Blue Bell, Pa. We had a pickup in activity. We had a pickup in orders. There did seem to be a lull there for awhile, but the K show was very good to us, and we have several projects we're pursuing since the show.
President Fred Jalili said custom sheet extrusion, recycling and compounding are good markets for Elk Grove Village, Ill.-based Advanced Extruder Technologies moving into the New Year.
However, Jalili remains concerned about tight financing for capital investments. He thinks this could hurt the economic recovery. He cites one Midwest customer, an established, 18-year-old company with no debt. Using its own building as collateral, the company tried to get $500,000 in credit. But Jalili said bank officials rejected that, saying they had too many empty buildings on their hands already.
The financial institutions and the government don't realize that to move the economy ahead, you need credit, Jalili said.
Davis-Standard LLC's North American business picked up in the second half of 2010, said Jim Murphy, president of Extrusion Systems at the company in Pawcatuck, Conn. He said Davis-Standard retained its core employees during the recession, and kept investing in new applications and technologies, so the company is in a good position to take advantage of the upswing.
In October, Davis-Standard bought Harrel Inc., which makes small tubing extrusion lines for medical and appliance.
American Kuhne Inc. recorded a modest 8 percent growth in sales this year, but 2011 looks much brighter, according to David Citron, sales and marketing director of the single-screw extruder maker in Ashaway, R.I. We are going into next year with a record-high backlog in our 14 years of business, he said.
Medical tubing continues to be a solid market. Citron also reports renewed demand for extrusion lines to make industrial products, both tubing and profile, plus machines for film sheet and fibers.
A long climb back
Construction remains in the doldrums. That has delivered a pounding to sales of extruders for making building products.
I'm still holding to my theory that it will be about three years until we see anything significant on extruders. We're seeing minute improvements. Nothing to write home about by any means, said Tom Brown, director of sales and marketing for extrusion at Milacron LLC, based in Batavia, Ohio. It's just going to be slow gradual improvement.
The U.S. housing sector collapsed in 2009, generating foreclosures, knocking down home prices and slamming new-home construction. Even worse: Resin statistics from the American Chemistry Council show those woes continued this year. Through September, Washington-based ACC said, U.S. sales of PVC into rigid pipe and tubing declined almost 19 percent from the same period of 2009. Vinyl sales into siding fell 18 percent.
PVC for fencing and decking was flat.
Brown said the remodeling sector is showing some life out there, as people stay in their current homes and fix them up
Paul Caprio seconded that outlook. We're a long way from a recovery. There is a tremendous amount of capacity in the marketplace, said the president of KraussMaffei Corp. in Florence, Ky. Even so, KM has received some orders, as some extrusion work has moved to new players.
But that is the exception, Caprio said.
Smooth-wall polyethylene pipe is one of the few construction-plastics areas that is growing, Caprio said. He cited pipe for water and natural gas.
Corrugated PE highway drainage pipe benefits from government stimulus-backed highway projects, said Al Hodge, president of R&B Plastics Machinery LLC, which makes single-screw extruders in Saline, Mich. He said PVC foamed and solid decking also is holding up as an extruder market.
R&B sells extruders into other markets besides construction, including reclaim, custom profile, sheet and medical tubing.
Medical always seems to go up, but it never seems to go down, Hodge said.