Executives of many compounding extruder makers report a broad pickup in U.S. machinery sales — to customers making filled materials, engineering resins, color masterbatch and biomaterials.
One big reason: a rebounding automotive sector, which ripples through the entire plastics supply chain. More cars and trucks means more compounded material. Now auto sales are growing again, after the miserable 2009 — when U.S. sales sank to around 10 million and General Motors Co. and Chrysler Group LLC plunged into government-funded bankruptcy.
Sales for this year are expected to grow to 11.5 million, about 15 percent. And estimates call for 2011 sales between 12 million and 13 million cars and trucks.
Now automotive suppliers are feeling healthy and ready to upgrade their compounding lines, according to several machinery executives.
NFM/Welding Engineers Inc. is having its best year ever for the TEM series of high-torque, high-speed compounding extruders, said Butch Noll, national sales manager. NFM manufactures the TEM line under a longtime license with Japanese extruder maker Toshiba Machine Co. Ltd.
Massillon, Ohio-based NFM is seeing solid demand for machines to compound highly filled resins, like glass-filled nylon for automotive, Noll said.
“People were using underutilized capacity before, and I think they have fulfilled that. So now there is a need for growth, which of course brings out new equipment,” he said.
Noll and several other compounding machinery officials cited pent-up demand. “I think all along people have had the capital, but they were afraid to spend it. So part of our growth has been people mothballing older equipment and buying new technology,” Noll said.
KraussMaffei Corp. President Paul Caprio said the Florence, Ky.-based company has seen a “tremendous increase” in quotes and orders for Berstorff compounding machines. “It's no surprise. If the molders are busy then you start seeing shortages from their material suppliers and they need new compounding equipment to get more capacity,” he said.
“We're seeing the projects and orders coming from across the board,” Caprio said. “It's a good situation.”
In a lean and just-in-time world, machinery leaders say the trend toward more-flexible extruders may be a permanent one. Compounders want machines that can do small runs, then get a quick changeover to run something else.
“The orders are less, but they're frequent,” Caprio said.
John Effmann, director of sales and marketing at Entek Manufacturing Inc., agrees. “What you see is that the 10,000-pound runs are basically gone,” he said. Some customers want to make five changes every day. Machines have to be easy to clean out.
Overall, business is strong at Entek, in Lebanon, Ore. “We're enjoying a good string of business in all compounding,” Effmann said.
Entek continues to run lab trials of biomaterials, and they can get pretty exotic, including corn husks and rise hulls, blended into the plastic.
Several companies said sales seemed to abruptly rise in mid-2010.
Coperion Corp. President Ulrich Bartel was a little worried when business remained sluggish in the first half of the year. “But in the second half, I would call it a boom,” he said.
Bartel's explanation: Unlike in 2009, companies had budgeted money to spend, but they remained reluctant early in 2010.
Coperion, based in Ramsey, N.J., is getting sales from all compounding sectors. “It's not only the number of machines that increased, but the size of the projects has been bigger,” Bartel said. “As the customers have reduced their engineering staff in 2009 and maybe 2010, they were asking for turnkey solutions. They want us to quote the machine and the entire production line.”
Century Extrusion President Bob Urtel also saw extruder sales pick up in the middle of the year. “The talk-talk-talk-talk was for the last 12 months. But the orders really started flowing in here about the June-July period, and they've kept up nicely since then,” he said. “They all seemed to pull the trigger within three or four months of each other.”
Urtel said business is well-rounded at the company in Traverse City, Mich., including recycled plastics, masterbatch and general compounding. Customers are also upgrading existing lines to boost speed and torque.
Urtel said smaller-lot production is a global trend. Some compounders want to run just one shift's worth of production.
Right now, American Leistritz Extruder Corp. is doing more business in specialty and niche markets — like direct extrusion and hot-melt extrusion for the pharmaceutical industry — than for traditional compounding, said Charlie Martin, general manager of the company in Somerville, N.J.
“General compounding is medium — there's some activity, but there's some capacity that needs to be used up,” Martin said.
Martin is “cautiously optimistic” about the coming year. “We're going into 2011 with a decent backlog and there are a number of projects pending,” he said.
“Our year has been extremely good,” said Wayne Stagner, president of SteerAmerica Inc. of Uniontown, Ohio. The company is converting inquiries from NPE2009 into orders, both for twin-screw extruders and for screw elements, shafts and barrels.
SteerAmerica also has introduced its own hot-melt extrusion line, the Omega P, targeting pharmaceutical, he said.
Indian extruder maker Steer Engineering Pvt. Ltd. opened the U.S. location in 2008. “Our recognition level has increased a great deal,” Stagner said.
While healthy automotive demand is the shiny present under the Christmas tree, another key compounding market — construction — is the coal in the stocking. Permits to build single-family homes plunged to 441,000 in 2009, the lowest level since World War II and less than a third of the level of just three years earlier, in 2006, according to the National Association of Home Builders.
And single-family starts have stayed weak this year. That means less vinyl windows and siding.
“I wouldn't put big green stickers on construction yet,” said Entek's Effmann.