Germany's production of “core” plastics and rubber machinery increased 28.9 percent in 2010 to 4.9 billion euros ($7.11 billion) over 2009.
However, lower growth in non-core machinery — including printing and auxiliary equipment and tooling — brought overall growth down to 18.3 percent, with a production value of 7.46 billion euros ($10.8 billion).
In addition to releasing its final-year 2010 results June 9, the German Plastics and Rubber Machinery Association — VDMA — also provided global data on sales and consumption of plastics and rubber machinery.
VDMA estimates world production of core plastics and rubber machinery grew 38.1 percent in 2010 to 23.4 billion euros ($33.8 billion).
China is notable for having overtaken Germany as the largest producer in 2009, the gap having meanwhile widened further, with Chinese producers accounting for 29.3 percent of world production in 2010, compared with 21 percent for German producers, according to the association.
Both Italian (9.6 percent) and U.S. (5.4 percent) producers also lost market share in 2010, but Japanese producers managed to increase their share of world production from 4.1 percent in 2009 to 5.4 percent in 2010.
Though the value of Chinese production almost doubled from 3.8 billion euros ($5.5 billion) in 2009 to 6.84 billion euros ($9.9 billion) in 2010, only 21.9 percent has gone to exports, compared with 67.5 percent for German producers.
China therefore remains, as in 2009, the top export market for German producers, with a value of 587 million euros ($850.1 million) in 2010 accounting for a 17.7 percent share of German core plastics and rubber machinery exports.
VDMA Managing Director Thorsten Kühmann pointed out, “Japan had been the largest supplier to China in the past, but this status changed in 2009. Today, 20 VDMA member companies, 10 percent of overall membership, also produce in China,” Kühmann said.
That was illustrated in a complex trade-flow graph, in which Japan supplied plastics and rubber machinery worth 240.2 million euros ($347.8 million) to China in 2001, when Germany supplied China to a value of 161.7 million euros ($234.2 million).
Meanwhile, in 2010, German producers have reached 587.2 million euros ($850.4 million), slightly above the 577.6 million-euro ($836.5 million) level for Japanese suppliers. During 2001-10, Chinese exports increased rapidly in percentage terms, but at a low level. Currently China exports 85.2 million euros ($123.4 million) in machinery to Japan and 37.8 million euros ($54.7 million) to Germany.
The comparable China-to-U.S. data for 2010 was 34.2 million euros ($49.5 million), and the U.S.-to-China data was 98.4 million euros ($142.5 million).
Ulrich Reifenhäuser, the association's president and managing director of Reifenhäuser GmbH & Co. KG in Troisforf, Germany, expressed concern, however.
“What happens if Chinese processors do not have such strong demand as now? There could be efforts then by Chinese machinery producers to fill production capacity. With the Chinese already selling in the world market, it could be dramatic,” he said.
For now, however, Reifenhäuser remains relaxed, “as although Chinese machines cost some 15-20 percent less than German ones, they generally have lower quality and are less reliable.”
Looking in more depth at sales of German-made machinery, VDMA said the U.S. market retains second place for German machinery producers, with sales of 228 million euros ($330.2 million). But India has replaced Russia in third place.
French and Italian markets were almost level, pegging in fifth and sixth positions.
Turkey made a big leap, however, from No. 17 to No. 7, as did Brazil, jumping from No. 16 to No. 8. Poland and Mexico were close together at No. 9 and No. 10, respectively, each with around 95 million euros ($137.6 million).
Strongest growth in production value by type of machinery was taken by injection molding machines, up 57 percent in 2010 to a value of 638 million euros ($924 million), with the sector exporting 93 percent of overall production value.
Blow molding machines did next-best, with 35.4 percent growth to 373 million euros ($540.2 million). Extrusion machinery did slightly less well, with production value up 30.9 percent to 912 million euros ($1.32 billion).
Thermoforming machinery accounted for 155 million euros ($224.5 million), up 30 percent.
Commenting on the data, Reifenhäuser referred to recovery having taken place on a broad front, while also reaching customers in Western Europe and the U.S. Having shown the ability to handle strong fluctuations in the economy and thereby having reached an average of 88 percent capacity utilization, German plastics and rubber machinery producers are now investing in production expansion, he added.
Despite the good results and continuing growth forecast, Reifenhäuser said there is concern about vulnerability to crises in financial markets and short-term fluctuation in the value of the euro, as well as uncertainty about its long-term direction.
He added, however, “It is good we have the southern European eurozone countries with debt problems, as it means an exchange-rate benefit, ensuring that German machinery remains competitive.”
Increasing energy and raw material costs are also of concern, as they have direct production cost effects on machinery producers and indirectly influence the ability of plastics processing customers to invest in machinery by depressing profit margins and thereby cutting potential return on investment.
Dietmar Straub, chairman of Munich-based KraussMaffei AG, confirmed, “We will see price increases and delivery times will lengthen. This is not pleasant for our customers, but to be expected.
“The price of rolled steel is increasing. We have a lot of steel in our machines, so it has to lead to higher prices.”
Peter Steinbeck, joint managing director at Lengerich, Germany-based blown film machinery producer Windm"ller & H"lscher KG, commented on the effects of the Fukushima nuclear crisis in Japan. Steinbeck said there has been no sign of electronic equipment shortages and that W&H even has a customer in the Fukushima district that has started producing again.
On the other hand, KraussMaffei's Straub said, “Some people are buying electronic equipment in Europe instead of Japan, and that affects supply.”
Steinbeck also advised that although food and hygiene markets for film had held up well, they have been hampered by the lack of investment during the financial crisis.
An executive at Siegsdorf, Germany-based Brückner Maschinenbau GmbH & Co. KG said machinery demand for packaging applications has been particularly good in India and China. Michael Baumeister, chief operating officer of technology and logistics at the oriented-film machinery producer, added however that there is also strong interest in equipment needed to produce backing sheets for photovoltaic-panel applications, as well as film for optical applications.