U.S. sales of blow molding machines remained solid in 2012, as company officials report continued investment in packaging machines and — thanks to a bright automotive picture and some new, innovative applications — steady business in accumulator-head machines.
Gary Carr, national sales director of Bekum America Corp., said packaging makers no longer buy machines before they seek new business. There's no more, “if we buy machines, orders will come.”
“People aren't speculating a lot right now, at least in the blow molding community. If they've got a firm contract, with committed volumes, with good utilization on that asset, they're buying equipment,” Carr said in an interview. A varied customer base and diverse market segments help Williamston, Mich.-based Bekum, he said.
Carr reports Bekum had a good 2012, with steady orders.
“Even though the economy remains somewhat questionable, our plant has been busy the entire year,” he said. “And as a machine builder, what's been really nice is, the orders have come dispersed throughout the business year.
“As a machinery builder … it can be a feast- [or] famine-type business cycle. So work flow has been particularly steady this year, which is a big break.”
In some ways, plastics packaging has been a victim of its own success. In the U.S. market, most of the big conversions of glass to plastic or metal to plastic have already happened. That leaves blow molders trying to steal market share away from each other — a big topic of conversation at this year's Society of Plastics Engineers' Blow Molding Conference in Pittsburgh, where industry leaders encouraged new packaging development to keep plastics growing.
Conversion opportunities for PET are still there for hot-fill products such as pasta sauce, salsa, pickles and jelly, said Jamie Pace, vice president and general manager for Nissei ASB Co. in Atlanta.
PRW, a European sister newspaper to Plastics News, selected a wide-mouth, hot-fill PET jar for food, molded by Artenius PET Packaging Europe, for its Best Business Initiative of the Year award. The Japanese parent company, Nissei ASB Machine Co. Ltd., was the strategic partner with APPE.
“That's been a very large area of focus for ASB and our development,” Pace said.
Customer convenience also drives new packaging.
Carolyn Reed of R&B Plastics Machinery LLC noted the changes in bag lunches kids take to school.
“Just look at any grocery store, at all the single-serving containers. Now everybody has their own little separate thing — apple sauce, fruit, pudding, Pringles. All that stuff never even used to exist,” she said. ”These are new foods that have become very popular.”
Hot-fill also is fueling demand at Aoki Laboratory America Inc., said Charles O'Connell, sales representative of the company in Elk Grove Village, Ill. “Customers are looking to increase productivity and efficiency,” he said.
Side SA, a Spanish maker of linear stretch reheat blow molding machines, introduced a PET bottle with an integrated handle, called the T-Handle. “This is a single-stage. It's done within the mold,” said Scott Thompson, general manager of Stretch Blow Systems LLC in Fort Myers, Fla.
SBS was started a year ago by systems engineering company R.T. Kutz Co. Inc. Thompson is working to sign up manufacturers' representatives, as the company is a new player in the U.S. market. He said the PET handleware machine is gaining attention.
“I'm not going to sugarcoat it. We haven't sold any new machines yet, since we got started,” he said. “We are working on a number of new projects, so I would say the quoting activity is up significantly as a result of direct sales calls and contacts that I developed over the years.”
Krones Inc. of Franklin, Wis., also is driving innovation. At NPE2012, Krones showed the latest generation of its Contiform PET stretch blow molding machine, the C312. The German parent company has sold 20 C3s in the U.S. market since it was commercialized in late 2011, said David Raabe, director of blow molding technology for the U.S. operation. “There are a lot of added-value features that the platform offers: lower maintenance, higher output, lower energy and lower total cost of running that equipment,” Raabe said.
The majority of Krones blow molding system sales in the United States this year went to new production capacity, Raabe said. The trend to self-manufacturing continues, where the food or beverage producer brings blow molding in-house, he said. That dramatically cuts transportation costs.
“There's something about controlling your logistics there, going greener, just economics,” he said. “Today it's all about going greener. And the technology has really gotten to a new level of being more cost-effective, more economical, user friendly and just overall having a better [total cost of ownership] calculation for the long term and short term.”
Steady as she goes
“The extrusion blow molding market has been mature here for awhile. There does seem to be some conversion [of polyethylene containers], but not at the pace that the PET conversions are taking place,” said Dave Yenor, vice president of global business development for Graham Engineering Corp. in York, Pa.
Customers are interested in reducing packaging weight, boosting productivity and incorporating a layer of post-consumer plastics inside a three-layer structure.
“In packaging, this year is going to end up being a very good year for us,” Yenor said. “The activity seems like it slowed a little bit coming into the election, and the fiscal cliff. The European situation has given some pause, but now that the election is over, we'll start to see people get back to more business as usual.”
Kautex Machines Inc. had a “tremendous” year for its specialty market: multilayer machines to blow mold automotive fuel tanks, said Bill Farrant, president and CEO of the company in North Branch, N.J.
Kautex is shipping two multilayer machines to Agri-Industrial Plastics Co. in Fairfield, Iowa, for molding small fuel tanks for lawn and garden equipment, snowmobiles and other non-automotive uses. But Farrant said small-tank demand has been largely filled.
So Kautex is looking at new markets. At the SPE conference in Pittsburgh, Kautex detailed machines sold to lawn and garden products maker Suncast Corp. that can spread out the parison, so the press can blow mold flat panels. Farrant said Kautex officials want to market the technology to new applications — for example, large, flat panels, with insulation, for trucks and buses.
Suncast sheds and outdoor deck boxes are examples of brand-new categories that can fuel demand for accumulator-head extrusion blow molding machines. After years of stagnation, accumulator-head machines have started to recover, industry executives said.
“That's steady,” Yenor said. “It came back a little bit after the 2009 recession, and it's still steady. Certainly, the increase in capacity in the automotive industry is lifting that whole marketplace.”
Robert Jackson did some research and found that the U.S. market for accumulator-head machines has held steady at an average of 60 presses a year since 2000, not counting the recessionary years of 2008 and 2009.
But the mix has changed from new machines to mostly used. That number also includes blow molders getting their existing machines rebuilt, he said. “The unit count is still more or less the same. It's just switched from new to used, due to the extremely high cost of new,” said Jackson, president of Jackson Machinery Inc. in Port Washington, Wis.
As of late November, fewer than 10 new accumulator-head machines had been sold in the United States in 2012, Jackson said. He said the high was 125 new machines in 2000.
Can the market for new accumulator-head machines return to health? Jackson said it's a chicken-and-egg scenario. Machinery makers need to sell more brand-new machines to bring the cost down, but the high price of new machines drives customers to used and rebuilt equipment.
Obama vs. Romney
Bekum's Carr, and Pace of Nissei ASB, both said orders seemed to slow down around September, as the election heated up. Pace said Nissei ASB's usual pattern of a slowdown in the summer months, then a pickup in the fall, got reversed in 2012.
“The midyear slowdown didn't happen. But instead, that slowdown happened at a later time, from September until now,” he said after the election.
Carr said customers mentioned the election.
“In our discussion with business owners, senior management, this election did play on their minds, that uncertainty of a hotly contested presidential campaign, more than a typical election. This time, we sense that people delayed decisions, or even postponed them.”
As for 2013, Carr is predicting a good year. “But significant growth will really depend on consumer confidence, business confidence and just an uptick in the economy.”