In 1990, the year after Plastics News published our first issue, there were 33,000 injection molding machines sold worldwide.
Fast forward to 2013, and the global market was 86,500 molding machines, or a jump of 250 percent.
Some of that big increase reflects more use of plastics — think how much more PET is used in soda and water bottles now vs. then, or how much more plastic is in our cars now vs. the late 1980s.
But by some key measures, the biggest reason for the industry's great leap forward can be traced to the rise of manufacturing in Asia — initially China and other Asian spots becoming world factories, and now the growth of a consumer class in the “BRICS” emerging markets.
Here's the key fact: of the 53,000 additional molding machines sold annually around the world now vs. a quarter century ago, about 90 percent of them (or 48,000 injection presses), are sold in the emerging markets of Asia.
As part of our 25th anniversary issue, Plastics News wanted to take a look at what globalization has meant for the industry.
China drives growth.
The simplest answer, as those figures suggest, is that it's meant growth. Worldwide, the plastics industry is three times larger than it was 25 years ago. In 2012, the world used 288 million metric tons of resin, compared with 100 million metric tons in 1989.
That's a lot faster than global population growth, which was up “only” 40 percent in the last 25 years, from 5.2 billion people to 7.2 billion.
But just saying globalization equals growth only tells half the story. Peel back the numbers and they document the huge shift of manufacturing to Asia.
China absorbed the lion's share. Its annual consumption of injection molding machines rose from 4,000 a year in 1990 to 42,000 in 2013, half the global total.
The rest of Asia (including Japan, India and Southeast Asia) rose from a market of 11,500 machines a year to 21,500 in the same period.
These figures for injection molding machine consumption come from Austria's Engel Holding GmbH, the world's largest maker of molding machines, measured by revenue. Plastics News is focusing on the figures because injection presses are the largest segment of the plastics equipment market.
For some of the small and medium-sized plastics processing factories in the United States, the emergence of Asia has been very disruptive, said Mike Walter, president of the Manufacturers Association for Plastics Processors, an Indianapolis-based trade association that represents many SME plastics processors.
“Initially globalization meant the erosion of our customer base,” said Walter, who is also president of injection molder MET Plastics Inc. in Elk Grove Village, Ill. “That instilled a lot of fear and panic in the industry.
“Speaking as a smaller manufacturer with a single facility in the United States, we saw our customer base move offshore,” he said.
But that view is changing somewhat, he said, as costs rise sharply in China and other Asian economies, and the companies that have survived in the United States have been forced to hone their competitive skills and invest more in automation and technology.
Walter's small molding and tooling factory outside Chicago, for example, has seen sales per employee rise more than 20 percent since 2008, as the company has seen sales grow in the last five years as the number of employees has dropped 20 percent.
“Domestic manufacturing in the U.S. is now a more attractive opportunity,” he said.
Europe, Americas market stable