New tech boosts sales for extruder manufacturers

Officials from extruder manufacturers say business is still hot in packaging, prompting sales of film and sheet machines. A stronger new-home construction market — if it continues — should boost extrusion lines for rigid plastic like vinyl windows, siding and pipe.

It was a major year for business news. The biggest story came Sept. 4 when Davis-Standard LLC announced that it bought Gloucester Engineering Co., the film equipment maker. Officials eventually plan to move production from Gloucester, Mass., to Davis-Standard headquarters in Pawcatuck, Conn.

In another development, Graham Engineering Corp. said it was closing the American Kuhne factory in Ashaway, R.I., and moving its extrusion system production to Graham's headquarters plant in York, Pa.

Machines from the companies in those deals make packaging film and medical tubing and other products — growing areas.

Building products are growing too, but more slowly, machinery executives said.

Single-family housing starts ran at a seasonally adjusted rate of 740,000 a year in September — up 6.3 percent from the same period the year before, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

And remodeling remains solid. The National Association of Home Builders reported in late October that its Remodeling Market Index has been above 50 — the key break-even point — for 10 straight quarters. “The increased backlog of remodeling jobs highlights the continuing labor shortages that hinder production, especially of large additions and alterations, and it make it difficult to complete projects in a timely manner,” said NAHB Chief Economist David Crowe.

Although home construction is growing, some sectors, such as PVC pipe and profile building products, still have lots of available machines, said Paul Caprio, president of KraussMaffei Corp. in Florence, Ky.

“I still think that, unfortunately, the market still has so much capacity from back when we were doing 1.5 million homes a year,” Caprio said. So he said that extrusion processors have not been ordering many new machines for rigid building products, although they did invest in parts to rejuvenate lines that were down.

“But the good news is everything is coming up. So 2016 should see an increase,” Caprio said.

Ron Krisanda, chief operating officer at Milacron Holdings Corp., said most of the company's new extruders sold this year were replacement machines offering new technology. For existing machines, Milacron has gained sales for aftermarket business — such as screws, barrels and gearboxes.

And Milacron is getting into sheet extrusion lines, a new market, Krisanda said. The Blue Ash, Ohio-based company sold four sheet machines, he said in a November interview.

Graham Engineering's American Kuhne business has gained market share this year, according to Gina Haines, vice president and chief marketing officer at Graham. “The bright spot for the healthy segments for us has been sheet, OEMs, medical, profile and wire and cable,” she said, discussing the North American market.

“We've actually seen good growth in the pipeline here in the second half of the year. So we're hopeful that's indicative of a solid year in 2016,” Haines said.

But the overall extrusion sector, in non-packaging related applications, gave up strong gains in the first quarter of 2015 to remain soft for much of the year, she said.

Uway Extrusion LLC started building extruders this year at its factory in Warren, Ohio. Uway runs two plants in China that make single-screw and twin-screw extruders; the extruders sold in the United States have about 25 percent Chinese content, but many U.S.-sourced parts, such as screws, barrels, dies and chill rolls.

Co-founder Dustin Kremer said growing markets for Uway include automotive, and sheet lines for thermoforming of industrial parts and packaging. The company also does PVC lines for construction products. “People are starting to invest in twin-screw PVC more heavily,” Kremer said.

Sheet for packaging and automotive also are strong areas for Processing Technologies International LLC, President Dana Hanson said. “We're in record territory. We're breaking revenue volume records,” he said.

That means PTi needs to expand — and Hanson announced the company next year will build a 40,000-square-foot addition to its headquarters in Aurora, Ill. Currently PTi has 60,000 square feet. He said one of the highlights will be a technology development center, housing up to three processing lines for running customer trials, at production volumes.

PTi plans to break ground next spring and hopes the addition will be completed by early next fall, he said.

Packaging is still a major PTi business, for sheet lines. The company has sold 17 dryerless PET sheet lines, Hanson said. But business in 2015 spread out to include automotive for interior and exterior components and for trucks, running boards, mud-flaps, air dams and aerodynamic parts.

“We had a record backlog coming into 2015, and this year we're looking to increasing that going into 2016 by 30 percent,” Hanson said.

Davis-Standard LLC already generated about half of its business from packaging, but the extruder-maker boosted that significantly by purchasing Gloucester Engineering, the maker of blown and cast film lines. DS President and CEO Jim Murphy said packaging accounts for about three-quarters of Gloucester's business.

Murphy said Davis-Standard has seen good improvement in 2015, over 2014, and should show about 15 percent growth for the year. North America has been the strongest geographic market, he said.

“We have seen a very strong improvement in packaging, specifically around some high-barrier applications for food,” Murphy said. He reported that the Davis-Standard's integration with Gloucester Engineering has gone smoothly, as the company is taking orders, shipping film lines and working on new technology.

Film market

Packaging, especially the barrier-film type, continues to be a growth market for new extrusion machinery, and upgrades to existing lines.

“We think the outlook is very promising for the industry as a whole, and the machinery sector as a whole,” said David Nunes, president of Hosokawa Alpine American Inc. in Natick, Mass.

Nunes said “business continues to be very robust,” because of a combination of consumer demographics and a population of aging machinery that needs upgrading. Flexible packaging continues to grow, including standup pouches, in laminated structures that require film. And Nunes said industry is trying to reduce corrugated boxes for shipping products — making collation film the go-to method.

Nunes said Alpine American emphasizes its after-sales service, a key factor in the decision of which brand name of film machinery to purchase.

Blown film machinery leaders say the trend of five-layer lines, instead of three layers, keeps going strong. Gary Hughes said more layers can save money, by burying lower-priced material inside the structure — and to make more specific sheet for the application, by allowing packaging with different properties on the inside, touching the food, then the outside, facing consumers.

“The tool of more barriers, different resins, working in combination is valuable,” said Hughes, president and CEO of Brampton Engineering Inc. in Brampton, Ontario.

Hughes also said barrier film plays a key role in pouches, giving longer shelf life to grocery foods.

“Pouches are growing at a compounded annual growth rate twice that of the aggregate of packaging,” he said. “So that means pouches are eating somebody's lunch,” he said. That somebody includes blow molded plastic packaging, metal cans and glass.

Reifenhauser Inc., and its sister company Reiloy USA, moved into a new 55,000-square-foot plant in Maize, Kan., near Wichita, in July. “Business has been fantastic,” said Reifenhauser President Steve DeSpain. “We've had our best year ever,” he said.

The U.S. unit of the German maker of blown film and sheet extrusion equipment hired two service people and added another salesman.

DeSpain said the five-layer instead of three-layer move “is still a big trend. There's definitely the companies that have bought into it, swear by it.”

DeSpain added that Reifenhauser's sheet lines have sold well this year, especially for thermoforming of food containers like PET trays, egg cartons and clamshells. He said pouch makers are going to five-layer film. And plastic will play a key role in the search for pouch packaging that is 100 percent recyclable, he added.

Windmoeller & Hoelscher Corp. President Andrew Wheeler said the strong dollar caused sales to dip a little in 2015. The company in Lincoln, R.I., is part of the WH Group in Lengerich, Germany. But he said the U.S.-based business was “very good. We've had a strong year again. Just about as strong as last year.”

Order intake was the strongest ever, Wheeler said.

W&H makes blown film lines and printing presses. Wheeler said those major investments need to run to make money — so W&H has been working on technology like Turboclean, an automatic purging system for its Varex II blown film lines. Wheeler said Turboclean does a complete resin change of the entire system, including draining hoppers, clean out resin lines and purging.

The complexity of a resin change on blown film increases as the number of layers increases. So does the time it takes.

“For three-layer products, it's not as big a deal, but if you can, imagine a nine-layer structure with 30 components blended in,” Wheeler said. He said very good operators can do that in 30 minutes, but most would take over an hour. Turboclean reduces purging to a few minutes. The operator sets up the next materials to run as the old job finishes, then a push of a button starts up the new job.

W&H premiered Turboclean at a two-day expo in Lengerich in June.

That type of innovation is a way to set W&H apart, Wheeler said, as players in the film equipment industry have fine-tuned their machinery to a high level. Downtime can make the difference between making money losing money, Wheeler said. “We wanted to look to eliminate the typical inefficiencies of the workplace,” he said.