Machinery execs: Sales could top 4,000 units again

Naples, Fla. — Top executives of four injection molding press manufacturers discussed the North American machinery market, the global economy, how to attract young people, and whether the important U.S. automotive industry is flattening out at the Executive Forum.

The five were: Paul Caprio, president of KraussMaffei Corp.; John Galt, CEO of Husky Injection Molding Systems Inc.; Tom Goeke, president and CEO of Milacron LLC; Friedrich Kanz, president of Arburg Inc.; and Mark Sankovitch, president and CEO of Engel North America.

U.S. shipments of injection molding machines topped the 4,000 mark in 2015. The panel's moderator, Plastics News publisher Brennan Lafferty, asked the machinery mavens if that will continue this year. The robust automotive sector has been the powerhouse lifting much of the machinery sector, as automakers sold 17.5 million light vehicles last year.

“Four thousand machines last year wouldn't be possible without a strong automotive industry,” Kanz said.

Caprio thinks the U.S. market could again be about 4,000 units in 2016 — but he said automotive is not the only reason KraussMaffei's sales have been strong.

“We're very optimistic,” he said. “Automotive has been the main driver for the past couple of years, but we see other segments growing, too” such as packaging and logistics. “So it's just not because of one leg, of automotive,” Caprio said.

Caprio said automotive accounts for more than half of KraussMaffei's sales. But he pointed out that, during times between car model-year changes — the changes that spur much capital investment — other sectors can adopt the company's innovations. For example, he said the company showed the cube-mold SpinForm process first to automotive. But the large-screen television industry adopted it first.

“Everyone can benefit from cost savings” by using new technology, Caprio said. “Part of our job is to educate people in what is successful in one area and what can we do to translate that to other end markets.”

Sankovitch said car sales, naturally, can't continue to grow every year at this point in the cycle.

“The curve is bending and we're definitely not on the growth curve we've been in the past four years,” he said. And Sankovitch added that, in the overall U.S. economy, wages are finally starting to go up, although productivity gains have not kept pace. “Wage growth without improved productivity is not a good thing,” he said.

Goeke said Milacron's multilayer packaging systems, through the Kortec business, is driving conversions to plastic, from glass and metal cans.

Husky has focused on beverage packaging, personal care and medical markets, for its high-speed injection presses. Galt said those thin-wall parts are a big part of Husky's business, but he said company officials have noted a change that, although low-cost shoot-and-ship molding is still done, there is continued growth in performance packaging, sealing systems and closures.

How have mergers and acquisitions impacted machinery sales? The executives said it's a challenge building new relationships and seeing how it shakes out. Much of the M&A activity has centered on packaging, and Galt said that will continue. But he said Husky still relies on the small- to mid-sized processors to drive growth, new products and molding innovations.

Asked what future changes might come for the injection molding process, Galt pointed to melt delivery technologies.

“I think you're going to see a lot of advancements in that area,” he said. Galt also said the trend toward more flexible production will continue.

“I'm more excited about the next five or 10 years in terms of technology than I have been in my life,” said Galt, who is a 31-year Husky veteran.

Lafferty asked the machinery executives about reports the average age of an injection molding press is 15 years. Goeke said that, in addition to the big number of 4,000 new presses shipped in 2015, processors are investing in upgrading and refurbishing existing machines — a substantial investment. Galt echoed that.

Kanz, of Arburg, quipped, “From a sales point of view, our machines last way too long.” Even so, he said, some older machines are not as good for new molding jobs.

Finding and keeping young new workers is a critical problem facing the entire plastics industry, and injection press suppliers are no different. Goeke said Milacron has just expanded its apprenticeship program with UC Clermont, the University of Cincinnati's regional college, to add program for machinery assemblers at its factory in Batavia, Ohio, and for field service technicians.

All the executives mentioned the importance of service people, and the difficulty to find them, other than stealing then from each other. “We've got to start growing out own,” Goeke said.

Sankovitch said molders have reduced their technical staffs in the past 10 or 15 years. “And so it goes back to the machinery business. We have to be there for them,” he said. “The encouraging thing is we're seeing more companies spend on training than they have in the past.”