Most compounding extruder executives say the U.S. is holding up — and it's been fairly broad-based, even including some recycling lines. Automotive business remains solid.
The year 2016 was marked by acquisitions among compounders. Americhem Inc. bought V-Chem Corp. Teknor Apex Co. picked up PTS GmbH. Ravago Group bought Industrial Resin Recycling Inc.
Machinery companies that supply complete systems, not just the extruder, are seeing strong demand.
Linda Campbell, director of sales at Entek Manufacturing in Lebanon, Ore., said the company did not sell as many units as officials wanted, but Entek sold many complete systems.
“Business this year's been great, especially with our turnkey projects, so we've had a lot of large projects. That exceeded our goals at least for the year,” Campbell said.
KraussMaffei Berstorff also continues to get orders for general compounding lines, said Paul Caprio, president of KraussMaffei Corp. in Florence, Ky.
“We are also seeing the need to sell complete lines versus just extruders, and this trend has been going on for some time now,” he said. “The customers do not seem to have the capacity to handle the downstream equipment and prefer to give the entire system business to the supply chain, which is an advantage for companies like KM that can do all the engineering for the complete line business.”
The recycling business has been hit by lower prices for virgin resin. But there is some life.
At K 2016, KraussMaffei Berstorff announced it is teaming up with Erema Engineering Recycling und Anlagen GmbH. Erema will supply recycling systems for Berstorff's re-compounding technology.
In late November, Bob Urtel said Century Extrusion in Traverse City, Mich., has one compounding extruder for recycling in production and one on backlog for 2017.
“Recycling's not a big area, but there's some business,” he said.
Urtel, who is Century's president, echoed other compounding extruder officials about turnkey lines.
“We have a good backlog of machines going into 2017. Our quoting pipeline is solid,” he said. “We're doing expanded scope, which is something that we refer to as integrating feeders and downstream equipment into a line. That continues to be important to us and we're getting more of that now. Customers are more interested in single sourcing now. That's becoming a bigger part of our business.”
The U.S. compounding extruder market used to be cyclical, one year up, one year down. But the days of feast or famine seem to be over ... at least for now.
“That's true for us,” Urtel said. “Our revenue since the recession has been very, very steady. No busts and booms since we came ripping out of the recession. It's been steady and growing.”
Steer America Inc. in Uniontown, Ohio, had its best year ever in the fiscal year that ended in March, and the company is on target to match that, said Mike Millsaps, chief operations officer.
“We're seeing a lot of success with the biopolymers,” Millsaps said. “Engineering resins compounding is good. Color compounding is still good. But for us, the biggest increase is the biopolymers.”
Eberhard Dieterich, business unit manager at Coperion Corp., said the company is seeing a mix of projects, including greenfield plants driven by global customers that have operations in the United States. “What we're seeing is there's still quite a lot of activity,” he said.
Dustin Kremer, sales engineer at Uway Extrusion LLC, was bit downbeat about the U.S. market in 2016. “What I'm seeing overall is equipment was down this year,” he said.
Kremer thinks the compounding consolidation demonstrates an industry he said is weakened by a combination of the nasty U.S. presidential election and low material prices.
“Normally, that indicates that you're not seeing a lot of growth in the market. The larger companies will buy up competitors,” he said.
Kremer is optimistic for 2017 as German automakers continue to add production in the Carolinas and Mexico.
Uway is based in Warren, Ohio.
The compounding machinery industry — as well as compounders themselves — are running “stable, at a decent level,” said Paul Roberson, president of NFM Welding Engineers Inc. in Massillon, Ohio.
The Great Recession weeded out weaker, highly leveraged companies.
“The people doing OK or who had special technologies or the proper financial structure, they survived. I would not say that anybody thrived,” he said.
As an Ohio guy, Roberson wants to see new polyolefin crackers begin cranking up, to take advantage of the region's strength in hydraulic fracturing, known as fracking. He's still waiting.
“When that much polymer production comes online in the U.S., then the prices are going to drop, and I would predict, to the lowest in the world,” Roberson said.