A strong economy means strong demand for plastics machinery these days, according to KraussMaffei Corp.'s president.
Paul Caprio took some time during a recent open house at the company's headquarters in Florence, Ky., near Cincinnati, to talk about KraussMaffei Corp., which is a subsidiary of KraussMaffei Group based in Munich. Caprio's unit is responsible for operations the United States and Canada.
Q: What's your view of the health of the machinery industry these days?
Caprio: It's still at an all-time high. If people aren't making money now, then something is wrong. It's very robust. I don't think there's been a year since the downturn that we haven't grown. And we are just pushing the limits. We're the only ones holding ourselves back from even further growth. And we're taking steps to get more productive and open more facilities and add equipment internally. The company is investing pretty heavily globally to meet the demand. It's super healthy.
Q: And for KraussMaffei Group in particular?
Caprio: Automotive has been a tremendous push, from the vehicle demands and all the changes that are common. But also the fact that the automotive guys are making money.
They are actually investing in getting the [machinery] fleets younger. Getting rid of 30-year-old machines or older. We haven't seen that really in a long, long time. A lot of companies are updating their fleets. That's on one side. The other is just strictly demand. After the downturn, there were a number of suppliers that weren't around, both on the machinery side and the processor side. There is a resurgence of products coming back to the states. Walmart definitely has a published intent to do more manufacturing in America or near shoring. And I think that has had impact, without question. Positive impact. And those people need equipment to handle the volumes. Or to compete with the Chinese they need to have state-of-the art equipment.
Q: What are the factors impacting the industry in 2017?
Caprio: This will be another record year off of last year. And that was a record year from the year before and so on, all the way back [to the Great Recession]. And I anticipate that that trend continues. We will slow down when the market slows down. We are one of the first line of fire when things stop moving. It's very, very healthy. Very healthy.
Q: And how do you see 2018 shaping up?
Caprio: Our plan is to grow. The forecasts are in from internal planning, and it's to do more than we did the previous year. And that is every year that we make that plan. But only the market can make that happen. With lead times of a half a year or more in particular on the big machines, we know what we are going to ship next year already through June. So sales won't be the problem next year at all. We just have to make sure the next six months of orders are at the same level or better than today and that will determine next year.
But speaking to the customers, there's more products. It's just everyone [making] more, more, more. I would say it's not as frantic as it was one year ago with the automotive guys needing so much so fast, but it's picked up in other markets.
Q: What are the potential growth markets for your portion of the machinery business?
Caprio: It continues with automotive. Packaging is definitely a strong sector. Medical is always very constant, the needs are there, just small equipment it tends to be. For the balance of the business, it's the appliance industry, it's oil and gas, it's the extrusion business because of the housing market. It's all positive. All positive.
Q: Is there a regional aspect to this for you as well?
Caprio: Nope. In America, it really runs from east to west, north to south. There's such a hotbed off of I-75 from Michigan down to Alabama that is so strong on the manufacturing. On the West Coast, it's more the medical and specialty type business. It's just healthy across the board.