The 2017 story line for compounding extruders sounds like a broken record: another in a string of growth years that kicked off after the Great Recession.
The business of compounding extruders — big-ticket machines that can pump out huge amounts of material — used to be highly cyclical, with a good year followed by an off year, in a seesaw fashion. But that seems to be over, according to machinery executives. Now, several machinery makers are adding metalworking and production capacity and hiring. Farrel Pomini, for example, opened a 60,000-square-foot headquarters plant on a hill overlooking the company's hulking old mill complex in downtown Ansonia, Conn.
“The compounding market is pretty stable over the last couple of years,” said Matt Sieverding, president of extrusion technology for KraussMaffei Group in Munich, which includes Berstorff compounding extruders. The U.S. operation is in Florence, Ky.
“Since 2010, it's been pretty steady. The last seven years have been good business for everybody,” said Mike Millsaps, chief operations officer at Steer America Inc. in Uniontown, Ohio.
Millsaps said demand is strong for compounding lines to make engineering resins and color masterbatch. The U.S. economy is solid, and the recovery from natural disasters such as Hurricane Harvey will end up helping the economy in sales of cars, appliances and houses destroyed by the flooding in Houston, he said.
Millsaps and several other executives said capital investments are moving forward with the promise of the Trump administration's tax reform.
“They're spending money. They think there's going to be tax cuts,” he said.
Paul Roberson, president of NFM Welding Engineers Inc., agreed that tax reform sends a powerful message to manufacturing.
“What it means is that there's a commitment to bring industry to the U.S. And just knowing that commitment's here for employers, they know they're not the enemy anymore,” he said.
Roberson said the overall U.S. compounding line market has been “fairly steady” the past four or five years, with enough business to go around. But this year, his company in Massillon, Ohio, is “blowing the doors off,” selling lots of equipment. And the backlog is full.
“We're just booking stuff left and right,” Roberson said. “We've already done some expansion in terms of our manufacturing capacity. We're starting to stretch deliveries out now. We're going to be solid through all next year.” Business is diversified, including an upsurge in automotive compounding activity, he said.
NFM Welding Engineers can do turnkey systems, all the way from rail car unloaders to compounding extruders.
Bob Urtel said rapid growth by compounders, sometimes at several different locations at the same time, makes it even more important for machinery makers to coordinate turnkey installations.
“They want to expand faster than their in-house resources can handle, so they're coming to the integrators — like us,” said Urtel, president of Century Extrusion in Traverse City, Mich. “You've got to like the scope of some of the expansions that our customers are planning and funding right now. It's not just a single machine, but it's multiple lines that are being added, going to different locations. It's really broad-based.”
Visitors to Century Extrusion's booth at NPE2018 will see a RingExtruder with 12 screws. Early this year, Century's parent company, CPM Extrusion Group, bought the German company that developed the innovative machine, Extricom GmbH, after working with the company for years.
Linda Campbell, director of sales at Entek Manufacturing, said new compounding is coming on stream in the United States. “This year has been just incredibly busy in full-system projects,” she said. Entek is based in Lebanon, Ore.
Campbell expects Entek's sales will increase 5 to 10 percent in 2018.
“From what our customers are saying, they're all feeling very positive about next year. Their machine utilization numbers are very high, so we look forward to some expansion,” she said. “I think it's going be another good year next year.”
Paul Martin, vice president of Japan Steel Works America Inc in Farmington Hills, Mich., said JSW has won sales with both Japanese and American automotive compounders.
“For us, the business is staying very steady and very strong,” Martin said. “We haven't seen any dip over the last two or three years. We're still extremely happy.”
Coperion Corp. is getting business from polyolefins, thanks to the U.S. shale gas drilling sector, according to the extruder maker's parent, Hillenbrand Inc. Engineering resins also boosted sales, Hillenbrand CEO Joe Raver said in a fourth-quarter conference call Nov. 17. The company's fiscal year ended Sept. 30.
Hillenbrand also wants to grow its compounding and K-Tron feeders business in food and pharmaceuticals.
Coperion is based in Wytheville, Va.
Given the relatively long lead times for compounding extrusion lines, industry officials have a good read on 2018; and beyond.
“Barring unforeseen circumstances, I think business is going to remain strong for the next few years,” said Steer America's Mike Millsaps.