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December 10, 2018 01:00 AM

Compounding extruder market remains steady

Bill Bregar
Senior Staff Reporter
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    Joe Wilssens
    Kirk Hanawalt shows the Entek QC3 33MM Twin-Screw Extruder at NPE2018.

    Steady business drove the U.S. market for compounding extruders in 2018, machinery officials said, now that big cyclical ups and downs are a thing of the past.

    "The last five years have been pretty consistent," said Charlie Martin, president and general manager of Leistritz Extrusion in Somerville, N.J.

    A slowing automotive sector is giving some compounding extruder makers pause going into the new year. But the sector is diversified enough that the general outlook is positive, machinery officials said.

    Bob Urtel said automotive is an important market for Century Extrusion in Traverse City, Mich. The company also has some projects in the housing sector. Powder coatings is a strong market. And machines sold to general compounding have held up, he said.

    Urtel, the company president, said Century Extrusion had predicted big growth in 2018 and ended up beating its budget by 11 percent. He said, "2018 was really a top year, and I think 2019 will hold pretty well with 2018."

    Turnkey sales "continues to have legs," Urtel said, "especially with the bigger players. Essentially they want to write a check and get pounds." On the smaller side, laboratory lines are grabbing customer interest, he said.

    "People are spending money on their production capacity now and thinking about the future," Urtel said.

    Century Extrusion also launched a skilled trades program to foster the next generation of employees.

    Leistritz Extrusion serves automotive, but the company is shielded from an auto downturn, Martin said.

    "I think the key to our long-term success is we've diversified. We're in eight to 10 distinct markets, so one's up, the other might be down," he said.

    One area of strength is direct extrusion for pharmaceuticals, after years of effort by Leistritz to hold educational sessions in Somerville.

    "That's now a recognized and embraced technology," Martin said.

    But the market for compounding machines to make filaments and pellets for 3D printing has slowed down, he said.

    Overall, Martin said, business has been "slow and steady" in 2018.

    Steady seems to be the buzzword of the year for the U.S. market, according to executives at several compounding extruder manufacturers.

    "Last year, 2017, was a very good year for us. I would say there's been no big ups and downs [this year]. I think the last five years have been pretty steady," said Mike Millsaps, chief operations officer at Steer America Inc. in Uniontown, Ohio.

    For Steer America, strong markets right now include composites and bioresins.

    "We're seeing dividends pay off for low-shear, low-temperature," machines that Steer specializes in, Millsaps said. "I've also see a lot of interest in fluoropolymer lines."

    Linda Campbell, director of sales at Entek Manufacturing, said the company in Lebanon, Ore., "had a great year last year, and this year was another good year."

    Campbell said 2018 had no dips in sales.

    "I've not seen huge amounts of growth, but we certainly have not receded at all," she said.

    But she said the business mix has changed for Entek, from a lot of quick-change, smaller-batch extruders in 2017 to big machines.

    "What was nice about this year is we had a lot more of our larger units in our sales cycle. Everything from the 53 millimeter and above seemed to be popular, including 103 millimeter, which is one of our most popular models," Campbell said.

    She said packaging is Entek's strongest market right now.

    Skilled worker help needed

    The skilled worker crunch for all manufacturing also hits home for companies that build compounding extruders.

    NFM Welding Engineers Inc. started its tool and die apprenticeship program in 1981, back when the company was a small machine shop, and NFM has kept it going all this time, said Paul Roberson, president of the company in Massillon, Ohio.

    "Employees are difficult to find," he said. "It's a different culture in terms of working a job anymore. People change jobs very frequently, and it's a different work ethic."

    Roberson is seeing a trend where companies are upgrading equipment and trying to increase capacity at existing plants, more so than new projects.

    "We're always loaded. Our backlog is always pretty solid, and we have a lot of projects," Roberson said. He said the strong U.S. manufacturing environment has stretched lead times out for equipment suppliers.

    "I also think that over the last 10 years, there was quite a few businesses that didn't make it through the economic crisis, and I think it's probably a little ​ harder for businesses to get started these days than it was 20-30 years ago," Roberson said, in part because of increased government regulations.

    Coperion is winning orders for compounding extruders in large polyolefin production lines, according to Joe Raver, CEO of the extruder maker's publicly held parent company, Hillenbrand Inc. Raver made the comment in Hillenbrand's fourth-quarter conference call Nov. 14. He said that Coperion's large backlog "reflects confidence that I think the overall need for plastics and activity will continue to increase over the next several years."

    Raven said Hillenbrand will continue to look for strategic acquisitions to strengthen its plastics-related equipment and the food and pharmaceutical markets.

    Farrel Pomini got inducted into the American Manufacturing Hall of Fame this year, reflecting its deep roots that began in 1848. Paul Lloyd, business unit director, said U.S. compounders are driving strong growth for the company.

    Strong markets include packaging and compounding of flame-retardant materials for construction. "We're also seeing a lot of growth and potential in the flooring market," Lloyd said.

    Globally, Lloyd said, Farrel Pomini thinks ongoing U.S.-China trade conflicts could cause some business reduction in China.

    "However, we are fully expecting increased demand in the U.S. to pick up the slack and to deliver growth for next year," he said.

    The year was marked by some compounding industry consolidation, such as LyondellBasell's purchase of A. Schulman Inc. to create what officials claim is the world's largest compounding business. Other mergers and acquisition activity included Celanese Corp. buying Omni Plastics LLC, Israeli materials firm Kafrit Industries Ltd. picking up masterbatch concentrates maker Polyfil Corp. and private equity firm ArsenalCapital Partners acquiring specialty polymers maker Polytek Development Corp. Arsenal then used its Carolina Color unit to buy color house Chroma Corp. In global news, PolyOne Corp. bought IQAP Masterbatch Group SL in Europe.

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