Engel optimistic despite clouds on the horizon

Schwertberg, Austria — Officials for machinery maker Engel Holding GmbH expect final sales numbers for 2018 will see the company surpass 2017 results, but they see slowing sales in 2019.

Christoph Steger, chief sales officer for the Schwertberg, Austria-based company said during a March 7 interview with Plastics News Europe said Engel will exceed 2017 results by several percent in 2018, adding, “it will be positive, but we see a significant degree of global weakening, although it varies from one industry to another.”

Global statistics show incoming orders for machinery producers significantly below 2018, but that has not been seen yet in delivery times, which are still as long as three to six months depending on machines sizes.

“My personal opinion is that we will settle down at around the 2015 volume — if there are no more bad omens. The present high tensions between the U.S. and China affect sentiment throughout the world, by leading to reluctance to make investments,” Steger said.

Additionally, Steger sees a potential source of further negative impacts to the world economy in the Middle East

“I am not only speaking about Iran with a Damocles sword hanging above it, more about potential proxy wars that could impact the global economic development,” he added.

The United Kingdom's pending exit from the European Union is yet another reason for uncertainty.

“Should one, must one, invest in the U.K.? Or withdraw from the U.K.? It can be compared with individual decisions everyone faces every day: Do I sell my house, buy a new car, or not, while the future is uncertain?”

By comparison, and despite the those uncertainties, the Central European countries of Germany, Austria and Switzerland (DACH) remain as before at a good level.

The U.S. has been doing well in recent years due to investment incentives such as tax reductions.

“But I am not sure how long it will continue," Steger said. "Every incentive has its peak. Anyhow, U.S. converters have to consider if they are really producing efficiently, as the installed machine park is still quite old on average, compared to other world regions.”

Industry 4.0, he noted, is a further driver for investments in the U.S., as its features productivity and efficiency increases.

China, as an economic motor for other countries will grow more slowly now, if forecasts for economic growth are correct, according to Steger.

“In this respect, a Chinese entrepreneur is just as cautious as a European one and will think twice before making a new investment at the moment,” he said.

On the other hand, the Southeast Asian region can profit from U.S./China trade conflicts, also due to some production being transferred from China.

“Overall, the situation is still more like a cooling flame than a fire," Steger said.

In South America, according to Steger, hopes are high that the new Brazilian president will have positive impact on the region's largest economy.

While development is good in Colombia and Chile, Argentina still seems to be grappling with difficulties

And as regards Venezuela, “it is almost tragic to see that one of the oil-richest countries in the world has not managed to make a turnaround and utilize this resource to develop the economy.”

Russia is at a good business level, even with challenges in relationships between the EU and Russia.

"But I believe in Russia and its economy and therefore Engel will continue its strong presence in Russia,” Steger said.

“As I said at Fakuma 2018, markets are no longer growing. One thing is certain, double-digit percentage growth is over, but it is not yet the time to talk about a crisis.

Problems of plastics waste have become clear not only in Europe, but also in the U.S., Steger said. Initiatives backed by the Plastics Industry Association supporting responsible use of plastics could aid some production.

“Proper waste collection systems are an important prerequisite that still have not been developed to the necessary extent, not even in Europe. But it is interesting that Sabic made first steps with chemical recycling of plastics waste back to feedstocks.”

There are several activities in Latin America to recycle fishing nets into pallets, and in Europe “it is interesting that, for example, Werner & Mertz's Frosch cleaner brand is being promoted with cradle-to-cradle packaging features. The main challenge though is to be active everyday, looking at what can be done differently with design for recycling and how to handle multilayer plastics packaging”.

“Plastics are being demonized, despite everyone being confronted by the advantages of plastics packaging. There will be huge changes in the future. The circular economy is now in focus, so we have to ask ourselves: What can we do about it as a machine producer? We have a responsibility to be involved, and proactively, by working together on common solutions with our customers and their customers, in order to support society.”