Momentum builds after orders drop for extruder producers

Lincoln, R.I.-based Windmoeller & Hoelscher Corp., the North American headquarters of the 150-year-old W&H Group, has been contributing to recent growth for the family-owned parent company.

About a quarter of film extrusion lines, printing presses and converting equipment built by the Lengerich, Germany-based parent company are delivered to North American processors, according to W&H Corp. President Andrew Wheeler.

The machine builder has doubled sales in the last seven years from $500 million to $1.2 billion last year, Wheeler added.

"2023 is a record year for us in terms of machines shipped, but that also means most of those machines were ordered last year," Wheeler said. "We've had a slowdown this year in order intake. I think the entire industry saw that."

Dana Hanson did. He's the president of Aurora, Ill.-based Processing Technologies International LLC (PTi), which manufactures sheet extrusion machines.

"The industry as a whole suffered from a slowdown following the boom times that were realized through the recent pandemic era. This was particularly realized in the first half of the year," Hanson said. "However, entering the summer months, the business climate appears to have regained momentum throughout the balance of the year."

Wheeler agreed, predicting a strong fourth quarter for W&H, which does about 80 percent of its printing and extrusion business in the food and medical markets.

"It was definitely slow, but it's starting to pick up again. We're seeing a lot of activity right now," Wheeler said.

Traditional markets are active for Ansonia, Conn.-based Farrel Pomini, which produces compounding and extrusion equipment for black and white masterbatch, rigid and flexible PVC, flooring compounds and flame retardants. Many of the company's mixing extruders for compounding applications are going to the cable and electrification markets, according to Paul Lloyd, Farrel Pomini business unit director and president of Farrel Corp.

"Flexible packaging is coming under pressure because of sustainability concerns," Lloyd added. "We are seeing regional differences, but since we operate globally, the growth areas are offsetting others, so overall our outlook is positive."

For Hosokawa Alpine American Inc., a blown film extrusion equipment manufacturer in Northborough, Mass., that serves the flexible packaging market, 2023 didn't join the "exceptional" financial years of 2021 and 2022, according to President David Nunes.

"Following an unprecedented run of year-over-year increases since the global financial crisis of 2009, 2023 was predictably a down year," Nunes said. "Fueled by federal rate hikes to curb inflation, excessive inventories to combat the supply chain crisis and a slowing economy, 2023 was a perfect storm of sorts for a slowdown."

Still, the year had its ups.

"Despite these headwinds, Alpine American had a successful year thanks to a strong starting backlog and several orders the first couple months of our fiscal year — October to September," Nunes said.

Several flexible packaging market segments remain strong and are growing, including food and medical packaging, industrial packaging, and all polyethylene recyclable packaging, Nunes said, adding that he sees positives in many of those segments in 2024.

"The pandemic only validated the need for ecologically, environmentally and economically superior flexible packaging products," Nunes said.

Hanson said PTi is fortunate to service a broad range of market segments within the overall space for sheet extrusion. "We have seen strength in packaging across the spectrum, heavy gauge, high barrier as well as custom/merchant sheet applications," Hanson said. "Our backlog consists of a variety of these subsegment themes. The current pipeline contains a wide spectrum of projects that broaden our focus."

For example, the focus now encompasses electric vehicles.

"As the EV markets mature, demands for new sheet applications emerge," Hanson said. "This is one metric that is driving what we've seen in heavy-gauge sheet equipment demands."

The extrusion business of Florence, Ky.-based Krauss-Maffei Corp. has seen activity and growth across the board, President Nolan Strall said, with a significant increase related to recycling and the circular economy.

At Entek Manufacturing LLC in Lebanon, Ore., Linda Campbell, vice president of sales, said the medical and packaging markets continue to grow.

At W&H, medical and food packaging are strong.

The extrusion business of Milacron, which is in the Molding Technology Solutions business unit of Batesville, Ind.-based Hillenbrand Inc., returned to pre-pandemic levels this year after increased demand that started in mid-2020 from markets for do-it-yourself home projects and remodeling. "We began to see that demand wane in the later part of 2021 and on into 2022, and it's leveled back to pre-pandemic levels in 2023," said Mike Puhalla, extrusion systems general manager.

Lawmakers, nongovernmental organizations and corporate social responsibility are driving sustainability issues for processors and machine builders.

"As a manufacturer of extrusion machinery, we focus not only on engineering the line to application specs for processing but aiding the customer incorporating technologies for best maximizing their resources," PTi's Hanson said. "This may include pelletizing process scrap for future use and lightweighting to minimize virgin sources and reduce costs."

Alpine American's Nunes said: "Recyclability has always been a priority for all processors. However, it has never been more of a focal point than it is today for all of the reasons noted and the latest trends for extended producer responsibility."

KraussMaffei's Strall said the machine builder is mindful of its responsibility to present and future generations.

"In doing so, we do not only focus on our own actions. Instead, we also see ourselves as paving the way for our customers and suppliers so that they too can achieve their sustainability goals," Strall said. "Our quest for greater sustainability encompasses several dimensions: our employees, our products, our production, our plants, our customers and our company as a whole."

Lloyd said Farrel Pomini's continuous mixing technology is well suited to mechanical and chemical recycling as well as processing biopolymers and recyclates.

"We have completed a significant amount of development work in these areas both independently and with customers," Lloyd said. "The progress we've made is helping enable our customers to meet their sustainability goals, reduce their carbon footprint while being profitable. Our technology is extremely energy-efficient, which is also an advantage. We are assisting traditional applications customers transition to the biopolymer and recycling landscape of materials."

Hanson pointed to PTi systems that aid in reclaiming materials, lightweighting and energy efficiency. "Additionally, the multiresin processing capabilities of our twin-screw dryerless system expands processing capabilities to allow for use of a variety of resin applications on one extrusion system, while making it easier and quicker to introduce processed scrap into the extrusion process without the need, time and energy required to dry and crystallize, thereby making efficient use of resources and energy," Hanson said.

Entek's Campbell said the extruder builder uses energy-efficient motors; converts solid barrels into sleeved barrels to cut costs and scrap that could be landfilled; reviews older lines to ensure things like heater blankets, cooling systems and effective heat controls are being utilized for the best energy efficiency; and supports customers setting ambitious corporate sustainability targets.

"With this, they are reaching out to us for assistance in many different areas, such as support with process development in order to incorporate scrap materials from their own production process, help designing a process around increasing the amount of recycled materials in their formulations, and reducing scrap from startups and changeovers," Campbell said. "We also continue to see a focus on using biopolymers for well-established customers as well as emerging companies."

Alpine American's Nunes said the company is focused on source reduction that results in exceptional film performance at the thinnest possible gauges; fast purging dies for minimal product waste; and extrusion technology for processing recycled materials while providing 30 percent energy savings.

At W&H, Wheeler said machines are built to run a broad range of materials for an increasing number of customers wanting to use recycle-ready and monomaterial products for food packaging.

The move toward automation and Industry 4.0 connectivity are being driven by labor force issues.

"With changeover of employees and difficulty in finding replacements, automation becomes necessary not only for maximizing efficiency and maintaining steadfast reliability of the overall extrusion processes, but in making the process more intuitive for current and new employees," PTi's Hanson said. "For us, a great deal of the automation starts with the process controls screens, in which focus is not only on maintaining reliability within the process, but foreseeing challenges or maintenance issues before they may occur."

Alpine American's Nunes agreed.

"The biggest challenge our customers face is finding and keeping skilled employees," he said. "Our current automation focus is to further improve ease of use and maintain repeatability and quality with less user intervention. We are also working on new, dynamic training methods to get new personnel up to speed faster and upskill existing workers to empower their abilities, which is good for workers and companies alike."

Entek's Campbell said many automated facets of production involve "repetitive, nonvalue-added" tasks.

The goal is "to automate whatever process controls that we can to allow the operators to spend their valuable time on something they need to be working on," W&H's Wheeler said.

"We feel that automation adoption is beyond the early stages but it is still slow to be fully embraced. Conditional monitoring is the primary function we're seeing with our customers," Farrel Pomini's Lloyd added.

Extruder builders also are seeing cases of reshoring.

Entek's Campbell said the increased demand for North America-made products as a result of supply chain issues during COVID continues today.

Lloyd added: "There is evidence of reshoring, and areas where we see that the most is in flooring, cable and general compounding production. There is more security in the supply chain and greater control around any interruptions that we may face. Driving factors in this are the lowering of the impact of CO2 when it comes to local manufacturing and the cost of global transport."

Fred Piercy, president and general manager at R&B Machinery LLC in Saline, Mich., said several customers invested in single-screw extruders for profile applications for the home-building and agricultural markets.

"Some of this was made overseas, and customers are now saying we're just going to bring this back to the states and set up shop here based on cost, timing and logistics in general," Piercy said. "They'll find someone to run it here. Even though costs have come down again from shipping from Asia to here, there are still logistic challenges with it to manage that."

Entek fully staffed its new Henderson, Nev., facility and started running it 24/7 in 2023. The $15 million-plus investment made in 2022 was the result of customers' needs for quick parts deliveries, Campbell said. "This is one area where our business is growing, even though the major capital equipment purchases are slowing down," she added.

W&H is doubling the size of a warehouse with a 12,000-square-foot addition for its expanding parts and support business. Some of the space will be used by a W&H subsidiary, Garant Maschinenhandel GmbH, which specializes in machinery for paper bags and packaging. W&H also is adding 6,000 square feet of office space.

In addition, there has been a leadership shift with two promotions at W&H. Kasie Fairbarn is the vice president of sales, and Vladimir Utovac is the vice president of service. The promotions represent a generational transition.

"We're also expanding and have increased our personnel count for both extrusion and printing with salespeople, a service manager and service technicians," Wheeler said.

In Pawcatuck, Conn., Davis-Standard, a manufacturer of extrusion and converting technology, achieved ISO 14001 certification at its headquarters for taking a systematic approach to managing environmental impact.

"At Davis-Standard, we believe in taking proactive measures to minimize our environmental impact and contribute to the plastics circular economy. The ISO 14001 certification for our Pawcatuck facility is a testament to our ongoing efforts to integrate sustainability into every aspect of our business, be it in new machines or retrofit upgrades to process biopolymers or circular economy structures to energy-efficient and waste-reducing equipment designs," CEO Giovanni Spitale said in a statement.

Hanson said PTi expanded its lineup of heavy-gauge sheet producing products in response to strong demand in 2023.

"This coincides with market demands for end uses, including EV-related components and applications," Hanson added. "Themes related to improvements include lay-flat, low residual orientation through equipment design features, high outputs and overall superior sheet aesthetics."

PTi also refined its high-vacuum, dual-vented, single-screw extrusion technology for some applications of dryerless ABS processing of heavy-gauge sheet.

In addition, the company launched a full lineup of offline flat die servicing, maintenance and cleaning equipment monitored by products branded as uCAMS, uCAMS Plus and uCAMS DR.

"This allows users the ability to safely split, service and clean flat film and sheet dies. The uCAMS Plus products expand the applications in addition to flat dies to include feed screws and chrome rolls — a true triple play," Hanson said.

PTi will invest more than $3.5 million dollars in its technology development center, installing a new sheet extrusion system featuring the company's latest technologies and design features.

Hanson said the current system, which has been sold, is capable of processing sheet materials like PET, recycled PET, glycol-modified PET, polylactic acid (PLA), high impact polystyrene, polypropylene and polyethylene at rates up to 3,000 pounds per hour on the same equipment configuration.

The high vacuum dryerless twin-screw extruder, roll stand, gauge scanner and winding system will be shipped to its new owner in spring 2024.

Alpine American is in the final stages of completing a building expansion in Massachusetts to add space for equipment testing and what Nunes describes as the ever-increasing need for critical spare parts inventory.

Entek is investing in development of a new 160-millimeter twin-screw extruder.

Farrel Pomini will continue investing in WF Recycle-Tech, a United Kingdom company with a patented pyrolysis system for recycling end-of-life tires, in 2024.

"The WF Recycle-Tech system offers a distinct and pioneering approach to the pyrolysis methods currently available utilizing Farrel Pomini continuous mixing technology within their platform," Lloyd said.

Additionally, the research and development team will work to improve compounding applications utilizing recovered carbon black to support customers looking for more sustainable options, Lloyd said. "These innovations help drive the closing of the tire recycling loop and improve sustainability across several of our business sectors," Lloyd added.

Farrel Pomini's Lloyd said: "We are cautious when thinking about 2024 due to the myriad of global economic and political concerns, including the U.S. presidential election. With that said, we do feel business will be stable with a general decline overall offset by increases in newer applications such as biopolymers and recycling."

Green initiatives and innovations are growing drivers of extruder demand.

When "newer" applications are factored in, Lloyd said, "it feels like their opportunities increase almost daily."

"It is a very exciting time to be in the plastics industry, and luckily for Farrel Pomini, continuous mixing technology is inherently well suited to processing of biopolymers, recyclates, etc., requiring low processing temperature, short residence time and efficient shear mixing," Lloyd added.

Strall said: "As circular economy and carbon footprint reduction initiatives continue to take hold, we expect the recycling market to stay very active."

At Entek, Campbell expects the building and automotive markets to remain soft and the packaging and medical markets to continue to grow. "This will be dependent upon economic recovery. However, biopolymers and recycling will continue to be strong," Campbell added.

PTi's Hanson remains optimistic about the business climate and market strengths heading into 2024 after a slow period for the first half of 2023.

"Obviously, the increased cost of borrowing has introduced a headwind for many processors. The major players within the markets are still making investments to stay ahead of the fray and service their market demands. This, in our opinion, will continue and the smaller processors will likely feel the brunt of those higher borrowing cost effects, more so than the larger companies," Hanson said.

At Milacron, Puhalla said economic uncertainties and higher interest rates greatly impact growth, but there is also some give and take.

"For instance, the government investing in infrastructure has helped to offset the rise in interest rates that have been drastically felt," Puhalla said. "The construction industry is a lucrative end market for Milacron. The government wants to bring high-speed internet to everyone, which equates to a significant uptick in very specific projects related to conduit supplies that Milacron provides."

Nunes said, in general terms, 2024 should be a down year for Alpine American due to all the factors cited. "However, we have no shortage of projects and prospects that bode well for the future," Nunes said. "We are also looking forward to a return of the NPE in 2024 in Orlando."

Wheeler said, "The business climate is what it is, and we have to move with it."

He added that he is proud to be part of the plastics industry.

"It's a great industry to be in," Wheeler said. "It's a hard-working, really friendly and creative industry with a lot of very interested and interesting people. The industry itself has best practices that are something to be imitated."