Press makers cite midyear slowdown, remain hopeful for 2023

Injection molding machine sales started the year on a high note with momentum from an exceptional 2021 continuing to buoy capital investments by plastics processors.

Press producers sold an estimated 5,000 units last year, which was an increase of 25 percent from the 4,000 presses sold in 2020. For a few months, it looked like 2022 could be a repeat. However, the second half of 2022 brought a marked change.

Engel North America in York, Pa., has seen a decline in incoming orders since August, according to Stefan Engleder, CEO of parent company Engel Austria GmbH.

"This is mainly attributed to the construction and infrastructure industries. Compared with this, automotive is still performing well globally. Engel is gearing up for a further decline in demand, although we are optimistic for the medium- and long-term outlook. Plastic processing remains a growth market," Engleder said in an email.

Injection molding machine builders expect a 10-20 percent drop in units shipped in 2022. Several cited the midpoint of 15 percent, which would be a decrease of 750 molding machines to an estimated 4,250 units for the year.

The estimate is based on Plastics News industry interviews and story archives. The Plastics Industry Association trade group crunches other data about North American machine shipments but only shares it with its paid members.

The trade group did report that shipments of primary plastics machinery for injection molding and extrusion slowed in North America in the third quarter. The preliminary estimate of shipment value from reporting companies totaled $353.8 million, which was a decrease of 14.4 percent from the previous quarter but an estimated increase of 6 percent from a year earlier.

Also, historically, there is a bump up in shipments in the fourth quarter.

To date, 2022 was strong to the middle of the year then also slowed for Rocky Hill, Conn.-based Arburg Inc., a subsidiary of Germany's Arburg GmbH + Co KG.

"As the COVID crisis has subsided, many companies — especially in medical — have found that production capacity that they built up in 2020 and 2021 can be reallocated," Arburg Inc. President Friedrich Kanz said. "So, there is now a certain consolidation going on, and sales volumes are returning to more normal levels."

Overall, the market is still very active and the plastics industry is in good shape, Kanz added.

At Absolute Haitian, sales are more in line with 2019 or 2020 than the record year the company enjoyed in 2021.

"This should be similar for many injection molding machine manufacturers in the U.S.," said Glenn Frohring, an owner of the Worcester, Mass.-based company that sells injection molding presses made in China by Haitian Plastics Machinery Ltd.

Haitian, the world's largest press builder, reported in March that it sold more than 56,000 machines in 2021. Sales climbed 35.7 percent to a record $2.5 billion following strong global demand in the first half of the year and stability in the second half.

Last year also brought a record new order rate for Wittmann USA Inc., formerly Wittmann Battenfeld Inc., in Torrington, Conn., and the machine builder is sitting on a record order backlog, according to President David Preusse.

But, unlike 2021, this year has not been strong and stable.

"As is the case with many global markets, the U.S. plastics industry is recording a 15- to 20-plus percent reduction of new orders in 2022," Preusse said. "Many shipments pushed over to this year, so revenues are still okay, just impacted for supply chain delays."

At Boy Machines Inc. in Exton, Pa., sales have slowed down by about 20 percent, President Marko Koorneef said.

Meanwhile, at Batesville, Ind.-based Hillenbrand Inc., sales for the Molding Technology Solutions business unit, which includes plastics machinery manufacturer Milacron, increased 6 percent to $276 million compared with last year. The increase was driven by higher volume and higher prices. However, order volume slowed in the fourth quarter due to delays in customer decisions.

"Our Molding Technology Solutions segment had annual revenue and margin expansion that came in near the high end of our expectations. And while we did see a slowdown in orders in the fourth quarter, largely due to the rise in global macro uncertainty, we are entering fiscal 2023 with a strong backlog," CEO Kim Ryan said in a Nov. 17 quarterly call.

Tony Marchelletta, national sales manager for Sumitomo (SHI) Demag, said, "The overall IMM market is definitely declining. However, we're fortunate to be aligned with customers and markets that are not easily impacted by the current economic challenges. Current projects and demand from newer projects have remained steady year over year."

LS Mtron machine shipments to the U.S. "remain steady and similar to 2021," according to Peter Gardner, business director of LS Mtron Injection Molding Machine USA.

At Nissei America Inc. in San Antonio, sales were up 3 percent on a unit base and 15 percent on a dollar base, according to President Junichi Kubota.

"We have been keeping up with this high pace," Kubota added.

At Krauss-Maffei Corp. in Florence, Ky., Sales Director Martin Stojkovic said he has seen "a steady increase in growth" with the hottest markets being logistics, packaging and medical.

In Elk Grove Village, Ill., at Plustech Inc., the North American base of Sodick Co. Ltd.'s injection molding machinery division, National Sales Manager Len Hampton said the businesses experienced record sales the last two years and 2022 is poised to top those numbers.

"We're going to finish strong," Hampton said. "This could ultimately mean there may be a problem for the industry in a few years with all those machines out there."

Plustech has seen a big uptick in orders from customers manufacturing products and components for medical devices and electronics, especially related to connectors for personal electronics. "High-temperature, engineering-grade materials are a great fit for Sodick technology, and these markets drive demand," Hampton said.

The medical market is the strongest for Boy in the U.S. "COVID is the main factor," Koorneef said.

At Nissei America, which celebrated its 45th anniversary, Kubota also said the medical market was the strongest and pointed to the pandemic.

"Machine sales to irrigation industry has been also steady," Kubota said.

Sumitomo (SHI) Demag's strongest markets continue to be consumer packaging and medical. While products and needs have evolved post-pandemic, Marchelletta said both have remained strong.

"Medical is trending away from pandemic-related products, back to a more normal mix of devices and disposables. The aging U.S. population continues to drive new developments that require single-use drug delivery, at-home health care and other diagnostic and treatment products," Marchelletta said.

The consumer packaging market has seen similar adjustments.

"During the pandemic, there was much focus on single-use, necessity items such as standard caps and cutlery. The new trend is back to higher-end, brand-specific packaging. This is driving some major investments in equipment," Marchelletta said.

At Krauss-Maffei, Stojkovic singled out the logistics, packaging and the medical markets as strong in calendar year 2022 with the automotive segment looking better.

"Also, with so many people still working from home, the home improvement product market continues to remain strong," Stojkovic said.

LS Mtron's strongest markets in 2022 have been logistics packaging, such as totes and containers, and automotive molding, driven largely by U.S. suppliers to Hyundai and Kia and the beginnings of EV battery production programs.

"Appliances and electronics follow closely due to robust machine sales to those manufacturers, including LS Mtron's founding company, LG Electronics," Gardner said.

At Absolute Haitian, Frohring said the packaging and consumer products markets picked up during the pandemic and stayed strong in 2022.

"While many people were remotely working from home, they had time to clean out attics, update living spaces and convert living spaces to work-at-home spaces," Frohring said.

The manufacturers of these packing and consumer products replaced older, inefficient machines with newer energy-saving platforms like the servo-hydraulic MARS 3 and electric ZERES 3.

"Our third-generation models introduced in 2021 were very well received and sold strong in 2022," Frohring said.

Overall, Engel North America performed very well in 2022, Engleder said, with the packaging division in particular growing significantly.

"All told, Engel is benefiting from the ongoing reshoring trend in this region," he added. "The response by Engel to the very high demand for machines with short lead times in North America is the stock machine program we have been extending year by year; this strategy has helped Engel win over many projects."

Even after the COVID rush has calmed, the medical market continues to develop for Engel. Engleder pointed to products related to autoinjectors and inhalers.

The automotive sector also recovered faster than expected for Engel in fiscal year 2021-22 and still accounts for a high share of order intake, Engleder said.

"Electric mobility and autonomous driving require new technologies, most of them based on plastic materials," he said. "Another driver is the modernization of machinery to boost energy efficiency. In the automotive industry, the carbon footprint plays an increasingly important role."

At Wittmann, medical market demand has switched from pandemic-related needs to products that serve the growing aging population, while consumer goods stayed strong and new interest came from the automotive market.

"We started seeing automotive asking about more automation, since robots don't get COVID or exposures," Preusse said. "But unfortunately, the anticipated auto sector demand rose, but not manufacturing output. They, too, were stalled from critical parts shortages, hence high demand, lower output."

Everything from raw materials to hoses and fittings to microchips continue to challenge many machine builders in terms of increased prices and delays.

"The situation in materials procurement has eased slightly but remains critical. We are still doing everything possible to cushion the effects of the bottlenecks," Engleder said. "This is helped by our multisourcing strategy, the good relationships with our suppliers with whom we align on a daily basis and strategic investments to meet our supply obligations. With this strategy, we were consistently able to deliver and lessen major delivery delays."

All companies have had to make some adjustments, Marchelletta said, noting Sumitomo (SHI) Demag developed multiple supply chains to support its manufacturing facilities in Germany, Japan and China and is part of the vertically integrated Sumitomo Heavy Industries group.

"As for microchips specifically, we have found solutions," Marchelletta said. "Newer control models do not seem to be as affected as those that are 10-plus years old. For the older models, we've found suitable replacements, upgrades or offer rebuild services for our customers. This is something we faced with our legacy fleet for many years."

At Sodick, Hampton said microchips aren't a problem like other components.

"We manage our supplies and raw materials, but hoses, fittings and electrical controls have been more difficult, and we're ordering more now than ever," Hampton said.

LS Mtron has been able to isolate itself from major disruptions so far, thanks in part to the family of LG- and LS-founded companies in its supply chain. For example, the South Korean steel castings come from an LS-founded steel foundry, Casco; servo motors and systems come from Higen, an LG-founded company; and many electrical components come from a sister company, LS Electric.

"And finally, for logistics, LG spinoff LX Pantos is one of the world's largest shipping lines," Gardner said. "Our deep relationships with these suppliers — and buying power as one of Korea's largest conglomerates — has kept our production line running well. We can build a 1,000-ton machine, from castings to cargo, in about 100 days."

Frohring said Absolute Haitian also has cleared its hurdles.

"Any supply chain issue has been mitigated with alternatives identified and quickly sourced," Frohring said.

Arburg officials said the company was able to avoid supply chain problems thanks to long-standing partnerships with predominantly local suppliers and a high level of vertical integration.

At Krauss-Maffei, Stojkovic said some machine components are hard to come by with the supply chain problems, "but we've put several plans in place to mitigate the effects of customer commitments and machine deliveries."

Even though LS Mtron can go from a machine casting to machine cargo in about 100 days, the timeline can get tricky after that.

"The widely reported delays at U.S. ports, caused by congestion, were real, and we did face challenges to get our machines off the ships and on to their final destinations," Gardner said. "It does seem to be freeing up now."

Krauss-Maffei's Stojkovic said there are fewer freight lines crossing the ocean, and shipping companies have reduced the number of port of entries.

In the case of ocean freight, Marchelletta said some routes had gone from three weeks out to more than two months.

"This has caused us to proactively forecast for our customer's needs and increase our local stock position to ensure we can meet their demands," he said. "In addition to freight, all travel- and logistical-related costs are dramatically increasing. This not only impacts machine shipments but travel for our service and support staff members."

At Boy, Koorneef said he has seen a slight improvement in sea freight and truck shipments in recent months, "but the situation is still difficult to handle" in terms of longer lead times and price increases. "We see a trend from customers to stack and combine shipments to reduce the number of pick-ups," Koorneef said.

Hampton said logistical challenges have improved but at a price. "It's getting better, but freight costs for getting machines from Japan to U.S. is obviously more costly. Ocean freight and inland freight can be five times what it used to be," he said.

Preusse summed up the situation this way: "It's no secret the over-demand economy put the global supply chains into total chaos and disruption, which has led to inflation. Logistics have seen record inflation."

At Billion Plastics Machinery Inc. in Rochester Hills, Mich., North American Sales Manager Georg Kiesl said transportation costs have been rising due to increased fuel and maintenance costs. "The continued shortage of trucks and truckers in parts of North America has also had an impact on availability and reliability of road transportation," he added.

Frohring said sea freight has stabilized but trucking problems persist.

"We have strong relationships with often-used trucking companies to offset this," he added. "Regarding fuel costs, we have experienced the impact of higher fuel costs."

Overall, Absolute Haitian machines are getting built and delivered without problem, Frohring said.

"Haitian does not have this issue because of the high level of capacity and volume of machines sold around the world. We can maintain a healthy supply of stock machines," Frohring said. "Plus, suppliers tend to prioritize us due to our volume, helping to mitigate delivery of components."

Sumitomo (SHI) Demag has made a major investment over the last two years in its inventory of stock machines with modification capabilities.

"Instead of waiting on a long delivery, directly from the factory, many times we have a suitable machine that is in process or on our floor in the U.S.," Marchelletta said. "Since we have good relationships and control of our supply chain, coupled with the ability to produce globally, we have not been impacted as dramatically as some. However, there continues to be variables and uncertainty in shipping lanes that have caused delays. Nothing that we can't overcome with our combined strategy of offering built-to-order and stock/inventory solutions."

Nissei America can ship as quickly as eight to 12 weeks, depending on the machine specifications, Kubota said.

Billion also is able to honor its standard lead times of around three to four months, Kiesl said.

However, for machines with customized equipment, Koorneef said the lead times can be up to a year.

Logistical problems are behind recent reshoring projects, according to some machine builders, while others say there is more talk than action.

"Absolutely, there is a movement to reshore in North America," Sumitomo (SHI) Demag's Marchelletta said. "We first saw it just before the pandemic as pro-manufacturing policies and tax incentives were put in place. It was then accelerated during the pandemic, especially in the areas of medical and consumer markets that struggled to get critical products from offshore. This continues to expand into more technical markets, such as electronics."

At Krauss-Maffei, Stojkovic agreed.

"Reshoring is taking place and will continue to do so across all markets, especially with electronic parts and microchips," he said.

LS Mtron has been equipping new U.S. medical molders and manufacturers of products for home improvement and organization. "Reshoring of these types of products continues, and for those concerned about the stability of the U.S.-China relationship, alternative supply chains such as South Korea and others are highly attractive," Gardner said. "LS machines made in South Korea seem to fit the mold for companies seeking to reshore and diversify their supply chains."

The challenges of overseas business trips and international shipping have prompted some of the reshoring, Absolute Haitian's Frohring said.

"It is related to the restrictions of visiting the supply partners in China and the desire to have contingencies that will counteract logistical delays and costs due to the period where container prices were extremely high and delivery times from overseas suppliers were long," Frohring said. "Much of this was due to poor management of West Coast ports, overwhelming volume and poorly thought-out regulations."

Imported goods from China are especially vulnerable as the U.S. maintains its reshoring momentum and rebuilds its industrial base, according to Harry Moser, president and founder of the nonprofit Reshoring Initiative.

The stage is set for a manufacturing resurgence in which $4.6 trillion of exports could shift to regional sources worldwide by 2030, Moser said in an email, pointing to a report by McKinsey & Co., a consultancy firm founded in Chicago in 1926.

Moser, the former president of machine tool maker GF AgieCharmilles and 1996 SPE Mold Designer of the Year, sees opportunities for a variety of products to be reshored.

"Products sourced in China today come to mind," Moser said, "and also products where the U.S. isn't self-sufficient, like PPE [personal protective equipment], pharma, EV batteries; products with high freight vs. labor content; and production that is automatable, fairly energy-intense and where U.S. raw material cost is competitive. Plastic products fit most of those categories well."

In 2021, the push for domestic supply of essential goods propelled reshoring and foreign direct investment (FDI) job announcements to a record high of 260,000, according to the Reshoring Initiative. Data from the first half of 2022 shows more gains. The number of job announcements is expected to reach 348,500 by the end of the year.

For the first half of 2022, 6,112 jobs were reshored for manufacturing plastic and rubber products, which ranks 10th among 16 categories tracked by the Reshoring Initiative.

"We try, not always successfully, to put plastic components in a category with rubber products. Many plastic components are reshored to produce transportation equipment, EV batteries, PPE, etc., and are in other categories," Moser said.

The number of jobs created to produce electrical equipment, appliances and components topped the list for a second year. Electric vehicle batteries are in this category, which usurped the No. 1 ranking from transportation equipment, even though it still applies to the transportation industry.

Electrical equipment's share of jobs announced went from 3 percent in 2019 to a projected 37 percent in 2022.

The second-largest industry to reshore jobs is the chemicals category, driven by pharmaceuticals, particularly the need for vaccines and COVID-19 treatments, but also by renewable fuels and plastic materials. The chemicals category moved up a notch from the third spot in 2021.

"The biggest trend has been the production of polyethylene, polypropylene and plastic resin," Moser said. "Driven initially by fracking, now it's driven by Russia-Ukraine making the U.S. very attractive vs. Europe."

The Russia-Ukraine war is driving up energy costs in Europe, while the U.S. has relatively stable prices and green energy incentives that are luring companies.

"Some EU companies are saying that the USA is a safer place this winter, so we may get some reshoring, however, wage inflation may redirect spending for new plants in Mexico, as before [former President Donald] Trump curbed that migration in his trade war," Preusse said.

Marchelletta agreed, pointing to other factors that could make near-shoring more attractive than moving a company to the U.S.

"Our market is facing several hurdles such as rising wages, skilled labor shortages and pending tax penalties. Many companies are considering other sites on our continent, such as Mexico and Central America," he said.

Arburg's Kanz holds a similar view.

"Whether you look at reshoring or at companies retaining production in North America, this is an ongoing process, and it will continue," he said. "The big question is if there will be enough labor to support it — and we may see work going to Mexico instead — but it is still a trend that will continue. It is an interesting process, and it will benefit the entire North American plastics industry in 2023 and for years to come."

After the chemicals category, transportation equipment ranks third for reshored jobs, followed by computer and electronic products, which has been pushed in recent years by solar panels, robotics, drones and semiconductors.

The other top 10 categories are medical equipment and supplies, fabricated metal products, hobbies, castings, primary metal products, and then plastic and rubber products.

Russia launched a military attack on neighboring Ukraine on Feb. 24, bringing worries of war casualties, a refugee crisis, grain shortages, sanctions, nuclear threats and more to a world two years into a pandemic.

Global commodity prices skyrocketed, particularly for natural gas, wheat, fertilizers, metals and minerals. The supply chain kinked up more and new geopolitical tensions arose.

"Undeniably, the ongoing conflict has been a strong driver of global raw material and energy prices," Kiesl said.

Krauss-Maffei's Stojkovic put it this way: "The war in the Ukraine has been another drain on our supply chain and has made it even more difficult to receive parts in a timely manner for production of machinery."

Also, determining the extent of the impact on processors' machine needs is difficult, Boy's Koorneef said.

"Several East European partners have canceled or postponed projects in connection with Russia," he said. "At the same time, others are bringing back the production to Europe for more reliability in their supply chain."

Frohring also said some plastics processors located near the conflict shifted production. However, he added, "The major impact to our customers seems to have been the higher energy costs to produce and ship and less money to spend on equipment."

Some plastics processors are shifting production all the way to North America or investing mainly in all-electric presses, which generally use less energy than hydraulic and hybrid machines.

Marchelletta pointed to Sumitomo (SHI) Demag customers with a strong presence in Europe.

"They are much more concerned now with reducing energy consumption of their production with our all-electric products. This was an immediate reaction to the sharp increase in energy prices in Europe," he said. "For fleets that have a large number of hydraulic machines, many are using this as an opportunity to replace those units with all-electric machines. Others are choosing to offshore away from Europe. This has led to sudden demands in North America as production gets relocated."

Russian President Vladimir Putin is under pressure to withdraw from Ukraine and end the "special military operation." An estimated 100,000 Russian and 100,000 Ukrainian soldiers were killed or injured by early November.

Putin also has been accused of weaponizing food and energy by blocking grain shipments to developing countries and cutting gas flows to the European Union. As EU governments turned to other gas and oil suppliers, global prices moved up from the increased demand.

"Putin's war includes an energy war, and most global markets move together, so while the EU is going to be in worse shape come winter, we all feel the threats," Preusse said. "Much of the world didn't know some of the critical items that come from Ukraine like grain until the war suspended them."

The war also is raising questions about nations that have remained neutral, such as China and India.

"I hate to say it, but China's support of Russia has caused certain customers to consider alternative supply chains," Gardner said. "Korean and European suppliers are surely a beneficiary of the increased concerns about the U.S.-China relationship, but I think we all would rather trade any increase in business opportunity for peace in Ukraine."

Inflation and higher interest rates also are factors for some machine buyers.

"It certainly is impacting our North American and global markets," Marchelletta said. "It is easy to see from our most recent … plastics industry data that new injection molding machine consumption is significantly down for our market."

Even so, converters are still buying Sumitomo (SHI) Demag equipment and planning for significant future replacements and growth, Marchelletta said.

"We remain optimistic," he added. "We've spoken to some customers that were planning for 20-plus replacement units in the next year that have changed their timing or only reduced the number, not completely abandoned the projects."

Boy staff hasn't noticed any changes related to inflation or higher interest rates — yet.

"We feel that a lot of customer projects have been held up by COVID and now had to be executed to move forward," Koorneef said. "But the longer the inflation continues, the more it will have an impact on new projects. Higher interest rates will make it more difficult for customers to find financing."

Hampton said customers that buy Sodick machines aren't typically financing, so interest rates aren't an issue.

"If the work is there, customers will do what's necessary to secure the equipment and get the orders out," Hampton said.

At LS Mtron, Gardner said inflation could become a factor, but "so far the strong dollar in relation to the Korean won has actually allowed us to keep our sales price in check; we have not seen any negative influence so far — fingers crossed!"

Krauss-Maffei's Stojkovic agreed.

"In some form or fashion, it must play a factor; however, the books are full, and the projects keep coming despite the high inflation."

With all the talk about inflation and a possible recession, Arburg's Kanz said, "I don't think we will have a booming year next year. But it will be steady, and I believe the American plastics industry is in good shape and may get stronger. The U.S. is in a much better situation than Europe, where energy costs are way up."

Preusse said, "Time will tell what kind of recession may be ahead. We easily have over six months' backlog and more new projects coming, but obviously the Fed is raising rates to cool the economy that, frankly, the government inspired in epic stimulus money north of $6 trillion."

With 2022 being a K show year, injection molding machine builders presented many new technologies and solutions.

Engel's new two-stage process to recycle plastic waste directly like flakes got a lot of attention in Düsseldorf, Germany.

"Until now, shredded plastic waste for injection molding processing first had to be melted and regranulated. This process is energy-intensive and correspondingly expensive," Engleder said. "With the new two-stage process, this work step can be completely eliminated, which massively increases the cost efficiency of recycling. Ecology only goes with economy; we at Engel always keep this in mind in all our development activities."

Nissei America launched a low-floor-type vertical machine, while Wittmann showed processors how to modernize manufacturing plants.

"The ongoing exploration into smart factories, Industry 4.0 and digitalization is drawing more clients toward Wittmann, since we lead in total cell integration, since we are virtually alone in offering all the processor needs made by and integrated by us," Preusse said.

Sumitomo (SHI) Demag expanded all-electric offerings in key areas in response to customer requests, according to Marchelletta.

"Our medical molders' need of a flexible platform for LSR/LIM molding has led to a release of all-electric models capable of integrated LIM solutions," he said. "Higher-performance injection requirements have led to the release of our SHR (superhigh response) injection. In general, customers are wanting more integrated and networked solutions. Our IntElect2 models are well equipped to address these networking requirements."

Frohring said technology advances are refining the Internet of Things and Industry 4.0 connectivity and protocols.

"This is settling out and becoming more accessible across industry platforms," he added.

Kanz also said the digital products being rolled out on a regular basis are significant.

"Those that Arburg has introduced in the last couple of years are receiving positive feedback from customers," he added. "I think I can safely say that all the different digital products — remote service, for instance — are very well received by our customers."

Sodick's focus on making its machines modular resonates with processors, according to Hampton. "It's been a definite trend to have big molds with a lot of action in the tooling, shooting very small shot sizes, of 2-3 grams. That's Sodick's sweet spot, and it's really boosting sales," he said.

Energy efficiency has been a hot topic for Boy staff.

"The already low energy requirements of our machines have been a major sales factor and have become more and more important since the energy crisis in Europe has been picking up speed," Koorneef said.

Billion rolled out another size of its full-electric SELECT² series with the launch of a 150-ton press. The second-generation machine features an integrated indexing arm system.

LS Mtron added Mucell microcellular foam capabilities to its lineup, launched AI features for its machinery and introduced a new high cycle line of all-electric presses.

Krauss-Maffei rounded out its data solutions lineup with products for a smart assistant, condition monitoring, remote diagnostics, troubleshooting and more.

The machine builder also presented 3D printers for industrial applications at K 2022. Additive manufacturing will form the fourth pillar of the Krauss-Maffei product portfolio along with injection molding, extrusion and reaction process machinery.

Plastic processors are becoming more cautious and waiting longer to place machine orders, often until they have production orders in hand.

"This has driven our stocking/inventory program in close communication with our top customers so that we are equipped to support last-minute machine needs," Marchelletta said.

He puts Sumitomo (SHI) Demag machine orders for new projects vs. replacement at an even split. "Some of our customers realize that to be competitive, they must rid themselves of older, less-efficient, lower-precision equipment and replace it with the latest technology," Marchelletta said.

The Boy sales team has seen an increase in machine replacement. Koorneef said the replacement market is 30-40 percent of business.

For Sodick, Hampton said about 70 percent of machine buyers are adding capacity for existing jobs and 30 percent for new applications.

At Krauss-Maffei, Stojkovic said customers are adding machinery and not replacing due to significant increases in utilization.

Frohring said replacement machine opportunities continue to grow.

"The cost to operate and the cost and availability of spare parts is still a killer for molders with older machines. This is where Absolute Haitian has an advantage," Frohring added.

Higher energy prices are leading to a "massive" reduction in return-on-investment times, especially in Europe, Engleder said.

"Accordingly, processors are increasingly driving the modernization of their machinery," he said. "Demand for energy-optimized injection molding machines and integrated production cells has risen sharply. Replacement of machines is therefore a critical driver in these difficult times."

Engel customers not focused on energy efficiency often invest in new equipment to support operators or automate production, Engleder added.

"Many of our customers find it challenging to find skilled workers," he said.

Electric injection molding machines continue to make up about 50 percent of U.S. unit press sales, according to machine builders.

"It has been hovering in that range over the last 10 years," Kanz said.

However, the mix varies for many companies.

"While the overall industry remains split between all-electric and hydraulic, many of our customers are pursuing more all-electric solutions for improved efficiency and performance," Marchelletta said. "Even markets such as thin-wall packaging that once required ultraperformance hybrids are now pushing us to develop all-electric solutions that are capable of higher speed and pressures."

In the precision molding and multicomponent sector, Kiesl said the U.S. is a full-electric market for Billion.

"The future of the injection molding machine market continues to be in the electrification of machines," Kiesl said.

Electric drives require little energy and are increasingly getting more attention, according to Engleder.

"What is important above all, however, is always the total efficiency," the Engel CEO said. "With an optimally matched, energy-optimized injection molding machine, integrated intelligent temperature control solutions and smart assistance, overall energy savings of up to 67 percent are possible."

At Boy, Koorneef said all-electric presses in the range up to 50 tons hold 12.5 percent of the market and for the 50- to 100-ton presses it is 65 percent.

While the U.S. market in general is 50-50, Kubota said Nissei America sells more hybrid and hydraulic machines.

LS Mtron press sales lean slightly in favor of servo-hydraulic machines and electric screw drives.

"The electric screw drive not only cuts down on energy usage but can shorten cycle times significantly due to the ability to overlap machine functions and continue screw recovery while clamp actions are taking place," Gardner said.

Absolute Haitian's Frohring noted, "The delta on energy savings between servo-hydraulics and all-electric machines is low."

For Sodick customers, Hampton said hybrids offer versatility.

"We're hybrid because we believe whatever the function of that machine, we want the best technology for that particular function," Hampton said. "For example, for plunger response on the injection unit, we want a 2-3 millisecond response time. We prefer hybrid because then we aren't married to a certain technology. We can use whatever machine will get the job done best."

The forecast for new vehicle production in the U.S. was lowered a few times from 16 million in early 2022. Now some projections indicate it will finish at 14.5 million units, which is 1.5 million vehicles more than 2021.

Automotive demand dropped from 15.8 million units in January to 13.7 million in October, according to Harbour Results Inc., an industry consulting firm in Southfield, Mich. The automotive industry was hampered by continued disruption to its supply chains from component shortages, shutdowns risks at OEM production facilities and weakness in the U.S. economy.

"The automotive industry in general has not been recovered since the pandemic started," Nissei America's Kubota said. "We do think that the trend will shift to electric vehicles."

At Billion, Kiesl agrees.

"We see a strong shift into EV-related manufacturing with overall automotive demand being low with little prospect of change into early 2023," he said.

Sumitomo (SHI) Demag saw its largest decline in sales to the automotive market in early 2020 as companies were forced to close due to pandemic mandates.

"Since then, it has remained flat," Marchelletta said. "While overall automotive units decline, our technology aligns well with high-end applications that are growing with the EV movement."

LS Mtron is a major supplier to the automotive market, particularly in support of Korean automakers Hyundai and Kia.

"Traditionally, we have seen increased machine purchases when automakers go through a periodic model change, but with the move to EV, we anticipate the retooling and machine purchases will be supercharged across the whole industry," Gardner said. "It's like one giant model changeover. Our current sales remain steady, but we are preparing for major growth, including Korean company battery production projects in the U.S."

When gasoline prices spiked, Sodick staff looked for and found molding applications beyond under-the-hood components.

"Certainly EV is moving that way with battery components and sensor technology as well as ECUs [electrical control units]," Hampton said. "Water management-related parts are a great fit for Sodick machines — anything with thermal-controlled unit or thermal management keeping a battery cool, as well as water pumps, valves, impellers and waterproof connectors, including silicone connector seals. There's a lot our technology can do really well related to this area."

Meanwhile, at Absolute Haitian, Frohring said the automotive market has remained strong.

"New programs generally require some differentiation of machine configurations, including an increase in multicomponent models. EV production will push this as well," Frohring said.

The sale of large-tonnage machines is increasing, too, he added.

A large portion of Krauss-Maffei's business is related to the automotive market.

"The shift to electric vehicles continues and is good for new machines sales as it pushes suppliers to purchase new equipment for new vehicle launches," Stojkovic said. "However, due to higher interest rates, inflation, a possible recession and lack of computer chip availabilities in the market, we may experience a slowdown."

Next year, LS Mtron Injection Molding Machine North America will be established as a stand-alone entity. The business currently operates under its sister company, LS Tractor, which builds farm tractors in South Korea and assembles them at its Battleboro, N.C., headquarters.

Founded by South Korean tech giant LG Electronics for its own global molding operations, LS Mtron produces up to 2,800 machines per year for its internal network of companies and molders around the world.

The North American business unit will be headquartered Duluth, Ga.

"The company plans to add more staff throughout the U.S. in 2023 in sales and service," Gardner said.

LS Mtron also opened two new U.S. facilities: a new large-tonnage mold testing and tech center in Brownsville, Texas, and a parts and service center in San Diego.

In Connecticut, Preusse said Wittmann USA Plant 1 is being expanded by 11,000 square feet to handle more automation systems and Industry 4.0 work cell integration.

Sumitomo (SHI) Demag will invest in additional staffing and a facility upgrade in Suwanee, Ga., to better support a growing customer base in North America, Marchelletta said.

The latest personnel and facility investments increase the number of machines Sumitomo (SHI) Demag can configure for customers from U.S. inventory each year. The machine builder also will invest in process engineering personnel in the company's new Buffalo Grove, Ill., application center, where customer and partner events also are held.

"We are developing capabilities with partners to provide more turn-key solutions and automation," Marchelletta said. "Additional resources will be committed to medical, health care and consumer packaging segments."

Absolute Haitian invested in additional training locations and expanded customer service and parts support with a renovation project at its Ohio Tech Center. Also, Haitian International expanded with a new 27,000-square-meter (290,626-square-foot) facility that opened in Guadalajara, Mexico, in October, marking "the first time molding machines will be built in Mexico," Frohring said.

In 2022, Boy invested in alternative energy production and alternative heating systems to reduce costs for electricity and gas. Next year, investments are targeted at various projects for improving the technology of injection molding machines, Koorneef said.

Sodick-Plustech is growing, Hampton said, and has made solid investments in customer experiences through personnel additions and trade show participation, including K 2022 as a first-time exhibitor.

"We've also doubled our inventory by successfully navigating delays at ports," Hampton said.

In Kentucky, Stojkovic said Krauss-Maffei is continuing to improve its facility and focus on sustainability, particularly reprocessing efforts related to injection molding and extrusion compounding equipment.

About 176,000 visitors came to K 2022, a drop of about 21 percent compared with the last show in 2019. Although foot traffic was down, machine builders said K 2022 visitors who showed up were serious about investing in capital equipment.

"People are searching for eco-friendly technologies," Kubota said.

Marchelletta summed up K 2022 as "phenomenal" for Sumitomo (SHI) Demag and the industry.

"In-person is back and much needed," he said.

As a vice chair on the NPE operations committee, Marchelletta said he has a vested interest from both a company and overall industry perspective.

"I entered the show with somewhat low expectations. But I was pleasantly surprised in the number of attendees, not only from EU but from North America," Marchelletta said. "This was a great indication that our industry wants and needs the major in-person events after being absent for the last two years."

Frohring agreed and mentioned why many Chinese exhibitors and attendees didn't make it to K 2022.

"It was an excellent, well-paced show with a return to centralized meetings with larger global customers to review new technology on offer as well as for us to learn about their upcoming machinery requirements," Frohring said. "Obviously, attendance was slightly down but mostly due to missing China exhibitors and visitors due to quarantine policies still in place when returning to China. We were happy with the number of visitors from the U.S. and especially from Canada."

Krauss-Maffei's Stojkovic called K 2022 fantastic.

"It was great to meet with our customers and colleagues again in such a large, traditional format," he said. "It was hard to believe we were just coming out of a pandemic. Attendees across the board seemed optimistic, looking forward to a bright future."

Kanz agreed, adding, "When I see how many visitors we had on the Arburg stand from the U.S., I'd say we were very pleased. We took 12 of our U.S.-based employees to the show, and they were all very busy. It was really great."

K 2022 surprised Engel staff in a positive way with an upbeat business vibe that continues, according to Engleder.

"The mood is very good and is boosting the industry. We hope that this will have a positive influence on further development," he said. "As expected, the number of visitors was lower than three years ago, but the quality of the discussions was on the same level. Many customers brought concrete project inquiries with them to Düsseldorf. K confirmed that we are hitting the mark with our focus on energy efficiency, sustainability and digitalization. With our innovations, we support our customers in solving the current burning challenges and further improving their competitive position — in line with Engel's trade fair motto: Be the first."

Koorneef said K 2022 let the industry show the unbreakable future of plastics.

"There is and there will be no alternative material which can beat plastics," the Boy Machines president said. "Injection molding will be necessary today and in the future to serve the needs of the world's population. We are strongly convinced that there will be a good future for plastics and injection molding."

Engleder agrees.

"At K 2022, the plastics industry showed how serious it is about climate neutrality and the circular economy," he said. "Solutions were presented that are already being used successfully today. The industry is standing together. This is exactly what is needed to close further material cycles, reduce CO2 emissions and to give back our industry a positive image."

The pandemic changed acceptable business meeting protocols, and two years later there's no going back to the way it was before March 2020.

Frohring said Absolute Haitian's way of conducting business is about 90 percent back to a pre-pandemic normal.

"But we have learned the value of also being able to be virtual through Zoom, Teams and GoTo Meeting calls, especially when requirements have become expedited," he said. "Some travel is still difficult due to airlines and service industries catching up to demand, replacing retired employees or employees changing careers because of the pandemic."

At Krauss-Maffei, Stojkovic said traveling and in-person meetings are becoming more prevalent.

"Our customers are pushing for personnel to be back in the office," he added. "However, we see there will be a balance between in-person and virtual meetings because of efficiencies and lower costs associated, which the pandemic taught us."

The Wittmann staff aims for in-person meetings, but Sonny Morneault, vice president of sales and marketing, said there has been no consistency to it.

"We have been tracking it since the middle of 2021. Just as we think we have good momentum, another flare-up hits and we are asked not to come," he said of customers dealing with COVID-19. "You would think that would mean more virtual meetings for sales pitches, but that's not the case either. Of course we are doing much more virtually than we have in the past, but the number does not make up for the number of lost in-person visits. So, what's it all mean? We think it means customers are staying with their incumbent suppliers more than ever, making penetrating new markets and customers very difficult."

Machine builders need unique or even potentially game-changing products to get a foot in some doors, Morneault said, pointing to Wittmann's integrated 4.0 solutions. "That can substantially help a molder's productivity. Then the customer makes an exception to the rule to see you," Morneault said.

Many companies realized the efficiency of having at least a portion of their business be handled virtually, according to Sumitomo (SHI) Demag's Marchelletta.

"This is certain to remain, especially for larger global companies," he said. "However, nothing compares to what an in-person visit can offer. We encourage our support staff to take every advantage of meeting with our customers in person to walk the manufacturing floor and see first-hand the challenges they face. This helps us to better respond to their needs."

Nissei America staff continues to meet colleagues on the web.

"We think it is a good change in terms of using time more effectively," Kubota said.

At LS Mtron, business as usual now means in-person meetings for important and complex projects, but it also includes virtual meetings.

"We are also using our experience gained during the pandemic in conducting virtual meetings to supplement and have easier and more frequent check-ins and shorter project update meetings," Gardner said.

The same goes for Sodick.

"We launched our popular webinar series, "Sodick and Friends," during the pandemic, but it's been such a success that we're continuing the series," Hampton said.

While personal contacts remain very important, Engleder said, "Nevertheless, we are convinced that the future will be hybrid. Virtual formats bring great advantages, and we use them for the benefit of our customers. However, not as a replacement, but as a supplement to face-to-face meetings."

In September, the Office of the U.S. Trade Representative (USTR) announced Section 301 tariffs imposed on Chinese goods in 2018 will be extended while the agency conducts a more comprehensive review of their necessity.

The tariffs were imposed after USTR determined China's acts, policies and practices related to technology transfer, intellectual property and innovation were "unreasonable or discriminatory and burdened or restricted U.S. commerce."

The Trump Administration imposed four rounds, including 25 percent tariffs on Chinese imports of injection molding machines, extruders, blow molding machines, thermoformers, machine beds, platens and hydraulic assemblies, as well as molds for injection and compression molding. The tariffs currently apply to about $375 billion in annual U.S. imports of Chinese merchandise.

USTR said its latest tariff review would include written comments. Domestic stakeholders who have benefited from the tariffs responded, including about 60 of the 200 members of the American Mold Builders Association.

Many machine builders benefit, too, from U.S. trade policies but need to take other steps to be competitive, according to LS Mtron's Gardner.

"As a U.S. ally, South Korea enjoys 0 percent tariffs and 0 percent import duties on injection molding machines imported into the USA. That being said, Chinese machines continue to be the lower-cost competitors in the market," Gardner said. "We just have to compete on specifications, quality and supply chain security."

When the tariffs were first imposed, Absolute Haitian, which sells presses made in China by Haitian, minimized the effects with a multiprong approach that included reducing prices and lowering profit margin to minimize the impact on customers. The tariffs still aren't hampering sales.

"The times are different than 2018," Frohring said. "Haitian is a global company, 25 percent publicly traded and 75 percent private, totally independent from any government."

Engel also benefits from its global presence with production plants on three continents, Engleder said.

Machine builders and their colleagues in the plastics industry are bracing for high interest rates and higher production, labor and shipping costs.

"We think there may be some plant closures and consolidations within the molding community," Frohring said.

The conditions also are ripe for Absolute Haitian's other business activities to grow.

"Our automation division, Absolute Robot Inc., will thrive in 2023 when customers plan to solve issues related to lack of skilled labor and cost of labor," Frohring said.

Boy took steps to improve resilience against major impact related to power outages and gas and material shortages.

"Our main problem would be that several of our main suppliers would be not able to deliver as they should, and if that would be with very sensitive parts, we would be not able to compensate this. Therefore we enlarged our stock automatically for critical parts," Koorneef said.

At LS Mtron, Gardner said, "Certainly, the threat of a recession is looming over us, but manufacturing activity, driven in part by reshoring, seems like it may be a bright spot for keeping active. Geopolitical threats are also a concern, with a possible silver lining for injection molding machine manufacturers making their machines in U.S.-allied countries."

At Sumitomo (SHI) Demag, Marchelletta pointed to rising costs, labor shortages, shipping/supply chain delays, anti-plastics political agendas and economic uncertainty.

"All of which are outside of our direct control. But we must help our customers navigate these current and future challenges," he said. "We have taken a number of measures to help our customers face these future headwinds. This has included an increased stocking program to ensure on-time deliveries, increased training offerings to educate their staff, fleet management services to ensure their aging equipment remains reliable and enhanced application support to improve their process efficiency."

At Engel, company officials are concerned about geopolitical developments, but Engleder said the most significant challenges still include supply chain disruption and massive increases in energy and material prices.

Sodick's Hampton agreed and also pointed to workforce issues.

"We try to keep forecasts as accurate as possible and to be proactive. But there's no crystal ball, especially related to materials and parts," Hampton said. "Our factory is still at full production. Obviously, labor is a big consideration, and everyone has their share of concerns, but we've been running near full capacity. If anything, we restricted some of the processes to accommodate less labor."

Koorneef expects next year to be "slightly lower" than 2022 for injection molding machine sales.

Hillenbrand officials are concerned about customer delays negatively impacting orders and revenue through at least the first half of fiscal year 2023. In response, discretionary spending will be contained; only critical positions will be filled and investments will be prioritized.

Nissei America's Kubota offers a simple outlook: "It may not be [as] good as 2022. … We are hoping for the automotive industry to pick up."

So is Sumitomo (SHI) Demag staff: "We plan to continue growing with our packaging and medical customers. We're also optimistic that the automotive segment could start to see some rebound later in the year with new developments driven by ZEVs [zero-emission vehicles]. We do also expect a continuing investment with ZEV production into 2024."

Gardner sees opportunities to provide LS Mtron injection molding machines for the e-mobility, EV and battery-type businesses.

"The LS group has its own molding operations and related companies for this type of work, including LS Automotive and LS e-Mobility. The strong South Korean market share in EV battery systems, including LG Energy Solutions, SK and others, will give us a good chance to compete for selling our machines to these projects," Gardner said.

At Plustech, Hampton expects 2023 to be stable, strong and better in terms of inventory.

"There are so many new and exotic materials and applications we look forward to working with, for parts like implantable medical devices," he added. "There's so much innovation, and Sodick lends itself nicely to whatever's next. We can't wait."

At Engel, Engleder said machine builders deliver the technologies that achieve sustainability goals and those investments will continue to be made despite geopolitical developments and other factors fueling uncertainty.

"Due to the recession, Engel expects demand in North America to slacken in the short term," Engleder said. "However, the market offers the best conditions for further strong growth in the medium to long term. Growth in electric mobility is contributing to this, as is the increasing use of recycled materials in plastic packaging and further applications, among other things."

Absolute Haitian's Frohring and Sumitomo (SHI) Demag's Marchelletta are cautiously optimistic about 2023.

"Machine replacement and automation will continue to lead the way," Frohring said. "Expansion in the U.S. from overseas companies to solve logistical issues also will be key. These movements are already underway."

Krauss-Maffei's Stojkovic said he doesn't expect the logistics packaging market to keep the pace it had in 2021 and 2022, but automotive is trending upward and the medical and packing demand remains strong.

"Barring a global catastrophe, 2023 should also be another strong year for equipment sales," he added.

Marchelletta said the company is fortunate to be aligned with several customers and markets that are somewhat recession-proof and can adapt.

"However, there are still many economic and political variables that could impact the automotive, electronics and nonessential-type products," he added. "There are certainly talks of a recession and other challenges. Having been in the plastics industry for over 25 years, I've survived a few recessions and other challenges. I'm optimistic our current challenges are a bit different."

He went on to explain what's changed: "Unlike previous events, customers are still buying and growing their business, fleets are being upgraded, new projects are being quoted, unemployment is at record lows and new products are being developed in all segments of medical, packaging, electronics and automotive," Marchelletta said. "I'm confident our industry will come out of this in a very strong position."