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October 08, 2020 04:42 PM

Automotive slow but medical a bright spot for Engel

Catherine Kavanaugh
Staff Writer
Plastics News Staff
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    Engleder

    Injection molding machine builder Engel Austria GmbH is looking at back-to-back annual sales declines of 20 percent, in part because automotive manufacturing slowdowns caused by the pandemic exacerbated other problems in that market.

    The 75-year-old company saw sales of 1.3 billion euros ($1.54 billion) for its 2019-20 fiscal year that ended in March, CEO Stefan Engleder said at an Oct. 8 virtual news conference.

    "The outlook for this fiscal year, as we are halfway through, we estimate will decline again by approximately 20 percent," Engleder said.

    Company officials said machine orders from automakers had already slowed because of doubts about future powertrain concepts as well as uncertainty about the fallout from the Dieselgate scandal, where cars were rigged to pass emissions tests.

    "Investment has been held back by the OEMs because they're still threatened with high penalty out of the diesel scandal," Chief Sales Officer Christoph Steger said. "And there's overcapacity in production facilities all over the world regarding automotive. We don't see a very near recovery in terms of increased market demand for products that support the production of cars and trucks."

    The family-owned business based in Schwertberg, Austria, also saw decreased machine sales to the teletronics industry because consumers are hanging on to their phones and televisions longer.

    However, Engel officials said packaging, medical and technical molding are proving to be stable and growing markets.

    "The technical molding industry combines infrastructure, toys, home appliances and tools. It has remained comparatively stable in its demand, and it has become today the biggest share in Engel's portfolio," Steger said.

    The stay-at-home trend is helping, he added.

    "It's probably not only a trend but an obligation. When staying at home, people start do-it-yourself projects and buy tools and other products," Steger said.

    The packaging market not only remains stable for Engel through the COVID-19 crisis, but also the CSO said it highlights the important contribution of plastics in regards to hygiene and the delivery of goods.

    The ongoing public discourse about plastics hasn't been very productive, he added.

    "We call it plastic bashing, not because we don't see the problems plastics are causing in our environment, but basically because everything is mixed up," Steger said. "There's no objective or constructive discussion ongoing. It's toward a bashing movement."

    Steger

    A couple bright spots for Engel include the medical market and truck/SUV segment of the auto market. Medical business has "grown substantially" with customers investing in their facilities to meet high demand for respiratory and testing devices, Steger said.

    Also, there's "huge demand" for trucks and SUVs even as sedan sales decline.

    "The industry isn't booming, but it's stable and it's growing," Steger said.

    Company officials expect the automotive market recovery to be more than a matter of months, but they see a strong role for plastics.

    "No matter which drive concept succeeds, it is leading to new applications and innovative technologies because at the end of the day, the lighter the car is, the farther it can go whether it's a hybrid car, all-electric car or still a combustion engine car," Steger said.

    Engel officials also put a spotlight on new technology, including the e-mac 130, which is a compact machine with a clamp force of 130 tons, and an all-electric micromolding machine with an LSR injection unit to produce parts with a shot weight below 0.1 grams.

    "We believe there is a niche for this type of application, especially in the automotive sector or medical field. We have a lot more sensors and we need more seals, and LSR is a big megatrend anyway," Engleder said.

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