Blow molding sector packs in pandemic-relief sales

From travel-size hand gels to industrial-size disinfectants and food-grade barrels, the lid blew off demand for many kinds of containers with the spread of the novel coronavirus.

Blow molding machine builders got to work.

The increased need for squeeze bottles, spray bottles and single-use containers for goods like sanitizers, household cleaners and food products was immediate. Everyone started cleaning their hands, wiping off their surrounding surfaces and dining in more often to fend off the respiratory illness.

Although shoppers left store shelves bare in an early panic-buying frenzy, manufacturers ramped up production of the highly sought goods, often by purchasing more blow molding machines to increase capacity.

The pandemic gave Kautex Machines Inc., and most, if not all, the industry, an "opportunity to demonstrate what we are made of and how adaptable we are as an organization," according to Admir Dobraca, CEO of the North Branch, N.J.,-based subsidiary of Kautex Maschinenbau since February.

Dobraca succeeded Bill Farrant, who had managed the North American site for a decade for Kautex, which builds extrusion blow molding machines for the automotive and, more recently, the packaging markets. Kautex began its push into packaging in earnest this year after a majority shareholder provided "double-digit millions of euros" to invest in pharmaceutical and health care packaging.

Dobraca, who previously was president and CEO of Retal PA LLC and a regional manager of beverage packaging for Husky Injection Molding Systems, said 2020 has been a year of challenges and achievements at Kautex.

"Despite the downturn in automotive markets, we have met our budgets by shifting focus to consumer and industrial packaging. Results have been astonishing," Dobraca said in an email.

At W. Amsler Equipment Inc. in Bolton, Ontario, a manufacturer of all-electric linear PET stretch blow molding equipment, orders started pouring in for bottle-making machines in the February to March time frame, CEO Bruce Coxhead said in a phone interview.

The company's machines range from one to six cavities with outputs of 1,500-10,000 bottles per hour.

"Business went topsy-turvy because of COVID-19," Coxhead said. "I sold two machines from my house on a Saturday night off my shop floor. That's how crazy the market demand went. The hand sanitizer market has shot up, but I think it's plateaued and now I'm seeing it start to stabilize to the 20-28/410 neck finishes. We're starting to see runs on those sizes and some scarcity of preforms."

Amsler was sold to Stans, Switzerland-based Benpac Holding AG in January 2020. Coxhead said a formal announcement of that deal is expected in coming weeks.

Fred Piercy, president and general manager of R&B Plastics Machinery LLC in Saline, Mich., said changes in cleaning and home habits, such as grocery shopping and cooking, also increased demand for blow molding machines.

"People staying at home are buying more products to cook at home, and many of those come in plastic packaging," Piercy said in a phone interview. "Food and personal care applications have increased."

At Uniloy Inc. in Tecumseh, Mich., President and CEO Brian Marston said in an email: "We saw increased quotes and sales for our mold making team with regard to wipes canisters applications to satisfy the incredible demand for Lysol- and Clorox-type sanitizing wipes. There were also increases in parts, molds and machine inquiries for companies entering or transitioning to hand sanitizer and cleaning product applications."

Founded in 1963, Uniloy had changed ownership in 2019 after 21 years as a unit of Milacron Holdings Corp. Marston said his team managed to transition to an independent company "well ahead" of schedule and then handle needs of customers under pressure to keep store shelves stocked.

"We remained operating and supporting customers during the pandemic, and that has supported a strong view on 2021," Martson said. "All products are in demand with a good backlog going into 2021 with injection blow being the front-runner. Our mold making operation has also increased year over year, and we have made investments and efficiency improvements to reduce lead times."

The pandemic also has underscored the fact that single-use plastics have a place in society, Piercy said.

"And no matter what, it's important to maintain that because of the level of hygiene and cleanliness single-use plastics offer," Piercy said. "In my opinion, the pandemic has solidified the fact you're not going to be able to completely eliminate single-use packages and the best opportunity to minimize the impact on the environment is for people to increase their recycling."

In the meantime, companies are working hard to make packaging from recyclable materials, Piercy said.

The blow molding sector should remain busy in 2021 and perhaps beyond, according to Steven Rocheleau, president of Rocheleau Tool & Die Co. Inc. in Fitchburg, Mass.

"2020 has been an interesting year to say the least, not quite what anyone expected," Rocheleau said in an email. "Heading into 2021, we are deeply backlogged and see demand in the foreseeable future remaining high."

The increased sales are bittersweet, with much of the demand driven by a pandemic that has killed more than 1.5 million people globally, including nearly 300,000 Americans.

"The reality of the pandemic is that it completely shut down some business and dramatically expanded others," Rocheleau said. "For blow molding, the demand created for packaging of all things related to sanitizing, as well as medical packaging and devices used for COVID-19 testing, are not going away anytime soon."

Dobraca agreed, saying, "while some markets continue experiencing hardship, such as automotive, others have tremendous demand increases, especially in packaging, pharmaceutical, specialty and outdoor sporting goods. Consequently, Kautex had to adopt to these changes and that had to be done in no time in order to meet customer demands."

Rocheleau Tool, too. The company has ordered dozens of Nordson Corp.'s Xaloy-brand screws and barrels to equip blow molding machines to produce pipettes for COVID-19 test procedures. Manufacturers of medical testing products have invested heavily to expand production of plastic laboratory consumables to meet global demand for COVID-19 testing, including low density polyethylene pipettes.

"We are building equipment for pipette production in record time," Rocheleau said. "Each machine includes components from multiple vendors, and Nordson has provided us with confidence by delivering screws and barrels from its Austintown, Ohio, facility ahead of schedule, enabling us to focus on other issues that demand attention."

At the start of 2020, everything at Kautex was going according to plan, even with a "very flat" second quarter, Dobraca said.

"However, the packaging market started showing healthy trends toward [the] tail end of Q2 and it remains to lead the overall demand," he added.

Piercy said 2020 got off to a slow start on the machinery side for R&B but immediately picked up steam after the pandemic was declared in March.

"The second, third and fourth quarters were all pretty steady for business. We continued to put several machines — all electric blow molding shuttle machines — into the market," Piercy said. "It was [a] pretty good year in terms of demand for new machines and a lot of it was COVID-19 related. These are containers for canisters, so you can assume some wipes and bottles for home and personal care use. I'm sure a lot of it was cleaning products."

Amsler saw machine sales double in 2020. Coxhead is feeling just as optimistic about next year.

"We will double machine sales again in 2021. We already have customers lined for 3/4 of those machines," Coxhead said, adding that the machines are mostly bound for Americas and Caribbean.

Gary Carr, vice president of sales for Williamston, Mich.-based Bekum America, said the North American blow molding market has seen unprecedented demand.

"Blow molders that service 'essential products,' such as medical/pharma, food and beverage, and household chemical markets, are inundated with bottle orders, particularly for cleaning, sanitizing and disinfecting products," Carr said in an email. "Once again, the stability of the blow molding market — even in crisis — is aided by consumer need for safe, inexpensive and efficient packaging."

No doubt the pandemic caused demand to increase steeply, and bittersweetly, for new blow molding machines and rebuilds. However, Coxhead said, other factors came into play when Amsler's sales increased in 2019 going into 2020.

The company, which was founded in 1994 by Werner Amsler, has improved its machine designs with new controls and better energy consumption.

"Our new machines are about 40 percent more efficient than the originals Werner built in terms of oven controls," Coxhead said.

At Uniloy for 2020, Marston said Q1 was on track until COVID-19 caused a significant slow in Q2 that was followed by a steady increase in the third quarter and a solid fourth quarter.

"We will end 2020 slightly down vs. our pre-COVID plan, and 2021 is looking to get us back on track," Marston said.

At Kautex, a company record was set in 2020 in terms of new project and duct launches and new technology deployments, Dobraca said.

"The increased demand on sanitizing product containers offered us an opportunity to rethink certain product lead times, allowing us to engineer, build and deliver new systems in record times, never seen before," he explained.

However, Kautex's new products and technology might not be on display at NPE2021.

"We will most likely not take part in 2021 NPE as we expect a major downturn in visitors," Dobraca said.

Kautex has no intentions at this point to participate in a hybrid trade show either. Instead, the company has plans for virtual programs throughout 2021 to update customers on technology and services.

The first virtual exhibition is scheduled for mid-February and others will follow throughout the year.

"Trade show cancellations overall in 2020 had a great potential of hurting our projected sales plans," Dobraca said. "However, thanks to our brilliant, courageous and innovative team efforts, we adopted very quickly and managed to organize virtual group events, individual tours and factory acceptance tests around customer schedules and around the globe. As a result, we actually improved the customer experience and enabled our organization to adopt to customer needs and wants."

Meanwhile, Amsler is booked for the Bottle Zone, where it will demonstrate a four-cavity machine with the latest controls. The company is not planning any hybrid or virtual event. Coxhead said he is looking to partner with another company on an NPE project. At NPE2018, his partner was Orlando Brewing in Florida for beer that was served in amber long-neck, 12-ounce PET bottles with barrier technology.

At Amsler, company officials had a policy against commercial blow molding in-house so as not to compete against its customers. However, it's 2020, and in the new normal, the business will now blow mold under certain conditions for customers experiencing problems amid the health crisis.

"For our customers, if you're down, how do we get you up and running as fast as possible? ... If I have to put your molds in my machines, I'll do it," Coxhead said, adding Amsler has been running 24/7 for the last couple of months. The machine builder will blow mold for customers experiencing a production emergency, dealing with a new product in development or launching a new package.

Coxhead said Amsler also has an extensive supply of spare parts in Bolton for existing machines and the new designs, and it will have access to a service team in the U.S. and Mexico as part of the Benpac organization.

In addition, Amsler is developing more relations with preform suppliers to help fill its project pipeline, Coxhead said.

The company will move into a new technical center in Bolton next year, about a half-mile from its current site.

"We will be between two preform machine makers, which is where I want to be," Coxhead said of Husky Injection Molding Systems Ltd., which is also in Bolton, and Niigon Machines Ltd., which is 15 miles away in Vaughan, Ontario.

Both companies were started by industrialist Robert Schad. He still owns Niigon, which was previously called Athena Automation Ltd.

"At the technical center, we can jump into new products we didn't dream about before, like packages for shelf-stable milk," Coxhead said. "I see a slow move to PET from HDPE because of the aesthetics and the strength factor. PET outweighs HDPE so it's a lighter weight bottle. And, it's sexy. Think of a bottle of mouthwash in PET verses HDPE."

At Uniloy, Marston said the parts business remained above the prior year and will continue into 2021.

"Our customer base needed to have their current assets operating to absorb the increased demand," he added. "Service was slow early this year with the restrictions that were placed on travel, but our Uni-Remote offering that allows us to remotely support our customers has proven to be very valuable."

For 2021, the company plans to make a significant investment in its Uniloy University Lab, Marston said. The size of the existing lab will be doubled to 3,500 square feet to house reciprocating screw, injection blow and shuttle machines for internal and customer testing, supplier trials and training.

"We're excited to further our testing of bioresins on all of our machine platforms," Marston said.

Executives of blow molding machine building companies said the contentious presidential election had little effect on business unlike trade regulations, namely a 25 percent tax on $370 billion worth of Chinese imports since July 2018.

"The imposed tariffs on goods coming from China continue to present a challenge in certain markets and we are like many others in waiting patterns to see if this will be more permanent rule or a short-term exception before making lasting changes," Dobraca said.

Other companies saw clear benefits.

"Tariffs helped," Coxhead said. "It made me more competitive in the U.S. market against the Asians."

Piercy said he has a positive view of the tariffs.

"There are some Chinese machines offered at very low costs, so for us in the blow molding segment in general, I do believe it was an opportunity to level the playing field," he said.

Piercy also said tariffs contributed to continued reshoring of some products.

"It was strong in blow molding in containers," he added. "Because of the logistics and challenges of China, some even pre-pandemic, we're seeing a shift of large industrial blow molding demand for supplied equipment."

The large industrial demand is being driven, in part, by consumers buying more home and garden wares and recreational products.

"A lot of people didn't take traditional vacations and there was a huge uptick in the outdoor market — a certain part of which is tied to the larger industrial machines. Some of that was reshored back from China," Piercy said.

Marston said Uniloy has seen less competitive pressure from Asian imports on machinery and parts.

"This may be indicative of a reshoring, but time will determine the reality of this scenario," he added.

Carr said Bekum officials understand the benefits of U.S. manufacturing. The subsidiary of German maker of extrusion blow molding machinery Bekum Maschinenfabriken GmbH has had a site in Michigan for 40 years and continues to invest in it.

"Bekum's commitment to domestic manufacturing of blow molding machinery is evidenced by the 40,000-square-foot expansion of the Williamston facility's machine assembly floor with a projected completion date in the spring of 2021," Carr said.

Bekum is also adding 7,400 square feet of office space. The expansion will create 20 jobs, bringing the employee count to 150.

From now on, more blow molding machines will be cranking out containers for personal and home sanitization, according to Piercy.

"The push on cleanliness and hygiene is here to stay," he said.

And, since many of the containers are HDPE, Piercy said they can be easily recycled.

Rocheleau added, "The challenges around plastics, pollution, the environment and sustainability remain, and the pressure to find solutions to those issues continue to be important."

Since Uniloy has a significant PET business within its mold making product line, Marston said company officials monitor any restrictions or threats to PET products. The company also has been working with some customers on beverage containers utilizing alternative materials to PET. Post-consumer recycled (PCR) content is a focus.

"Uniloy has in development several new technologies to include PCR and biomaterials in our process to address the presumed pressure on the plastics industry in the future," Marston said.

Rocheleau also pointed to the trend to support products that people buy for their homes and at home consumption.

"With so much more time spent at home rather than traveling and eating out, there has been a shift in demand for consumer packaging compared to commercial packaging," Rocheleau said.

Coxhead expects hot-fill PET will gain in popularity.

"In Canada, we put milk in plastic bags. It works for us," he said. "I see a lot of growth in the single-serve PET for milk, and I see a swing away from the HDPE for milk because of clarity."

Amsler also has four cannabis packaging projects that involve barrier technology.

"People are putting cannabis in everything from lip balms to supplements. It's another market to look at," Coxhead said.

So is the rise of vodkas in PET, along with rums and other party drinks and even some craft beers and wine. A PET growler costs less than a glass one and it doesn't break, can be taken to the beach and can be reused 17 times before the shelf life expires.

"We've had a lot of fun doing some of these projects," Coxhead said.

Uniloy, which has a strong presence in the food, beverage, personal care and pharmaceutical markets, has recently been looking at getting its high-output technology into the agricultural, lubricants and chemical markets.

"These markets are showing renewed vitality," Marston said.

Although 2020 wasn't R&B Machinery's best year, it was solid, Piercy said, and he expects the next two years to be steady for plastics machinery businesses for mainly blow molding.

For 2021, R&B has "very solid" bookings into the first two quarters, he added.

"Again, it's primarily driven to the pandemic," Piercy said. "Overall, the blow molding segment generally was pretty saturated with capacity prior to this push from COVID and the demand for containers."

Piercy summed up his outlook for the next 18-24 months as "pretty steady."

At Kautex, Dobraca is cautiously optimistic.

"On one hand, we see increased demand in packaging, pharmaceutical and specialty, but we also see complete stagnation in automotive," he said.

New product launches will help increase Kautex's presence in packaging, Dobraca added.

"2021 is expected to be another year of growth at Kautex, especially due to our ongoing launch of new and updated platforms in packaging and specialty market overall," he said.

Carr agreed: "Despite all the negative impacts of COVID-19, bottle demand with the associated need for blow molding equipment has grown significantly and it appears that it will continue well into 2021."