Engel aims to bolster customers' resilience in challenging times

"Resilient entrepreneurship is what the industry needs," was the rallying cry of Engel CEO Stefan Engleder at the news conference on the opening day of Fakuma 2023.

It was a first day that, he said, that saw high-quality traffic at the Engel booth, although the fair seemed in general to be slightly less bustling than usual.

The present economic and social conditions have combined to create a great deal of uncertainty in the market. From wars, weak demand and supply chain issues to labor shortages, inflation and high energy costs, the industry has been buffeted by adverse conditions and challenging circumstances.

"It is why our motto for this year's Fakuma is 'Get connected.' Because it is in times like this that strong cooperation is needed," Engleder explained.

Engel, he said, is directing its focus in particular on small and medium-sized companies, as these have been especially hard-hit by the economic and political developments in Europe. At Fakuma, the company is demonstrating how close-to-standard solutions can be implemented using proven Engel technology – and how this can help to improve a company's resilience despite the uncertain situation.

Engel, too, has been impacted by the changing market conditions. The company will in all likelihood close the current fiscal year "just slightly down," Engleder said.

While the company was able to process all of the orders from the previous year, the level of incoming orders has for months been very low. The impact is making itself felt particularly strongly in the last quarter of the current fiscal year.

Engleder said that sales revenues will therefore be slightly less than the previous year's level of 1.7 billion euros. At 50 percent, Europe represents Engel's largest market, with the Americas accounting for 30 percent, Asia for 17 percent and 3 percent coming from other regions.

For the coming months, the company anticipates a significant decline in global market volumes.

"This will definitely be in the double-digit range compared with the previous year — and be particularly pronounced in Europe: high energy and personnel costs are causing investments to be shifted to other markets, such as the USA and other countries outside Europe," the Engel CEO noted.

A noticeable trend, he added, is that Asian manufacturers are increasingly growing their share of the Western markets, a phenomenon that is particularly noticeable in the automotive sector.

"If we look at Europe, we already have a frown on our face," said Engleder. "What is positive, however, is that Engel is growing its share of what is a shrinking European market." This is primarily due to a number of large orders received by the company.

He believes that the European sales market is facing a structural change in the medium to long term, mainly because of an even more fundamental problem.

"Even if the energy prices drop again one day, and the Ukraine war comes to an end, we have a substantial problem in Europe that has come to stay: the shortage of skilled workers," he explained. "It's a lack of workers, leading to an expensive workforce combined with a new mood in the industry — or at least in the Central European region — that is causing many SMEs to simply close down. They are not going bankrupt, they are simply stopping, because they feel it is no longer worth the effort and investment. It's a negative trend and I am sorry to see it, because SMEs are the backbone of our industry."

Other customers are looking outside Europe, for example to Turkey and North Africa, to grow their operations, a development to which Engel, with its global network, can respond. "Our global presence strengthens us. It has made us very versatile as a company and given us the opportunity to follow our customers into the markets where they are based," Engleder said.

The mood in the Americas is somewhat brighter, with North America and some parts of South America — Mexico above all: "the country is booming," Engleder said, exhibiting a healthy growth. Particularly the medical as well as the teletronics and technical molding divisions are doing well in the regions, driven on the one hand by diabetes and obesity care and on the other by the increased use of recycled materials.

Across the board, the recovery of the markets in Asia is progressing more slowly than anticipated. Foreign investment levels in China are declining, with moderate growth forecast for next year. Engel's Wintec brand saw a stabilization in the order situation in the last six months of the year, although orders remained significantly below the level of the previous year. However, projects are projected to increase in the China region. Chinese investments in South-East Asia may also buoy up sales in the region.

As a company, Engel takes pride in its achievements in terms of sustainability. It earned a platinum EcoVadis sustainability score in the autumn of 2023, placing itself among the top 1 percent of the world's most sustainable companies.

"It shows that even in challenging times, the company is sticking to its principles," declared Engleder.

This summer, Engel also announced its commitment to the science-based target initiative (sbti) — as one of the first companies in injection molding machine manufacturing to do so — and it has set science-based targets for reducing its greenhouse gas emissions to help meet the Paris Climate Agreement. Among other things, the company uses one hundred percent green electricity in all of its Austrian plants, a steadily higher proportion of which is generated by the photovoltaic systems it has invested in. Proprietary technologies are used to process recycled plastic waste into high-quality new products is a further building block.

The commitment to SBTi is "our way of taking the next logical step," Engleder clarified. "We are offering our customers the best possible transparency and benchmarking in terms of our climate protection activities by ensuring independent verification in line with internationally recognized standards."

In concrete terms, Engel is reducing all Scope 1 and Scope 2 emissions by 50 percent and Scope 3 emissions by 42 percent by 2030, compared with 2022.

"In our opinion, the greatest leverage for reducing greenhouse gases, beyond material- and energy-efficient solutions and the expansion of renewable energy sources, can primarily be achieved by digitalizing production processes and establishing a circular economy," Engleder said.

"For this fiscal year, we have budgeted 10 million euros for the expansion of our own renewable energy production alone. Beyond this, we are increasingly focusing our development activities on efficient and recyclable solutions."

Asked about the advances the company is showing in Friedrichshafen, Engleder pointed to a number of solutions for sustainability, that he described as "close to standard."

"In the segment of two-platen injection molding machines, we are exhibiting an application that supports a variety of use cases. We manufacture automotive trims for the vehicle interior made of a [polypropylene] compound. Using 30 percent recycled material, this application aims at the EU directive currently under discussion, which envisages a 25 percent share of PCR (post-consumer recyclate) in cars by 2030."

Another example is the e-motion packaging application, also running at the stand, showing that thin-wall performance and energy efficiency "actually can go hand in hand."

"An all-electric drive and ideal temperature control add up to potential energy savings of around 30 percent compared to hybrid machines. The 1.3-liter pail, which weighs just over 26 grams, is being produced with maximum energy efficiency. The e-motion is also equipped with an assistance system from the iQ family. iQ motion control cuts cycle times by 0.2 seconds – another source of potential savings."

He also called attention to the suite of assistant systems Engel has developed to enhance the processability of bio-based and recycled materials. The difficulty in using materials that are not virgin or prime grades is that these often suffer from fluctuating material properties from batch to batch.

"We have developed assistant systems which ensure that the final product properties are constant by automatically adapting process parameters during the injection molding process. Simply put: with our assistant systems, injection moulders can process recycled materials like virgin materials, yielding the same high-quality output."

He added that there are two other processes that will also play a major role in closing the material circle.

"These are: processing recycled PET for packaging applications on the one side and feeding mostly unprocessed "waste" technical thermoplastics and polyolefins directly into an injection molding process on the other. Engel has been developing and continues to develop solutions for both.

Two further products shown by the company are the new CC300 plus control unit, with improved ergonomics and a new pushbutton panel for haptic feedback. The new unit was developed in response to operator feedback for frequent mold set-up operations and frequent manual operation.

Engel also launched its new part finder at the show: an effective tool for plastics processors in everyday operations providing a simple, time-saving solution to improve machine availability and to boost production efficiency, for which a smartphone is all that is needed. The path finder lets users identify and order virtually any part of an Engel injection molding machine in an uncomplicated way and is available free of charge as a feature of the Engel e-connect customer portal.

The tool offers various options for identifying parts, including a convenient, image-based spare parts search function. Users take a picture of the part in question and define the image section to be used for the search.

Alternatively, images can be mailed to the purchasing department. The purchasing coordinator can then use the image file in part finder to identify the part.

The app can even recognize dirty, worn or defective parts of older machines — from cables to pumps. The part finder's database includes injection molding machines which are up to 20 years old, along with other systems.

It's just another way for the company to get connected with its customers, "and they with us," Engleder said.