Extruder builders expect continued growth in 2022

Extruder builders kept up their strong pace of production to meet pandemic-related needs for food packaging, medical tubing and utility conduit as well as decking to work and entertain at home.

Their customers that manufacture plastic pipe for municipal infrastructure and residential drinking water lines also will be busier with the passage of the $1 trillion Infrastructure Investment and Jobs Act.

More than $55 billion will go toward improving tap water infrastructure throughout the United States. Crumbling water mains and lead-contaminated pipes need to be replaced and pipe extruded from PVC and polyethylene will compete against the traditional materials.

Machine builders like Lebanon, Ore.-based Entek Manufacturing Inc. are experiencing record growth and need another facility to handle demand. The company is investing $10 million and hiring 50 people at a new manufacturing and engineering plant in Henderson, Nev.

Entek's customers process natural fiber-plastic composites for products like Fiberon decking and offer pelletizing, custom compounding, specialty sheet lines, food and medical applications and plastics recycling.

"Compounding continues to be strong for us. The continued investment in consumer goods made from recycled plastics are continuing to push demand for our products," Entek President Kimberly Medford said.

Officials at Windmoeller & Hoelscher Corp., which builds extruders for manufacturers of flexible packaging, particularly food, also said 2021 is going to be another record year for their North American operations.

"Many of our customers work with Amazon, which is booming, so this is also driving our business," said Andrew Wheeler, president of W&H North America.

At Hosokawa Alpine American Inc. in Northborough, Mass., which makes blown film extrusion equipment for flexible packaging, President David Nunes said business is "better than ever."

"2021 was a continuation of steady and upward sales since 2010," Nunes said.

Officials at Davis-Standard LLC also report very strong business in 2021. They are seeing strength in demand across the globe in many end markets, including cables for power distribution and communication, packaging, medical, and building and construction products.

"The strength seen in 2021 began with stronger demand in the fourth quarter of 2020. As a result, we expect 2021 orders up over 50 percent vs. 2020," said Jim Murphy, president and CEO of Davis-Standard.

At Battenfeld-Cincinnati USA, President and CEO Paul Godwin described 2021 as a "very active year" for the McPherson, Kan.-based builder of machines for manufacturers of window and door profiles, conduit for communication cables, and food packaging in the form of boxes, blister packages and sleeves.

Krauss-Maffei Corp. has a diversified extrusion division for manufacturing nearly all extruded plastic and rubber products.

"We saw exceptionally strong growth in recycling and construction segments," said Brian Bishop, vice president of new machine sales. The cost of the machinery was rarely the customer's top concern, he added.

"In most cases, it was not about price; it was how quickly we could deliver," Bishop said.

Many of the end markets for extruders are thriving. For example, outdoor living remains one of the fastest-growing categories within the repair and remodel sector, and decking is one of the popular investments homeowners are making.

Decking manufacturers have been scrambling to add capacity following successful marketing campaigns to win market share from wood decking products.

Composite decking now accounts for about 25 percent of the overall decking market volume in North America, Trex Co. Inc. CEO Bryan Fairbanks said in a Nov. 8 quarterly conference call.

Winchester, Va.-based Trex recently completed an expansion to increase capacity by 70 percent compared with 2019 volume levels.

With $880 million in sales, Trex ranks sixth among North American pipe, profile and tubing extruders, according to Plastics News data.

Chicago-based Azek Building Products also has undertaken a three-phase plan to increase capacity by 70 percent. The final phase is scheduled to ramp up in the first two fiscal quarters of 2022.

In addition, Entek's customer, New London, N.C.-based Fiberon LLC, is increasing capacity ahead of schedule and investing to get more efficiency out of the assets it has, company officials have said in quarterly conference calls.

With estimated annual extrusion sales of $235 million, Fiberon ranks 21st among North American pipe, profile and tubing extruders, according to PN's latest ranking.

The construction market also kept Krauss-Maffei very busy.

"With more people working from home, we saw significant growth in home improvement segments like vinyl window replacement, fencing and decking," Bishop said.

At Battenfeld-Cincinnati, Godwin has seen strong activity in all of sales divisions, which includes construction, infrastructure and packaging.

North American municipalities and utilities have a wide variety of piping to choose from, so trade groups like the PVC Pipe Association and the Alliance for PE Pipe are offering webinars, podcasts and roadshows to promote and demonstrate the benefits of their products and the expertise of their engineers.

The PVC pipe group touted its advantages over ductile iron pressure pipe for water mains in a Dec. 1 webinar and the PE pipe group has a specialist to help decision-makers update their specifications to reflect improvements in high density PE pipe and processes.

Meanwhile, some of Davis-Standard's machinery customers are future-proofing the grid for a nationwide rollout of 5G wireless networks that are expected to bring sweeping change. 5G service is about a hundred times faster and five times more responsive than existing 4G and 4G/LTE networks. These capabilities will let homeowners automate home energy consumption, control lights and program appliances to run outside of peak-load times.

"In regard to wire and cable, there has been strong demand for fiber-optic cables and ducts to improve connectivity via high-speed internet and to support 5G deployment," Murphy said.

When it comes to flexible packaging, Nunes said all segments are strong for Hosokawa Alpine American.

"The fact that flexible packaging continues to be the far and away best option ecologically and environmentally friendly is what has and continues to drive the growth," Nunes added.

At Davis-Standard, Murphy said demand is up for flexible packaging for portion packs, protective packaging for shipping due to more online shopping and can liners used in commercial and industrial settings.

There was also greater demand for medical tubing, personal protective equipment and consumer products that support recreational markets and building/construction uses, such as high density polyethylene lumber, Murphy said.

Across all the robust packaging markets it serves, Wheeler said: "Sustainability as a topic and goal is back on the front burner after losing some attention during the pandemic. W&H is always researching, testing and pursuing more sustainable processes using minimal resources while not compromising on quality."

W&H officials are also investing in a new 12,000-square-foot office building in Lincoln, R.I.

"Our existing 30,000-square-foot facility, which currently is office space and a spare parts warehouse, will be made completely into warehouse space that will support the expanding base of machines in North America," Wheeler said.

At Entek, the $10 million expansion in Nevada will create 50 jobs at a 98,000-square-foot facility that will be home to the company's wear parts production, fabrication, assembly and engineering.

The company is experiencing record growth and needs more space, Linda Campbell, Entek vice president of sales, has said.

Fiberon officials are among the product extruders anxious to add capacity.

"Decking sales were up mid-single digits in the quarter as Fiberon continued to sell out," Chief Financial Officer Pat Hallinan said during the third-quarter conference on Oct. 26. "We expect incremental capacity to come online in the fourth quarter and are also increasing throughput by deploying process improvement. We expect fourth-quarter decking sales growth to exceed 25 percent."

Meanwhile, at Battenfeld-Cincinnati, Godwin said the company will continue making modest investments to keep up with the demand.

In February, Krauss-Maffei said a major renovation was underway at its 30,000-square-foot Innovation Center, which is located at the company's North American headquarters in northern Kentucky.

A "significant" capital investment was made at the center initially equipped to run only compounding and limited pipe extrusion trials. The facility upgrades are adding injection molding, sheet, profile and enhanced extrusion capabilities for the compounding, pipe and profile markets.

Bishop said Krauss-Maffei officials are also excited about a new manufacturing facility in Hanover for all extrusion product lines. The 66,500-square-meter facility is expected to be completed by the third quarter of 2022 and employ 750 people. The facility will include an innovation center where customers from the plastics and rubber industries can run preliminary tests under production conditions before ordering a new machine.

"The facility has a full-service lab for processing of rubber products, profiles, compounding as well as recycling. This will enable us to react to the market faster by optimizing our production," Bishop said.

Davis-Standard officials said they will continue investments in research, employee development and machine tool upgrades that support manufacturing of key process components.

Nunes said Hosokawa Alpine American has invested millions into expansions and infrastructure at facilities in Northborough and Augsburg, Germany.

Davis-Standard introduced three technologies in 2021, including a custom-designed, cloud-based platform (DS Activ-Check) to leverage the Internet of Things; a roll stand (XP Express AGT) that can be used for both sheet and cast extrusion for the full range of sheet and cast applications; and an extruder series (SHO and CHP) for high outputs.

"The configurable platform engine uses analytical tools based on long-term cloud data storage along with process and equipment technology algorithms to help management and production teams identify and improve product quality and line efficiency," Murphy said. "We anticipate the implementation of this technology to grow in 2022."

Davis-Standard also is about to launch the new SHO and CHP series. The company says the compact, high-output machines extrude at faster rates than traditional machines and provide faster purges of resins and colors.

"Customers can benefit from reduced raw material loss, improved transition times, greater flexibility for upgrades and better production outputs," Murphy said. "The SHO is engineered for large-scale applications. The CHP offers coextrusion benefits due to its compact footprint and higher output."

Meanwhile, Entek introduced the first product in a new series of co-rotating twin extruders that opens the door to a new market: commodity compounding and masterbatch, particularly for glass- or talcum-filled polymers.

The HT72 twin-screw extruder — HT as in high torque — has a robust construction and a large motor for 24/7/365 production suitable for the packaging and home building markets, too.

Entek also patented a vacuum feed technology to assist in the feeding of fluffy fillers, and it has a patent-pending vent flow detector.

At Battenfeld-Cincinnati, Godwin said the company is focused on developing machinery for the extrusion market that has increased yield, quality and energy efficiency.

Krauss-Maffei's Bishop said the extruder builder added to its sales force to help manage the growth experienced in compounding, recycling and shaped products.

At Hosokawa Alpine American, Nunes said new and updated controls as well as winding and machine direction orientation (MDO) technology have been a focus of development. MDO advances let processors modify optical, barrier and mechanical properties of end products.

"Additionally, MDO to produce all polyethylene recyclable packaging films is an ongoing development in the industry," Nunes said.

W&H started delivering its Turbostart technology for stopping and starting the company's Varex II blown film lines.

"Turbostart simplifies the stop and start-up process, making it much easier and safer for the machine operator," Wheeler said. "It also dramatically reduces the time required to perform this process, which allows for substantial financial savings and has also proven to free up time that can be spent on other jobs."

Davis-Standard also introduced the Optimex II blown film line at its virtual expo in June.

After a busy year full of opportunity and hurdles, Murphy noted: "Despite the continuing challenges posed by the pandemic, all of our machine installations in 2020 and 2021 were on time."

The chip shortage is affecting the extrusion industry and Krauss-Maffei's Bishop said, "We are working diligently to keep our supply chain intact."

The chips are utilized for electronics at W&H and in the control and automation products that are part of Davis-Standard equipment.

"Supply chains for control products are also tight, but we are managing this relative to our needs in supporting customer commitments," Murphy said.

Battenfeld-Cincinnati uses the microchips for its PLC systems and drives. Godwin said the shortage is causing some longer lead times.

Nunes said the labor shortage followed by supply chain problems and the logistics of ocean freight are posing challenges at Hosokawa Alpine American.

At Krauss-Maffei, Bishop said COVID-19 remains a concern along with the rising cost of steel and electronic parts for control panels.

"These supply chain issues continue to hinder our build components, but we've put a number of plans in place to mitigate the effects of customer commitments and machine deliveries," Bishop said.

At Entek, Medford said they are dealing with rapid growth coupled with labor shortages, but they are confident about managing the challenges.

"Our machinery business continued to have growth in 2020 and in 2021. Although we have several open positions, our lean improvements have had a significant impact on our processes and we continue to support our business to some degree through our dedication and investment in reducing all types of waste," Medford said. "The addition of our Nevada facility and staff will increase our capacity and we will be open for business to serve the additional growth."

Officials at W&H, Davis-Standard and Battenfeld-Cincinnati are bracing for supply and shipping problems to spill over into 2022.

"The global supply chain of materials will continue to be tight and may cause delays. This will require every industry to make adjustments to mitigate delays," Davis-Standard's Murphy said.

The pandemic changed how business is conducted, from online meetings and product launches to virtual tools for troubleshooting to fist-bumps as acceptable as handshakes. Once public health measures were established and businesses adapted to evolving COVID-19 protocols, the economy started to surge again, noted Davis-Standard officials.

"This led to unprecedented levels of machinery sales in 2021 that will carry into 2022," Murphy said. "It had a positive impact on investment in many important end markets, including packaging, medical, communication cables, building and construction products, and green energy-related products."

To conduct those sales, everyone adjusted to hitting "unmute" and video conferencing.

"Virtual business is a way of life that will never change going forward," Nunes said at Hosokawa Alpine American.

Krauss-Maffei's Bishop added, "Virtual is now a standard and I don't see that changing anytime soon, but we still value face-to-face meetings when allowable."

At W&H, Wheeler agrees.

"Many of our meetings are virtual, and this has proven to be extremely effective," he said. "Our travel is picking up; it's important to have meetings in person to develop and nurture relationships. People are social creatures. However, I do believe the way we travel has changed, probably permanently."

At Entek, staff has been traveling throughout 2020 and 2021, Medford said: "We have had long-term projects going on and our staff has continued to travel to support our customers and their growth. This fall we have seen an increase in travel to customer sites and trade shows."

Davis-Standard staff started traveling again in mid-2021 as restrictions were lifted. The company also added employees to address growth, as did W&H for its sales, accounting and service.

However, at Battenfeld-Cincinnati, Godwin clarified, "The growth of our customer base affected demand, not the pandemic."

Overall, he said, "We have had business as usual with the adoption of practices to keep employees safe."

Entek's Medford described the future as bright.

"We expect our growth to continue at a rapid pace and be a significant increase over what we have experienced in 2021," she said. "We are fortunate that our customer base is diversified, and our machinery demand held steady in 2020 and has grown in 2021. We anticipate an even larger increase in 2022."

W&H officials said their end markets continue to look strong: "Although we would, of course, need to mention supply chain problems. Clearly this isn't a unique situation. … It's affecting most markets," Wheeler said.

At Krauss-Maffei, Bishop said it sees tremendous growth in recycling and expect to have moderate increases in all segments.

"Great strides have been made in recycling technology that we are benefiting from," he added.

At Hosokawa Alpine American, Nunes said, "The more we can do as a company and an industry to promote the infinite ways that flexible packaging improves the quality of life for everyone, the better off we will all be."

Davis-Standard officials expect continued growth in 2022 at a moderate pace since machinery demand was so high in 2021.

"Food and protective packaging and agricultural films will remain strong, along with medical, pipe, telecom and building/construction markets," Murphy said. "We will also see an uptick in industrial markets linked to infrastructure and alternative fuel transportation, as well as power markets that support offshore wind and solar."

Battenfeld-Cincinnati USA officials also forecast a strong year ahead.

"As long as our world remains safe, we anticipate continued growth and the recovery of supply chain issues back to normal lead time," Godwin said.