Injection machine builders press through record growth, ailing supply chain

Strong sales of injection molding machines continued into 2021 with solid demand again from the medical and home goods markets as well as businesses bringing back production from overseas — and it's almost all in response to the pandemic.

If the months of November and December come in at the same rate as the rest of 2021, press builders expect U.S. sales to reach 5,000 units, an increase of 25 percent from the 4,000 presses sold last year.

Still, 2021 has its challenges and they will stick around for the foreseeable future. The global supply chains remain stressed, hiring signs are everywhere, inflation is being felt, transportation can be scarce and costly, and COVID-19 keeps evolving.

The plastics industry keeps responding, ramping up production for personal protective equipment, respirators, ventilators, testing pipettes and components for vaccines. The next phase: offering all adults boosters ahead of a possible winter surge in cases and a new variant called omicron.

The medical market has gone from strong to stable but remains very healthy, according to Arburg Inc. President Friedrich Kanz.

"A lot of the products that were needed in order to fight COVID are plastic products, produced on plastic injection molding machines. And that is a matter of fact and therefore our industry is really important to the entire medical market. And I think that will remain the case even if the COVID situation is brought under control," Kanz said.

Rocky Hill, Conn.-based Arburg achieved record sales in 2020 and Kanz expects a repeat in 2021.

So does Len Hampton, the national sales manager at Plustech Inc., in Elk Grove, Ill., which is the North American base of Sodick Co. Ltd.'s injection molding machinery division. Sodick serves manufacturers of high precision, tight tolerance, micromolded medical products.

"We've seen a surge in orders in the medical device market, especially on the diagnostic side due to the pandemic. ... Machine demand in the midsize range of 100-200 tons for us has gone through the roof," Hampton said, adding orders are also strong in the appliance and industrial markets.

Absolute Haitian is on pace to ship more than 50,000 machines globally this year with business up about 20 percent from last year for the U.S. and Canada, according to Glenn Frohring, an owner of the Worcester, Mass.-based company that sells injection molding presses made in China by Haitian Plastics Machinery Ltd.

Many Absolute Haitian press buyers manufacture consumer products and household goods like storage bins and shop vac parts that have remained in big demand with much of the U.S. workforce still working from home.

"At the end of three quarters, our unit sales were at a level that exceeds all of last year," Frohring said, noting that most machine makers are working to rebuild their stock. "We have a huge facility in South Carolina. Our goal is to have 150 machines in inventory at any given point in time."

Engel North America in York, Pa., has a similar plan. The company has 100 injection molding machines in its stock pipeline, President Paul Caprio said.

"We've never done that before here," he added. "That's a big commitment to a part of the market where all we know is delivery is the primary reason for their purchase. If you have a machine in stock, you can get ahead of the incumbent."

Hillenbrand Inc. officials said the company has a strong backlog and solid demand trends, but they foresee supply chain disruption and labor shortages to be a headwind throughout the year.

The Batesville, Ind.-based company, which includes plastics machinery manufacturer Milacron, lost some opportunities to the strained supply chain — at least for now.

"We would say roughly about $50 million is what we believe is probably pushing into the next year," Chief Financial Officer Kristina Cerniglia said in a Nov. 18 conference call about yearly results.

In 2021, Hillenbrand sales increased 13 percent to $2.8 billion.

A lot of the machine builders serving injection molders saw double-digit sales growth.

Annual sales are up about 60 percent at Torrington, Conn.-based CH America, which builds machines for manufacturers of tote bins, plastic pallets, crates, golf carts and swimming pool equipment along with automotive market.

"We are a young company, so this type of performance will get more difficult as we get larger, but we are very happy with the growth," said Ken Heyse, president and managing director at Plastics One and CH America, which sells Chen Hsong presses.

At Krauss-Maffei Corp. in Florence, Ky., growth was steady and steep thanks to machine sales to the logistics, packaging and medical markets. The company is up nearly 50 percent over calendar year 2020, said Brian Bishop, vice president of new machine sales.

At LS Mtron Injection Molding Machine USA in Norcross, Ga., Business Director Peter Gardner said 2021 unit sales and shipments are up more than 50 percent from 2020, with more than 200 presses going to North America to produce appliances, electronics and large home goods.

"Items previously being made overseas are strongly shifting towards the USA, especially larger items, which would carry a large burden of shipping cost increases, not to mention delays caused by the global shipping issues," Gardner said.

As a result, two-platen machines from 550-3,600 tons will capture more than 20 percent of the U.S. market share for 2021 for housewares, such as storage containers, Gardner added.

At Wittmann Battenfeld Inc., in Torrington, Conn., President David Preusse said sales are good but also constrained by supply chain problems.

"Our new orders rate ramped up 40 percent in 2021 over 2020, while parts and labor shortages limited our revenue growth to 15 percent," Preusse said.

At Yizumi-HPM Corp. in Iberia, Ohio, General Manager Jon Martin is feeling the pinch, too.

"We have seen steadily increasing interest across our full product range, resulting in higher year-over-year sales and an increasing order board," he said. "A key challenge is meeting lead time expectations, which is being impacted by global supply chain constraints."

At Nissei America Inc. in San Antonio, sales were up 8 percent on a unit basis and 20 percent on a dollar basis. Sales at Boy Machines Inc. in Exton, Pa., were up about 5 percent compared with 2020.

Nissei America, a U.S. sales subsidiary of Japan-based Nissei Plastic Industrial Co. Ltd., has relocated from California to San Antonio and combined there with its production subsidiary Nissei Plastic Machinery America.

Officials at New York-based Japan Steel Works America Inc. said they saw unprecedented growth during the first half of 2021, then sales activity normalized.

Machine builders are managing growth along with supply chain disruptions and chaos in the global shipping system.

"We are working harder than ever to anticipate customer orders, pre-order needed parts and maintain robust relationships with our suppliers," LS Mtron's Gardner said.

Even though LS Mtron is related to many of its key suppliers under a common founding company, LG Corp., vigilance is needed, Gardner said.

"From steel castings by our South Korean subsidiary, Casco Steel, to servo motors and drivers from Higen (formerly LG) to shipping through LX Pantos (an LG business), we have deep relationships from the start to finish for making and delivering our machinery," Gardner said. "But even with these relationships, we need to boost up our supplies of parts on hand, for ensuring a smooth production process."

Absolute Haitian injection molding machines use some switches, valves and controllers from Europe, and parts delivery issues are just starting to pop up.

"We're seeing it for the first time, which is an anomaly for Haitian, but it's not huge delays," Frohring said. "Haitian has 21 million square feet of manufacturing space all over the world. … Haitian still has capacity, buying power and the economies of scale."

At Engel, Caprio said: "I don't have problems with the supply chain keeping our machines from getting out of the factory. Our biggest headache is the vessels they have to be on, whether it comes from Asia or Europe. Customers have been very understanding. They know about all the cargo ships parked outside of the ports."

Yizumi-HPM's Martin said: "We need to support our customers with improved lead times, which may require us to carry more inventory over the next 12-18 months."

At Billion Plastics Machinery Inc. in Rochester Hills, Mich., officials are also bracing and planning for further supply chain impact, according to North American Sales Manager Georg Kiesl.

"We see a general pressure on the entire supply chain across a number of product groups driven by base material prices," Kiesl said. "To date, we are able to compensate for these uncertainties and keep our standard delivery windows, but this is a key area we are watching for early 2022."

And it's not just components and microchips that are difficult to procure; it's everything from raw materials to gloves and safety equipment to cardboard boxes for shipping.

"We use chips, but at the moment all parts are becoming a problem due to the supply chain issue," Boy President Marko Koorneef said.

Many machine builders are experiencing the pandemic-induced microchip shortage internally or externally with customers — or both.

When lockdowns went into effect in March 2020, sales soared for work-from-home devices like desktops, laptops and smartphones and play-at-home game consoles.

There was a sudden shortage of chips that power these products, and it led to a wave of panic-buying that continues to hurt manufacturers.

"These [microchips] are used in our controllers, and we do feel the impact of the shortage. We hope for quick recovery," said Yasunori Kato, president of Nissei America.

But nobody is holding their breath.

"The chip shortage has been very challenging, and we are not yet seeing any signs of a turnaround for this situation," said Naoto Ikeda, vice president of sales at Sumitomo (SHI) Demag Plastics Machinery America Inc.

The same goes for LS Mtron, which uses microchips in the electronic components of its equipment, such as servo drivers.

"We anticipate lead times for these components lengthening even more in 2022," Gardner said. "We are working closely with our vendors and adjusting our processes to advance ordering, fly in components, etc., to help the production line from being disrupted."

So far at Krauss-Maffei, Bishop said, "supply chain issues continue to hinder some of our machine components, but we've put a number of plans in place to mitigate the effects of customer commitments machine deliveries."

Wittmann Battenfeld officials said one of their plans has been to throw money at the problem of obtaining the microchips they need for temperature controllers, molding machines, robots, microprocessors and more.

"We've had to pay some extortion prices to alternate sources when our normal suppliers hit some delivery issues in order to keep production working," Preusse said. "Sadly, part suppliers don't know credible delivery information, and it can change from day to day. Some production lines are slowed, or halted, during these times of demand stripping away supply lines, shipping containers delays and shipping freight with logistics inflation."

Preusse expects supply shortages to run through 2022.

Arburg is in a luckier position, according to Kanz.

"We are producing our controller as well as a lot of its components in-house. So we have been able to manage the chip shortage pretty well up to this point and it has not affected our output of machinery," Kanz said. "That is certainly a positive aspect related to Arburg's independence, having a very high vertical production integration."

Other machine builders like Engel and Yizumi-HPM said their operations haven't been hampered by the microchip shortage but their customers have, particularly in the automotive and appliance end markets.

Automotive factory shutdowns, in particular, caused by supply chain issues, have cut into machine sales.

"Anyone who has tried to purchase a new car recently has experienced the shock of empty car lots," LS Mtron's Gardner said.

In mid-November, the auto industry passed the 10 million mark for the number of vehicles lost this year as a result of the worldwide shortage of microchips, according to an estimate from AutoForecast Solutions.

Automakers are continuing to cut back production plans, despite signals that the crisis may be easing.

"While other supply chain issues affecting automotive will likely resolve sooner, the microchip shortage is projected to continue throughout most of 2022 — certainly the first half of the year — and may not be resolved until 2023," Sumitomo Demag's Ikeda said.

On the bright side, Ikeda and other industry officials note the promising electric vehicle segment is just ramping up.

"We are expecting growth in automotive segment sales, especially as the industry transitions to more environmentally responsible products and manufacturing technologies, but are being very cautious in our projections as to when that growth will actually begin," Ikeda said. "We do foresee considerable opportunities in automotive; the question is when?"

Engel's Caprio agrees. As the automotive market goes through "short-term sales numbers fluctuations," he said, "one should not forget that the growth in the EV segment is a factor in the industry with new technologies, new brands and new models."

At Nissei America, Kato puts it this way: "We are preparing for the automotive industry to recover."

In the meantime, the chip crunch drags on.

As a South Korean manufacturer, LS Mtron does strong business in the U.S. and Mexico with South Korean OEM giants like Kia and Hyundai.

"There are slowdowns of production due to chip shortages, and in turn, many of the planned injection molding machine acquisitions for 2022 are being postponed," Gardner said.

However, for large-tonnage machines, the slowdown in the automotive market for LS Mtron is being tempered.

"We have seen an increase in business related to appliances, large-screen TVs and larger home goods with that demand driven by Americans spending more on home offices, home renovations and at-home entertainment," Gardner said.

"Fifty percent of flat-screen TVs in the world are made by South Korean makers Samsung and LG," he added. "Many for the North American market are made in the U.S.-Mexico border area. And in Tennessee, LG recently opened a new facility making washers and dryers. Although automotive is down for LS Mtron, we are having good opportunities to make up for it in these other markets."

Wittmann Battenfeld also serves the automotive market, but Preusse isn't concerned about microchip, parts, labor or resin challenges restricting its full potential.

"This simply moves the demand out," Preusse said. "2022 will be another record year as a result."

Businesses also have a record number of job openings and have had to raise wages to compete with $15- to $18-an-hour pay rates at fast-food chains and gas stations.

Sumitomo (SHI) Demag's Ikeda said the company is successfully adding employees, including staffing a new office in Cincinnati.

"We grew our North American sales team over the last one and a half years and only encountered hiring challenges for some of our lower-salaried positions," Ikeda said.

CH America added remote service people in California, Michigan and Canada and also made a major investment in its spare parts facility in Torrington, where it plans to increase service department staff.

"Our parts department is well managed and running very smoothly," Heyse said.

That can be a rarity in the U.S. job market, where the demand for workers outstrips applicants.

Hillenbrand is seeing labor pressures mainly in North America and trying to address it several ways, Cerniglia said.

"We are having job fairs. We are going to trade schools. We are partnering with universities. So is it getting better? We're seeing a little bit of uptick, but I still think that it's going to be quite challenging for at least through the first half of the year," she said.

Yizumi-HPM is looking to add technical sales talent and technical service personnel.

"Coming off of the pandemic-related travel restrictions, we have resumed face-to-face customer meetings to provide technical product introductions," Martin said.

Arburg is hiring, too

"Currently, we are getting the job done, but we are looking for additional employees, especially qualified employees," Kanz said. "We're not only selling machines, [but] we are selling solutions, turnkey projects and that requires qualified employees. As soon as we meet someone with the right qualities, we try to hire him or her because we definitely we need more employees in order to continue the growth path the company in on."

The turnkey solutions that are keeping Arburg so busy are also related to the dearth of workers.

"This might not be considered new technology, but that's what is in high demand in the market, Kanz added. "I think that is related to the shortage of people. More and more customers are trying to automate processes to eliminate the need for workers."

Engel launched a new four-year apprenticeship program in 2021 to train service technicians.

"This is a combination of school and a lot of hands-on training in our York facility and in the field within our experienced service team members," Caprio said. "We will start hiring for the 2022 program soon."

Another ripple effect of the pandemic has been reshoring to strengthen the domestic supply chain.

"America doesn't want to rely on China anymore. It can't," Caprio said. "It's too far away, and the transportation and shipping is too vulnerable. The CEOs of American companies are saying that it doesn't matter if it costs more to make here. That's better than not having it, which is the worst thing that can happen. And that's what is happening."

There's a national push to manufacture essential and other products in the U.S. as well as to have a broad base of suppliers as opposed to a single, cheapest source.

"A lot of business we're seeing isn't eliminating the supplier in China," Frohring said. "It's more of a contingency plan to make it here so we don't wait six to seven weeks for a container to get over."

The new factories will likely be equipped with new presses, which bodes well for machine builders.

"Reshoring of medical, health care and consumer products to North America is definitely helping our machinery sales," said Ikeda at Sumitomo (SHI) Demag.

Frohring added: "We need to make this stuff in the U.S. and Canada, and we need to be close to our end users, maybe a Walmart or Home Depot distribution center or an Amazon fulfillment center."

In 2020, reshoring surged to a record high of 109,000 jobs announced, driven in part by import shortages during the pandemic along with factors like corporate tax and regulatory cuts and the increased recognition of the total cost of offshoring. That's according to the Reshoring Initiative, a nonprofit organization on a mission to bring back good-paying manufacturing jobs.

If the second half of 2021 progresses at the same rate as the first half, reshoring and foreign direct investment job announcements for the year are projected to be over 220,000, which is a 38 percent increase from 2020 and would be the highest annual rate since the Reshoring Initiative started in 2010.

The organization describes its No. 1 goal as balancing the $900 billion a year goods trade deficit to bring back 5 million manufacturing jobs to the U.S.

Most companies make sourcing and plant siting decisions based on wage rates, which ignores the total cost of ownership (TCO) and some risks, according to Harry Moser, founder of the Reshoring Initiative and the former president of machine tool maker GF AgieCharmilles and 1996 SPE Mold Designer of the Year.

TCO takes into consideration other costs like carrying inventory and traveling to check on suppliers as well as intellectual property risks and drawbacks associated with long product pipelines. When TCO is factored in, Moser said, it makes sense for some businesses to reshore. If all costs and risks were recognized, at least 10 percent of imports would be sourced domestically, Moser said.

"Ten to 15 percent of current product should come back and 10 percent more not go abroad on the next revision," Moser said. "Maybe the current product doesn't come back because it's over there all tooled up, but maybe the next product or revision that comes out will be started here in the United States instead of offshore."

Dale Bartholomew, national technical manager for Japan Steel Works America Inc., sees reshoring drive demand for new machinery.

"We have definitely seen a lot of interest in reshoring, as people are realizing the astronomical increases in cargo and freight costs," Bartholomew said. "Also, the supply chain issues can be resolved by locally produced products."

Manufacturers of large products, in particular, are taking steps to bring production back to the U.S., according to Gardner at LS Mtron, which does strong business in the markets for appliances, electronics and large home goods, such as storage containers.

"Items previously being made overseas are strongly shifting towards the U.S., especially larger items, which would carry a large burden of shipping cost increases, not to mention delays caused by the global shipping issues," Gardner said.

Manufacturers of unstackable parts are also reshoring.

"It's expensive to ship air," Frohring said. "And with the logistics the way they are, you can't rely on containers to be in on time and the container costs are too high."

In 2018, the U.S. imposed 25 percent tariffs on Chinese imports that included injection molding machines, extruders, blow molding machines, thermoformers, machine beds, platens and hydraulic assemblies, as well as molds for injection and compression molding.

Then-President Donald Trump put tariffs on $550 billion worth of Chinese goods under Section 301 of the Trade Expansion Act of 1974. The U.S. also put tariffs on aluminum and steel, citing national security reasons.

Absolute Haitian, which sells presses made in China by Haitian, minimized the effects of the trade tariffs with a multiprong approach that involved reducing prices and lowering profit margin.

"Haitian reduced the price to help us, and we absorbed the lower margin so the impact to our customers was a minor increase," Frohring said.

Federal officials looked at tariffs again in October as part of a plan to readjust U.S. trade policies toward China, but the administration of U.S. President Joe Biden is keeping them in place.

Meanwhile, the U.S. and European Union recently resolved a dispute over tariffs of 25 percent on steel and 10 percent on aluminum imports also imposed in 2018.

Negotiations concluded with the Biden administration agreeing to allow a pre-determined amount of EU exports into the U.S. duty-free, but it did not include a complete removal of the tariffs. In return, the EU will end the 25 percent retaliatory tariffs on certain U.S. imports, including Harley-Davidson motorcycles and Kentucky bourbon, that were scheduled to double to 50 percent on Dec. 1.

Yizumi-HPM's Martin applauds the talks.

"The trade tariffs create higher investment hurdle rates for our customers. Our business will perform better with lower tariff rates," he said.

Heyse at Plastics One agrees.

"The North American market has absorbed the price increases caused by the tariffs pretty well," he said. "The tariffs make holding large inventories more expensive, and if you combine that with the supply chain issues, customers have been experiencing longer delivery times than normal. If the tariffs are reduced or rolled back, it will be a boost to sales in our opinion and deliveries should improve."

However, Bartholomew said there is an upside for JSW.

"Japan Steel Works still manufactures all equipment in Japan, so tariffs do not affect us. It does benefit us when competing against offshore brands," he said.

Gardner said trade, tariffs and other economic and geopolitical factors are tough subjects.

"There are complex issues related to what I call supply chain friendliness and geopolitical alliances," he said. "It is difficult for us to say if the well-publicized 25 percent additional tariff on injection molding machines from China have had a big effect. Our machines for the U.S. are made entirely in South Korea, including all steel castings at our company-owned foundry, so we enjoy 0 percent import duties and tariffs. That being said, it is hard to quantify if our lower-cost imports have helped our growth, or if the growth is just a result of the recent LS expansion of sales efforts, including the April 2021 acquisition of former distributor DJA."

At Boy, Koorneef quipped this about tariffs: "Supply chain and inflation are the biggest problems; the rest is insignificant."

In November, the U.S. consumer price index soared 6.2 percent from the prior year — the biggest 12-month jump since 1990. Inflation is at a 30-year high and being felt by households and businesses.

Hillenbrand's Cerniglia listed some categories giving her price sticker shock.

"We continue to see a higher cost in transportation. Steel is still inflated. Fuel continues to be inflated," Cerniglia said. "We're really not seeing a lot of relief quite yet on the inflationary side of the house."

Arburg's Kanz agrees that inflation is another big factor for machine builders, especially with prices climbing already because of the kinked-up supply chain.

"Is [inflation] a permanent thing at this level, or is it only temporary? Even the best experts do not know that for sure," Kanz said. "But we are certainly concerned about much higher costs and the shortages of the materials that we have to buy on the market. Our customers are facing a shortage of resin and higher prices. Then, there is a shortage of qualified labor and high labor rates. If you want to secure quality employees, the cost of employment is going to go up. So that is all part of an overall higher-cost scenario. We have to face that, and I do not expect that that is going away anytime soon."

Political forces also are giving machine builders headaches, Preusse said. He pointed to a possible vaccine mandate for businesses with more than 100 employees as well as calls for a tax on virgin plastics for single-use applications.

A lot of companies are worried about losing workers who don't want to get vaccinated and the whole industry is watching what happens in Washington, D.C., with the debate over a 20-cent-per-pound fee on virgin plastic, Preusse said.

Plustech's Hampton said the challenges keep coming.

"Logistics, material shortages and lack of labor are enough of a problem for everyone, let alone a proposed excise tax on raw materials."

Proponents say a resin tax will address fossil fuel tax breaks that hurt recycling, help markets flooded with artificially cheap virgin resin and kick-start a transition to a circular economy.

But plastics industry officials have urged Congress to set aside the resin tax proposal. Critics say the proposal hasn't been vetted in any public hearings with expert analysis and they have questions about vague language and a potentially complicated rebate program.

Plastics industry officials said they strongly support more use of recycled content, but they see a resin tax as increasing costs for consumers and putting up to 92,000 jobs at risk.

"We're nervous if the government passes the tax on virgin plastics, it would have a negative impact on our industry," Preusse said.

One of the positive forces in the plastics industry is the trend toward automated smart factories and Industry 4.0, according to many executives.

Henry Zhang, marketing and market intelligence director at Bolton, Ontario-based Husky Injection Molding Systems Ltd., said automation and digitalization are revolutionizing how businesses interact with customers, run their operations and manufacture products.

"Producers who remain competitive will continue to integrate digitalization into their operations to streamline and automate the manufacturing process, bringing about increased control, precision and speed," Zhang said.

The pandemic is spurring demand for robots and automation, added Wittmann Battenfeld's Preusse.

"Robots don't have exposures or sickness, and they protect production where labor is nowhere to be found," he said. "Some processors say they lack as many as 200 workers, which has curbed their demand and growth potential."

Engel's Caprio sees the automation momentum building. He said some of the demand is coming from plastics processors struggling to staff their production plants while others are rethinking their operations and turning to digitalization and intelligent software solutions to get the full potential of their machines.

"Automation is continuing to grow to the point that if a machine is purchased without automation, this becomes the exception," Caprio said. "We are significantly increasing the number of machines and robots in stock in the U.S. for fast delivery."

Krauss-Maffei hired a vice president of automation, Michael Gondha, and tasked him with a big job.

"He will help drive the integration of robotics and automation cells due to the labor shortage and increased hourly rates that our customers are forced to pay," Bishop said. "We are working on solutions to drive labor out of molded assemblies."

Along these lines, Husky developed its Next Generation Operating Model, which is a digitalized manufacturing system that Zhang says can increase plastics processors' speed and flexibility.

"This system enables hardware to be configured through a web interface and then produced in a state-of-the-art laboratory through an automated process, enabling our customers to quickly and effectively respond to consumer demands, resulting in lower part costs and improved part function," Zhang said.

Overall, however, the plastics industry still has a long way to go before adoption of Industry 4.0 becomes widespread, according to Ikeda, Gardner and Kanz.

"Industry 4.0 is gradually gaining interest in the U.S. in terms of remote monitoring capabilities and, to a lesser extent, for lights-out operation," Sumitomo Demag's Ikeda said.

"If by Industry 4.0 you are referring to the integration of external components, automation, downstream equipment and the machine controller, I would say that this subject is primarily being driven by the Europeans," Kanz said. "I wish there was more activity in the United States."

Gardner said at least one of LS Mtron's very large customers in the U.S. has implemented elements of Industry 4.0 in its manufacturing facility.

"All machine and auxiliaries are controlled using our system, and real-time data collection is also realized," Gardner said. "Another large OEM customer of ours is requiring their Tier 1 molders to use our dedicated LS Mtron machine together with our remote monitoring system so that they, as the OEM, can collect real-time data about the molding of their parts at the submolder."

Billion's Kiesl expects Industry 4.0 to gain popularity in the U.S. as the pandemic reaches the two-year mark.

"The pandemic has highlighted the advantages of heightened connectivity, notably in terms of internal process and quality control," Kiesl said. "Whatever reluctance against Industry 4.0 was out there has been squashed by the sheer convenience of automatic process tracing and remote access to process parameters."

At the Reshoring Initiative, Moser said the transition to Industry 4.0 will help manufacturers attract brighter employees to better jobs with higher pay.

"We will lose more jobs to automation in China if we don't automate than we will to automation in the U.S. if we do automate because it is a competitive world," Moser warned.

Machine builders continue to see a shift in business resulting from changes in consumer preferences with COVID-19 still being one of the biggest influencing factors.

"Overall, it's been a dynamic environment and we've had to selectively add capacity, shorten lead times and shift production to serve the evolving demands of the food, beverage, consumer goods and medical industries," Husky's Zhang said.

The pandemic created a massive opportunity for processors of medical diagnostic equipment and drug-delivery and medical devices, Zhang added, and as a result, many increased capacity or capabilities.

"We are helping customers meet demand by offering a complete solution, including consulting, systems, molds, hot runners, services and parts, to enable them to safely scale up production, quickly get to market, as well as obtain certainty in part quality and production," Zhang said.

Sumitomo Demag focuses on advanced all-electric technology and its associated benefits for the medical segment, Ikeda said.

"For 2021, this ongoing strength was driven by the pandemic as well as reshoring and new, non-COVID-related medical advances," he added.

Machine builders and plastics processors had to pivot to produce all kinds of medical equipment needed during the pandemic, Kanz said.

"At the beginning, it was protective equipment. Then there were big investments into pipettes, test kits and the syringes needed for vaccination," Kanz said. "Luckily, Arburg had already a decent position in the medical market here in the United States and that put us in very good shape."

Other machine builders that benefited from the strong medical market include JSW, Krauss-Maffei, Boy, Nissei America and Wittmann Battenfeld.

"Lots of plastics demands came with the pandemic response," Preusse said.

Americans also continued to invest in their homes, which bode well for Absolute Haitian, Engel, LS Mtron and others.

"There was a significant increase in demand for anything you get at your local DIY market, like hand tools, appliances, everything needed for the home, storage systems, totes, shelving, paint," Engel's Caprio said.

LS Mtron's Gardner also saw demand increase for appliances as well as electronics and large home goods, such as storage containers.

At Nissei America, Kato said machine sales to the general goods market have been increasing since the second quarter and demand from the irrigation-related market is rising steadily.

The consumer goods and packaging markets also have been strong for Billion and Sumitomo (SHI) Demag.

Overall, Wittmann Battenfeld's Preusse said, "manufacturing across America is extremely busy. I'm sure the government stimulus funding also added greatly to strong markets demand."

However, Kanz described the automotive market as "still limping along."

"My hope is that, since you cannot expect medical to continue booming the way it has, that it will stabilize or balance out and then hopefully automotive picks up to a certain degree and, despite all the environmental discussions, packaging remains stable," he said.

In early 2022, LS Mtron will open an additional technology center in Texas that primarily focuses on large-tonnage machinery, Gardner said. The center will initially house 500-ton, 770-ton and 1400-ton machines ready for demonstration and mold trials.

At Wittmann Battenfeld, the backlog doubled this year and the company needs to expand its U.S. operations in Torrington, Conn.

"This will involve a half-million-dollar investment of cranes, utilities and working areas, more storage warehousing for inventory and for the overflow of robot systems that are in big demand," Preusse said.

The company also needs more room to run complete workcells integrated with an injection molding machine, robot, automation and auxiliary equipment.

"There is a lot of demand for field-proven molding systems from one supplier," Preusse said.

Krauss-Maffei is also expanding its physical presence.

"We are continuing to develop and improve our Florence, Ky., facility with focus on sustainability through reprocessing efforts in injection molding and extrusion compounding equipment," Bishop said.

Husky is investing in the production of more sustainable packaging.

"With today's circular economy driving package design, we work closely with our customers to ensure their products meet specific regional design requirements, particularly regarding recycling and enabling certain percentages of recycled content in packaging," Zhang said.

He pointed to Husky's recycled-flake-to-preform technology as an example.

"The system is designed to support the closed-loop conversion of washed flake to preform by accepting melt from an upstream provider," Zhang said, adding the solution facilitates the effective production of preforms made from 100 percent recycled PET.

Kanz said investments in employees, machines and infrastructure are ongoing at Arburg factories. In 2020, the company almost doubled the size of its building in Rocky Hill, Conn.

"More specifically, we have more room to stock machines here in the United States, which can be finalized before delivery to customers. That's No. 1," Kanz said. "No. 2, we are doing more and more turnkey projects that have to go through factory acceptance tests here at Arburg in Rocky Hill. For that, we need, of course, space and infrastructure, including big cranes."

Arburg also has a large staff in the U.S. to support the 14,000 machines in operation here.

"And when COVID is under control, we will, once again, be able to use the new extended facilities for customer training and customer presentations," Kanz said. "Bottom line, infrastructure is on the level needed so that Arburg can do a first-class job here in the United States."

Following its recent move to a new 138,000-square-foot building in Elk Grove, Ill., Plustech is implementing a new warehouse management system and expanding its "turnkey area," Hampton said.

"We typically accommodate around 35-40 customer mold trials per year," he added.

At Billion, Kiesl said the company is looking to increase production flexibility following investments in its information technology systems.

At Sumitomo (SHI) Demag, Ikeda said 2022 investment plans are focused on staffing, the extensive parts and stock machines program, and continuous improvements throughout operations.

Absolute Haitian is upgrading and reconfiguring its 20,000-square-foot customer technology center in Parma, Ohio, for demonstrations and training.

"We're enhancing everything to bring it into what younger engineers and customers in our industry want to see. We're bringing it into 2022," Frohring said.

Yizumi-HPM is making plans to provide training facilities and increase areas for assembling, testing and demonstrating its products, Martin said.

Meanwhile, Engel is adding staff to its automation and after-sales teams to support North American customers, Caprio said.

Machine builders have mixed opinions about whether they lost sales with the cancellation of NPE2021, which was scheduled for May 17-21 in Orlando, Fla.

Absolute Haitian, Arburg, Billion, Boy, Engel, Nissei America and Wittmann Battenfeld officials don't think they did.

"Sales have increased due to increased demand in the market," Caprio said, adding Engel built a platform to host virtual events and an online showroom that is open all year.

At LS Mtron, Gardner isn't sure.

"It's difficult to say what might have been if NPE had gone on," he said. "Our sales did increase in 2021 by a large measure; that's not to say they wouldn't have increased even more had we been able to introduce ourselves to a few big customers at NPE."

At CH America, Heyse said he thinks the lost exposure and networking opportunities hurt.

"We feel we could have added to our sales growth even more with a good NPE and could have made contacts in other areas that would have helped the company," Heyse said.

The decision was disappointing to many, including Yizumi-HPM's Martin.

"We invested significantly in the NPE show, and we were looking forward to meeting new and loyal customers," Martin said.

Still, in other ways, nixing NPE helped machine builders, said Wittmann Battenfeld's Preusse.

"It became a bonus that our resources and energy could remain on our record backlog and not be diluted for our normal NPE show performance," Preusse explained. "If NPE could have added business, most suppliers wouldn't know where to put it."

Everyone agrees, however, that the Plastics Industry Association, which puts on the show, made the right decision. The Washington-based trade group's board of directors said it wasn't possible to hold the in-person show and provide a safe environment at that time and location.

"Florida was open for business, but for a trade show with heavy machinery, there was no way to handle it and ensure safety," Absolute Haitian's Frohring said.

Krauss-Maffei's Bishop summed it up like this: "Not only did the cancellation not allow us to show off our new technology but it also had a financial impact on the Plastics Industry Association. That said, it was too early for in-person events and would have been costly for all exhibitors with potentially poor attendance."

Two months after NPE would have taken place, COVID-19 cases and deaths dropped. Krauss-Maffei teams attended the Foam Expo North America in Novi, Mich., from July 13-15, followed by Amerimold 2021 in Rosemont, Ill., Sept. 21-23 and the Extrusion World Expo North America in Cleveland from Nov. 3-4.

Next year, Krauss-Maffei plans to exhibit at the Injection Molding & Design Expo in Detroit, March 16-17; Plastics Technology Expo 2022 in Rosemont, Ill., March 29-31; and Silicone Expo in Detroit, June 21-23.

Engel also exhibited at the Plastec West/MD&M show in Anaheim, Calif., "with good success," Caprio said, as well as Fakuma in Germany, followed by Expo Plasticos in Mexico in November. Its 2022 show calendar also includes MD&M West in Anaheim again and PTXPO in Chicago.

JSW officials said the company will be participating in several smaller, regional-type shows this year.

At Husky, Zhang said, "As we move into 2022, we are evaluating our trade show opportunities and plan to engage in a mix of both virtual and live, in-person events and meetings where it makes sense and where we can connect with customers in the most effective way possible."

The next trade show for LS Mtron will be Plastec West in Anaheim in April 2022.

"That's where we will be participating jointly with our California distribution agent. We will be introducing our latest high-speed, all-electric series at the show," Gardner said.

Arburg's Kanz said, "Unless conditions change dramatically, we will probably participate in Plastec West 2022 and, of course, 2022 is a K year and we expect to be there in a big way, as always."

Nissei America plans to exhibit at K 2022 as well, while Sumitomo (SHI) Demag will display machinery at the Injection Molding & Design Expo in Detroit and MD&M West in Anaheim in 2022.

Kanz said organizers and exhibitors at Fakuma, where Arburg had a stand, were happy and relieved it took place as a physical show.

"Maybe we didn't see the visitor volume that we have seen in previous years, but still there was a nice turnout of visitors and exhibitors and face-to-face meetings could take place. I hope this is an indication that we can go back, in some shape or form, to the old style of meeting customers," Kanz said.

The pandemic taught machine builders and plastics processors to work smarter. They leveraged technology to stay connected and mitigate COVID-19 risks, Husky's Zhang said.

Engel officials realized that "a lot can happen virtually," Caprio said.

"Therefore, we are offering work from home where possible. Our focus is on finding a good balance between what is needed to work in-person as a team and the convenience of the team members," he added.

Nissei America adapted quickly to provide meeting and technical support via the web, Kato said.

"We offered machine startup instruction videos for our customers who could not have visitors during the pandemic and also offered machine operation training videos for those who need training on our controller," he added.

Plustech's Hampton said company officials knew at the onset of the pandemic that people everywhere would be confined to their houses and facing work challenges, so it introduced a webinar platform called Sodick and Friends.

"The platform runs twice a month and allows many of our industry partners to present their latest technologies and such to the marketplace. Everything from automation, robotics to process development and everything in between is discussed. This has been a great success in these difficult times," Hampton said.

At LS Mtron, Gardner remembers when video meetings seemed novel.

"Now these efficiencies are here to stay and have transformed our way of doing business," he said.

Zoom meetings are still held at Arburg, but more face-to-face meetings are scheduled.

"I would say it's almost back to 70-75 percent of the old-fashioned business of visiting customers and having face-to-face meetings. But it is still a mixture," Kanz said.

Press builders said plastics processors buy more new machines to increase capacity than to replace older machines.

"Many customers would like to have replacement programs to get their fleets younger, but it is the exception," Engel's Caprio said.

At Krauss-Maffei, Bishop said: "Customers are adding machinery and not replacing due to significant increases in utilization."

Most machine builders put the percent of machine buys for capacity at 60-70 percent and replacement at 30-40 percent.

"For new capacity, there is still a strong tendency by the customer to wait until they have actual orders for running in the machine," LS Mtron's Gardner said.

Billion's Kiesl also said customers "wait for the certainty of a specific PO [purchase order] in the their hand."

Ikeda agreed at Sumitomo (SHI) Demag, which has a large inventory of U.S.-stocked machines to help customers meet their delivery schedule.

"In the medical market, for example, a customer may be waiting on FDA approval and quite suddenly have a large order to fulfill," Ikeda said. "They don't want to order the machinery on speculation, but they also can't wait many months to receive the equipment once approval is received."

With the increased sales many plastics processors have posted, Arburg's Kanz said the number of machines bought as replacements might tick up.

"Those companies have to be thinking about what they can do with that money, and sometimes they replace old machines," Kanz said.

Heyse is seeing that at CH America.

"Many of our customers have been methodically replacing old machines with new. This seems to be across both the large and small tonnages," he said. "I would say 50 percent or better of our sales are replacing old machines vs. buying machines for new programs."

Electric injection molding machines continue to make up slightly more than 50 percent of press sales, according to machine builders. However, the mix varies for many companies.

At Nissei America, Kato says 70 percent of its sales are for hybrid electric-hydraulic presses and 30 percent are all-electric.

At CH America, Heyse said with new hybrid servo-hydraulic technology, many hybrids can perform as well as all-electrics in terms of energy consumption and low noise levels.

"These hybrids have advantages over all-electrics on certain applications and vice versa. There will probably always be a market for both types of machines," he added.

At Sumitomo (SHI) Demag, Ikeda said all-electric machine sales are "far higher" than 50 percent, thanks to its motor technology and extensive platform from 8 to 936 tons. But hybrids are in demand, too.

"We take a best-of-both-worlds approach and continue to meet the needs of our customers requiring ultrahigh-speed molding and large parts with our hybrid machine technologies," Ikeda said.

Bishop said all-electric machines dominate the smaller-tonnage machines and Krauss-Maffei officials expect that to continue.

For Billion, the U.S. market is exclusively electric machines.

"We see that trend continuing into large-tonnage machines," Kiesl said.

However, at LS Mtron, Gardner said the market seems to be trending slightly higher with servo-hydraulic-type machines, especially above 500 tons because they are more cost-efficient to operate compared with all-electric presses.

"For LS Mtron, our ratio in 2021 leaned heavily toward servo-hydraulics due to some very large multimachine orders for our popular two-platen, servo-hydraulic machine," Gardner said. "We'll be at about 80-20 in favor of servo-hydraulics for our 2021 results. In 2022, we expect all-electrics to increase their percentage in our sales portfolio."

At Yizumi-HPM, Martin said, "We have not experienced a high demand for the all-electric machines."

Engel's Caprio expects positive trends to continue, or at least stability in all segments.

"Automotive has the chip challenge, and if this gets solved, auto will grow even more than it has been over the past 18 months," Caprio said.

Sustainability and recycling also will be back in the focus of consumer demand and public discussion, he added.

"As a machine manufacturer, we are committed to providing solutions for sustainable production, and we work together with partners to promote circular economy initiatives," Caprio said. "We also find it very important to highlight how plastics can contribute to a more sustainable way of living vs. being the problem."

At Nissei America, Kato expects 2022 to be better than this year.

"However, the growth will be flat if ports and supply chain issues continue," he added.

Yizumi-HPM's Martin has the same expectation.

"We will begin our formal planning process for 2022 soon. The overall outlook will exceed 2021 by no less than 10 percent," he said. "The machine demand remains strong."

Billion's Kiesl agrees. He also points to sustainability efforts as an underlying trend for 2022, particularly related to recycling, biopolymers and sandwich configurations for products like biodegradable coffee cups.

"The outlook is overall positive. Despite some downward pressure from the overall supply chain crunch, we believe underpinning demand is still there," Kiesl said.

So does LS Mtron's Gardner.

"As end users seek to diversify and inoculate their supply chains from potential disruptions and cost increases, we anticipate a further interest in machinery needed to mold products in the USA," he said.

Heyse projects CH America sales will grow at least 25 percent in 2022.

"Some of that will come through increasing market share and some through overall increases in demand as companies move production of certain items back to the states to avoid tariffs and high transportation costs," he added.

At Sumitomo (SHI) Demag, Ikeda said there is a sea of change coming as the automotive industry adds new players and also retools and reinvents itself for upcoming EV platforms.

"Our 2022 outlook calls for improved activity as the U.S. emerges from the pandemic, but this improvement may be tempered by supply chain, microchip and economic factors such as inflation and interest rates, and/or any unforeseen political influences or a resurgence in COVID," Ikeda said.

Arburg officials predict 2022 sales will be on a similar level as 2021.

"Maybe a little bit less, but we have reached a pretty healthy business level in the molding machine market. So even if it's a little bit less, we will still have a good volume," said Arburg's Kanz, pointing to stabilized markets for medical, packaging and electronics.

At Absolute Haitian, Frohring is cautiously optimistic about 2022 for many of the same reasons.

"There's a lot of growth with point-of-delivery medical devices," he said. At Absolute Haitian, Frohring is cautiously optimistic about 2022 for many of the same reasons.

"There's a lot of growth with point-of-delivery medical devices," he said. "That comes with people living longer … and needing medicines such as diabetes and insulin products."

Packaging for storing food also will be strong and the automotive market should get through the microchip shortage and be back, Frohring added.

Still, he's reluctant to project a three-peat about sales growth for machine builders.

"If this is a record year and last year was a record year, I don't believe next year will be a record year," Frohring said. "But it should be fairly good."

Looking back and ahead, Plustech's Hampton said: "It has been quite a ride the past year and a half from a personal and business standpoint. I've seen our plastics industry really rise to the occasion and collectively respond with what was needed to support the effort in this challenging year. I'm sure 2022 will have its share of surprises as well; we'll just be a little more prepared."