By Rob Neilley
Published: July 1st, 2010
Makers of injection molding machines absorbed revenue drops of up to 60% in 2009, but they and their markets are in comeback mode, offering the market much new performance and efficiency technology.
All processing machinery suppliers took a financial drubbing in 2009, injection machine makers as much as anyone. Yet as this Sourcebook goes to press, machine makers are readying an array of new technology to show at K 2010 in Düsseldorf, Germany that will surprise us with its breadth and creativity.
Executives at several machinery firms have told us that, during the slow time, they redirected engineering resources that normally would have supported machines being manufactured onto developing new technology. As a result, most of them were in a good position to support processors as the market began recovering, and as the recovery continues.
Molding machine technology is increasingly designed for and directed at very specific applications in specific markets, more than ever before, and at the same time is designed with making processors more competitive as its top priority.
Q: What event or condition is having the biggest effect on your sector of the plastics industry in 2010, and which one do you think will be the most important in 2011?
Kraibühler: Firstly, the economic recovery is having a major impact on the plastics industry in 2010. Added to this, there is the K trade fair in Düsseldorf. In addition to the latest developments that international experts will present there, future trends will also be featured. This will clearly show the current status of the plastics industry and will indicate the developments to come from 2011 onwards.
Sankovitch: The first K show after the global economic crisis will be the event with the biggest effect for the plastics industry in 2010. Potential increases in costs of raw material, and most importantly energy, will have a critical impact for 2011. Energy savings will become more and more important to the survival of injection molders, and we as machine suppliers must continue to develop and provide energy-saving solutions through machine technology (e.g., servo hydraulics).
MacDonald: The emerging middle classes in developing countries will have an effect on the plastics industry. As a result, we are finding that many of our customers are looking for technologies to help them be more competitive. There are numerous opportunities to help customers develop business solutions that will enable them to reduce costs in the long-term, among them lightweighting initiatives, solutions to help increase the content of recycled material in plastic PET bottles, or services to help streamline energy consumption and optimize operational efficiency in our customers’ facilities.
Anderson: Economic recovery is having a large impact on the plastics industry in 2010. As customers start to invest back into their pipeline, they need to replenish inventory levels. Plastics processors are putting more equipment back into service as they continue to increase capacity utilization. This has significantly boosted business for aftermarket service and spare parts this year.
Looking forward to 2011, greater access to capital should help stimulate equipment investment. We’ve seen momentum in the large machine sector as the automotive, housewares, and construction markets seem to have begun to rebound. We anticipate additional momentum from the fact that good used machines are becoming difficult to find. Additionally, processors have downsized their operations as a result of the recession and are relying upon equipment manufacturers to provide services such as machine maintenance, spare parts management, training, and overall machine uptime. This presents both an opportunity and a challenge for OEMs.
Bernardi: On the negative side, there is the banking industry refusing to lend to the automotive sector and severely restricting capital funding in manufacturing generally. On the positive side, we see a renewed interest in the environment, a green focus, which has increased sales of UBE’s low-energy-consuming all-electric injection molding machines from 720-3900 tons. Also, the increase in oil costs and the related fuel for shipping enhances the benefit of producing large parts near or at their final use point, which requires new facilities and the purchase of new machines. Finally, slow machine replacement during the recession has created an aging machine fleet, and a pent-up need to buy new machines.
Q:What was your company’s top technology development in 2009? What will it be this year? Is there a technology in your sector that processors are overlooking?
Kraibühler: In 2009, we launched our high-performance, hybrid Allrounder Hidrive machine series combining servo-electric clamping units, high-performance hydraulic injection units, and energy-optimized hydraulic accumulator technology. The result: maximum production output as well as short cycle times and reduced energy consumption.
We implemented our Selogica user interface in the controls of Kuka six-axis robotic systems, so now the machine operator can easily program and modify robotic sequences. Setup work and training requirements are significantly reduced and cycle times effectively shortened through synchronization of robot and machine movements.
In spring 2010, we introduced a new micro-injection module, combining an 8-mm injection screw with a second screw for melting the material, thus dispensing with the need for micro-granulate. Developments are continuing this year both in machines and control systems, as will be seen at K 2010.
Sankovitch: Engel had two top technology developments in 2009. First was the new ecodrive energy-efficient drive system based on servomotors and hydraulics that control the drive speed independently of the speed required for the machine. The drive is only active during machine movements, with energy consumption dropping to virtually zero when the machine is idle. Second was the new viper robot generation featuring maximum stability, excellent dynamics, compact footprint, and optimum operator convenience, along with software that ensures faster cycle times, improved productivity, and reduced energy consumption.
Engel technology for 2010 includes expansion of the duo pico machine line to include smaller tonnage sizes of 385 and 440 U.S. tons, and extending its e-motion all-electric machine line to include larger injection units. Processes currently being overlooked by processors are our Dolphin process and long-glass-fiber technology. Dolphin manufactures soft-touch components with a combination of injection molding and foam molding in one machine, and is an alternative for production of many sandwich and polyurethane (PUR) foam components currently produced for passenger car interiors (e.g., dashboard panels, center console components, glove compartment flaps, and inside door trim parts). Long-glass-fiber technology offers excellent features and advantages, especially in the auto industry. LGF is a single-stage process, producing a part that is exceedingly strong and lightweight, resistant to corrosion, and does not require any subsequent finishing.
MacDonald: In 2009 our focus was to develop technologies to help our customers run more streamlined, sustainable operations. Two major systems were a result of this. First is our HyCap system that is specifically optimized for beverage closure manufacturing. HyCap is ideally suited to produce the lightweight, one-piece closures that are becoming increasingly common in beverage packaging. The second is our HyPET Recycled Flake (RF) system, which is optimized for manufacturing preforms with up to 50% postconsumer recycled flake.
Our customers increasingly are looking for ways to get the most value out of their investments by extending the life of existing equipment. We have recently expanded our portfolio of services to ensure that customers achieve and sustain the lowest total part cost over the entire life cycle of a product. We worked with PakTech, a leading manufacturer of carrier handles for bottles, to streamline infrastructure and reduce energy consumption. As a result, PakTech was able to increase productivity by 50% and reduce annual energy costs by 38%.
Anderson: Milacron’s most significant technological development in 2009 was our PowerPak line of electric-based machines with selectable axis configuration (SAC) for the packaging industry.
The line offers unparalleled flexibility in machine design to meet application-specific requirements. And because it is easy to customize, it caters to processors that seek the benefits of a domestic source of high-performance, all-electric and hybrid injection machinery. Additionally, it touts the lowest energy consumption in the packaging industry for thin-wall, high-speed consumer products, cutting energy use by up to 60% compared to competitive machines. As another notable development, Milacron secured exclusive marketing rights for ServTek’s TCS line of energy-efficient heater bands, which are revolutionizing the industry. The MGic system for inline compounding of long-glass-fiber outperforms conventional LFT, injection, and DLFT platforms with faster cycle times, lower investment costs, and superior part properties. Several new product initiatives will be unveiled at this year’s K show.
Bernardi: In 2009 UBE Machinery introduced our latest technology advance in all-electric injection molding with the S-V Series. The S-V improved on the UBE UN S-IV with a 60% reduction in platen deflection, advanced ballscrew design reducing grease consumption by 90%, further reduction of Decibel level to the 60 dbA level, and fiber-optic amplifier digital communication. S-V High Speed machines increased clamp speeds beyond 50 in/sec and injection speeds over 120 in3/sec.
In 2010 UBE will introduce its new Wabi electric machine range. Wabi is the Japanese term for simple and functional, transcending fad and fashion—a minimalist less-is-more concept. This machine will provide all of the electric benefits of environment and economy in a simpler, less costly model.
The ability of UBE high-speed electrics from 720-1550 tons to produce thin-wall, packaging, and disposables at the same or better cycles than high-speed hydraulics, but with low energy consumption and absolute cleanliness, is often overlooked.
Q: Are there particular end markets that are hot now or will be soon for your customers?
Kraibühler: There is continuous growth in the packaging and medical markets. Whereas speed and productivity are decisive factors for the packaging sector, complexity is increasing continuously in medical technology. This applies both to molded parts and assemblies as well as to the production cells used. Thanks to the proven Arburg modular system, Allrounders can be equipped to meet relevant customer- and sector-specific requirements, supplemented by our individual automation solutions, in which six-axis robotic systems with the Selogica user interface are increasingly used.
Sankovitch: The “hottest” market is definitely the medical sector. This sector has been the largest-growing market segment in recent years, and continues to be the strongest market by far. Second would be the packaging market, which will begin to transition from fully hydraulic accumulator-driven machines to all-electric solutions—stronger profit margins will be associated with energy-efficient machinery.
MacDonald: Developing markets with emerging middle classes will certainly drive an increased need for all types of convenience packaging. Suppliers who successfully meet the needs of these emerging markets are those who will maintain, and continue to develop, a global manufacturing footprint with a wide range of sales and service support to effectively meet the needs of local manufacturers in their language and time zone. Many new entrants into the emerging markets are looking for experienced suppliers who have the capabilities and depth of knowledge to support the development of their projects, from part concept through to completion.
Anderson: The medical and packaging markets continue to be recession proof. Because of this, technology such as the PowerPak and Roboshot, which are all-electric, fast, and clean running, is more important than ever. Molded packaging is typically produced where it is consumed, making geographic expansion important in this market. Moving forward, the automotive, housewares, and construction markets will start to rebound. This year, we’ve also strengthened our position geographically, specifically in India as the number one injection molding machinery supplier in that region. We won nearly 60% more new Indian business in 2009 than in 2008. We’ve constructed a new assembly bay there and approved the expansion of our machining facility and capabilities as well.
Bernardi: UBE has found that our housewares, packaging, shipping, and disposables customers fared best during the recession. These customers continue doing well as the automotive sector regains its footing in 2010.
Q: Which breakthroughs or major trends in your segment of the plastics business should processors watch closely?
Kraibühler: The general tasks of saving energy have given rise to new areas in the injection molding sector—for example, the change in the lighting sector and resulting developments in LED technology. Reel-to-reel technology is used along with complex production cells incorporating upstream and downstream actions. We demonstrated such a system at K 2007, producing an LED light strip on a three-component machine in a process that fully integrated all functions. The conductor tracks were produced from conductive PA, reflecting the importance of materials developments that constantly provide for new options and applications.
Sankovitch: Processors should be watching anything new in energy-saving systems—energy efficiency is the need of the hour. They should also focus on advances in surface technologies and new material developments (compounds like wood-plastics or conductive materials).
MacDonald: First is sustainability. Many manufacturers are increasingly aware of the need to minimize the impact their business has on the environment. Lowering part costs, reducing scrap, improving quality, and maximizing operational efficiency are all beneficial from both a business and green perspective as these efforts save money and reduce environmental footprint. In beverage packaging, Husky enables customers to be more sustainable moving into the long-term, including lightweighting initiatives, proactive energy management, and technologies that incorporate higher percentages of recycled flake in plastic bottles.
Second, complete solutions: Many new entrants, as well as experienced manufacturers, are looking to work with one experienced supplier who can provide a complete turnkey system. Rather than purchase a collection of discrete pieces of equipment, manufacturers are increasingly demanding an injection molding workcell that is optimized as a whole to maximize performance, increase quality, and reduce waste and energy consumption.
Third, lighter beverage packaging: Rising resin and transportation costs, growing environmental awareness, and consumer demand are coming together to create an ever-increasing need for lighter-weight bottles and closures. In this case, there are significant benefits to looking at the bottle and closure as a complete beverage package. By considering the neck finish, bottle, and closure together in the early stages of development, manufacturers can better achieve lightweighting goals, as well as produce a better-functioning beverage package overall.
Anderson: At Milacron, we are continuing to explore ways to save resin. We offer technologies that incorporate the use of repelletized and regrind materials. We’re working alongside customers in redesigning parts for wall thickness reductions and continued use of foaming agents/N2 to lower resin consumption. Thinner walls require higher-performance machines with increased pressures and injection rates, so processors and OEMs looking to decrease resin use may need to consider technology upgrades.
Another trend is toward earth-friendly technology. At NPE2009, we successfully introduced environmentally friendly products such as the PowerPak line targeted at the packaging market, and ServTek’s TCS line of energy-efficient heater bands. And we’ve been very successful in converting customers over to this green technology. Because being earth-friendly is most often the result of greater efficiencies, these technologies also improve processors’ production speeds and energy costs.
Bernardi: The trend of greatest consequence in injection molding in UBE’s world of large machinery from 720-7000 tons is the increase in the use of high-flow resins and the constant need to lightweight parts in order to reduce cost and shorten cycle time. This lightweighting is being achieved through reduction of wall thickness, foam processes, gas assist, and water injection. All of these are requiring faster, more repeatable injection molding machines with lower operating costs to enhance the profitability of parts production.
Q: What is your prediction for your industry segment’s growth in 2011? Better than 2010?
Kraibühler: We are convinced that the positive developments of 2010 will continue throughout the next year and that K 2010 will give the plastics industry an additional impetus that will positively influence the future.
Sankovitch: With capacity utilization numbers increasing, 2010 is shaping up to be the first growth year for injection molding machinery in more than five years. Manufacturing is expanding in 2010, with a move to rehiring a permanent workforce (fewer temporary employees), though there will be a lag in seeing the benefits until 2011.
Anticipation for 2011 is utilization numbers closer to 80%, which will require additional capacity and therefore new equipment purchases. Barring a geopolitical or global debt crisis, 2011 should surpass 2010.
MacDonald: In talking with our customers, both existing and new, they all share an enthusiasm about the future, see significant opportunities, and are planning new developments. We are working to provide the products and services to support our customers’ needs and help them to be more competitive.
Anderson: I believe that in 2011, the positive growth trend we’re seeing in 2010 will continue, especially as our customers start to gain more access to capital. The last year was a difficult one for both Milacron and the industry, but conditions continue to improve. Coming out of the economic downturn of 2009, we maintained all of our key customer and supplier relationships. As a result of dedicated, company-wide efforts, numerous cost reduction activities, and an uptick in North American sales during the last quarter of 2009, our North American plastic machinery operations returned to profitable levels and continued upward in 2010.
Despite uncertainty about sustainability of current economic improvements, we’re anticipating continued growth in 2011, especially from new markets. Our China operations have stabilized and offer much growth potential. Meanwhile, India has performed extremely well, opening a new assembly building and working feverishly to expand machining capability to support explosive growth in sales and earnings.
Bernardi: Our view of the injection molding market in North America in the large size range to 7000 tons is good and improving. Coming off an upsurge in quotes, new business, and shipments in the fourth quarter of 2009, we have experienced this same growth in the first quarter of 2010.
The expectations in 2010 are for a very large increase over 2009 in housewares, shipping containers, automotive, and disposables, much of it driven by a need to replace an aging fleet for both efficiency and capability. Growth will continue in 2011 but at a more sedate rate of 5%-7% over the 2010 surge of 12%-15% over 2009.
Next year has a potential for greenfield expansion to locate new facilities close to end markets and avoid the increase in fuel costs as the economy grows. —Rob Neilley
