By Bruce Geiselman, Karen Hanna and Lynne Sherwin
Plastics processors — along with the entire country — may have felt that they spent 2021 in a defensive crouch, constantly waiting for the next punch from a different direction.
When Plastics Machinery & Manufacturing did its first machinery buying survey in October 2019, we included a question on how trade policy was affecting processors’ decisions. One year later, after COVID-19 threw every company’s plans into disarray, we added another question to reflect that massive upheaval.
For our most recent survey, just one or two questions about factors influencing buying decisions were no longer enough. Kinks in the supply chain. Soaring resin prices. The labor crunch. The state of the economy. And, still, the pandemic.
Yet processors are optimistic that the industry will prosper this year. Sixty percent of respondents to PMM’s third annual survey, conducted in October, and others interviewed separately believe their business will be better in 2022, and 35 percent expect it to remain stable.
“The industry is feeling the pressures of labor shortages, of supply chain issues. At the same time, there’s still a sense of optimism that growth will continue in 2022,” said Perc Pineda, chief economist for the Plastics Industry Association (PLASTICS).
He pointed to the 64 percent of respondents who said they plan to buy primary processing equipment in 2022, up slightly from 61 percent in last year’s survey.
“That tells you that the underlying assumption of the processors, those who are purchasing the equipment, is actually positive. And it lines up with what’s going on in the economy. We’re not at full capacity,” Pineda said. “There’s still growth to be reached in 2022. We’re not expecting to close the gap in our actual output until 2023. ... It’s positive growth for equipment manufacturing, and for the plastics industry in general.”
Respondents said they need new equipment to expand capacity (68 percent), replace existing equipment (61 percent) and/or add new processing capabilities (37 percent). Investment in primary equipment will be greater in 2022 than in 2021 for 63 percent of those who are buying.
Mack Molding, a custom molder and contract manufacturer, is investing in several large presses with clamping forces ranging from 1,000 to 2,500 tons, all to handle new business, according to President Jeff Somple. “We also will be investing in automation where we can. The new presses will all have robots, and we are looking at what we can do with auxiliary processes such as drying and blending.”
Custom injection molder Steinwall Inc. is upgrading its machinery on a rolling basis. Maureen Steinwall, CEO/CFO, said it’s about utilizing new technology for better efficiency.
“The business case to get rid of the older [machines] and bring in the newer is getting simpler to make. When we were a growing company, you held on to everything because you needed the footprint,” she said, but now, the way for her company to grow is to do things better.
The majority of survey respondents, 61 percent, said their companies utilize injection molding, while 29 percent are involved in making or repairing molds and tooling. Other processes included thermoforming (20 percent); pipe, profile or tube extrusion (20 percent); blow molding (18 percent); film or sheet extrusion (17 percent); recycling (15 percent); additive manufacturing (12 percent); compounding (9 percent); and rotomolding (8 percent). Respondents could select more than one process.
Thirty percent of the responding companies reported annual sales revenue of less than $5 million; 29 percent reported revenue between $5 million and $25 million; 23 percent between $25 million and $100 million; 18 percent said their annual sales topped $100 million.
Primary objectives: Home goods, construction, medical
Makers of injection molding machines (IMMs) say they’re seeing rising demand for household, construction and logistics products, along with continued strength in the medical market and recovery in the automotive industry.
“In the Technical Molding business unit, which includes sports and leisure articles, household goods and products for the construction and logistics industries, the boom in demand triggered by the pandemic is still being felt,” said Stefan Engleder, CEO of Engel Group. “Technical molding has caught up with automotive in terms of revenue and is expected to remain at a comparable level in the coming years.”
Brian Bishop, VP for new machine sales at Krauss-Maffei Corp., is seeing the same trend in sales of the company’s larger machines. “What’s really hot for us right now is anything that’s related to building or logistics. The fact that we’ve got so many people working from home, [making] repairs or modifications or upgrades to housing, I think that market has been extremely strong for us … and that whole logistics market, the Amazons of the world.”
Bishop said the medical market continues to thrive, and he doesn’t expect it to slow down anytime soon.
Along with medical parts, goods like storage bins, power tools and appliances are driving sales of Absolute Haitian’s machines, said co-owner Glenn Frohring.
“The medical market, obviously, was the strongest market, starting with the PPE, but as time went on, there were big investments in new capacity for pipettes, test kits and the syringes needed for vaccination,” said Friedrich Kanz, president of Arburg. Engleder noted that chronic illnesses like diabetes and respiratory disorders are also driving growth in the medical parts industry.
A representative for a packaging maker with facilities across several states told PMM his company would be investing in IMMs and auxiliary equipment to support new business and continued growth, especially in COVID-related and e-commerce packaging.
Kanz, Engleder and Peter Gardner, business director of LS Mtron Injection Molding Machine USA, all said the automotive market is showing signs of a rebound after two slow years, but the shortage of electronic chips has kept a foot on the brakes.
Extruders needed for building, packaging
The construction boom is also powering sales of extrusion equipment, along with packaging and medical needs.
Jim Murphy, president and CEO of Davis-Standard, cited strong demand for “cables for power distribution and communication, all types of food and protective packaging, building and construction products, medical tubing and PPE items” as driving demand for the company’s extruders, feed screws and auxiliary equipment.
Murphy said his company saw “unprecedented levels of machinery orders in 2021” — much of it to meet pandemic demand for swab sticks and other medical needs, as well as consumer products like plastic lumber, residential hose and pipe — but expects the trend to moderate this year.
Davis-Standard also reported a greater need for waste bags, flexible packaging and protective packaging for shipping.
Kuhne’s Triple Bubble and Cool Bubble blown film lines drew interest to produce lidding films, stand-up pouches and barrier shrink bags, said Adolfo Edgar, VP of blown film systems. On the sheet side of Kuhne’s business, extrusion lines for thick sheet and thermoformable sheet were hot items, said Jacob Dahl, Northeast sales manager.
“Packaging is a very big deal out there — anything that can reduce that carbon footprint,” said Linda Campbell, VP of sales for Entek, which makes twin-screw extruders, barrels and replacement parts.
The company also saw growth in building products and has fielded even more inquiries since the bipartisan infrastructure bill was passed in late 2021. “A lot of different things that are extruded are used in construction,” she said.
Entek is projecting a 40 percent increase in equipment sales this year, and is building a second facility in Henderson, Nev., that it expects to bring online in the first quarter of this year.
“As our operations have rebounded and steadied, interest for home products that are made in the USA has increased,” said Marshall Murdough, manager of ecommerce for Simplay3. His company was adding a new Ferry 2600 rotomolding machine to help meet demand for toys, mailboxes, booster seats and more.
A shift in blow molding
Pandemic demand for food and beverage packaging, wipes, cleaning products and hand sanitizer fueled a surge in sales of blow molding equipment. While those markets remain strong, other products are seeing an uptick. Brian Marston, CEO and president of Uniloy, said interest is increasing in the production of construction and automotive parts, as well as industrial bulk containers. He expects a strong year.
“We see some strength in automotive applications and expect that to increase in the future, including new applications for alternate-fueled and electric vehicles,” said Monica Preda, regional sales manager for ST BlowMoulding. “There is growth in the recreation areas, construction and DIY home projects.”
Bob Jackson, founder of Jackson Machinery, which sells new and used blow molding equipment and refurbishes older machines, said demand for bottle machines has slowed. But he has been surprised by a growing market for accumulator-head machines to produce a range of consumer and industrial items, such as cases for power tools and intermediate bulk containers to hold large volumes of liquid such as bleach or oil for transport.
“On the accumulators, the used machinery industry is without very much machinery at all. The new machinery has not filled in,” he said. “It appears that the desires of everyone to have machines are not being fulfilled in new machinery orders.”
Jackson is seeing more companies buying machinery to make their own bottles, rather than purchasing bottles from busy suppliers. That presents a challenge.
“When you get a client that knows what they’re doing, there’s very few questions. It's just, bang, it’s gone. But now you’re spending time setting up training sessions and trying to inform the new people what they need and how all that works. And that’s kind of fun. But once again, it’s not in the normal course.”
The labor shortage demonstrates the need for automation and the improved productivity of newer machinery, Preda said. “Using old equipment and doing things as we always have in the past is proving quite problematic.”
Auxiliaries can boost productivity
That labor crunch is helping to drive sales of auxiliary and automation equipment, according to Pineda and others.
“In the short run, you cannot really alter your labor-to-capital ratio by just changing labor, because you don’t have workers at the moment. Short run, you can only up your production by tapping into technology. And that’s really the role of auxiliaries,” said Pineda, PLASTICS’ economist.
Somple, of Mack Molding, called the workforce crisis “our No. 1 impediment to growth. We could hire dozens of people today if they were available. We would be purchasing even more presses, but we need people to operate them. This also has influenced our decision to look at bringing automation into auxiliary and secondary processes.”
In PMM’s survey, 65 percent of respondents said they plan to purchase auxiliary equipment other than automation this year, and 56 percent of those plan to spend more than in 2021.
A buyer for a custom injection molder noted that his company has been in the process of upgrading its dryers and loaders, phasing out desiccant dryers and moving to vacuum dryers. An additional chiller was also in the company’s plans to add more versatility in production, along with automation expansion.
Sam Rajkovich, VP of sales and marketing for Conair, said customers are buying resin in bulk for better pricing, “so we’ve seen increased demand for railcar unloading systems, silos, surge bins and really anything storage-related. And once you add increased storage, there’s a demand for the material-handling systems to go with it.”
“Material is bad. ... you just can’t schedule things anymore properly. You don’t know when you’re going to get materials,” Steinwall said. She doesn’t expect manufacturers like her injection molding company to stay as lean as they were before the supply chain crisis. “I think people have learned their lessons a little bit.” As resin has become more expensive, David Preusse, president of Wittmann Battenfeld USA, said his company is seeing increased demand for granulators, blenders and loaders to recycle sprues and scrap back into production.
Preusse, along with Marston, of Uniloy, and Kanz, of Arburg, all noted increased interest in integrated cells and turnkey systems that include auxiliaries along with primary machines. “We think customers like the ease of a one-stop shop; they know it will all work when it was designed by a single source,” Marston said.
Automation helps close the worker gap
In the 2020 survey, 48 percent of respondents planned to invest in automation in 2021; that number jumped nine percentage points in 2021’s survey of 2022 buying plans. Eighty percent of those buying new robots and other automation equipment are increasing their investment, and just over half plan to spend more than $100,000.
One respondent put it bluntly: “We cannot get enough workers, and their cost is skyrocketing, so we need to automate to eliminate them as much as possible.”
OEMs are hearing the same. Preusse said Wittmann Battenfeld’s sales of automation equipment are at an all-time high, due to multiple factors: “One, most customers report a shortage of workers. Two, robots do not have pandemic exposures or sickness. They just keep running. Three, clients are replacing older robots. Four, clients want automation besides pick-and-place molding cells for added work steps ROI.”
Krauss-Maffei has launched a new division to help customers “take automation to the next level,” Bishop said. “It’s frequent that I go into injection molding houses, and they can’t run all the machines because they don’t have enough labor to run the process. So, we really want to be part of the solution there.”
While the company has previously focused on six-axis or pick-and-place robots, Bishop said, it is now aiming to find ways to take labor out in post-processing tasks such as inspection, trimming and boxing.
Yushin America said in a statement that the company is seeing interest in downstream applications that reduce the need for beside-the-press labor, including inspection, assembly and packaging, allowing companies to stay competitive in the tight labor market and enforce social distancing. The company also reported “a huge increase in demand for our frame-mounted palletizing robots,” especially its PA series, which is compact and configurable for several different carton sizes and palletizing arrays.
“We are seeing customers purchasing robots and/or automation for the first time, many of whom would never have considered it a few years back,” said Raul Scheller, managing director, North America, for Sepro. “They have made this decision in order to stay competitive, and they have seen a good return on their investment. Plus, it provides them with full control of their operation.”
Cole Bowman, regional sales manager for Sepro, added, “Essentially every machine is being bought with a robot. We’re seeing high demand in most markets. The freight costs and delays have resulted in more manufacturing jobs in North America, and, as a result, our customers are looking for more machines and robots.”
Absolute Haitian offers robots with every machine proposal through its sister company, Absolute Robot Inc. (ARI). Frohring said ARI has seen sales jump for both traditional and six-axis robots for automating existing machines.
Jackson said automating in-mold and after-molding applications, such as takeout and pick-and-place, costs less in the long run than labor. “If help was easy, why spend the money on capital investment? Now, help isn’t easy. And capital investment is cheaper than more help.”
Taking control, going digital
It’s not just robots that are helping companies overcome the labor shortage. Companies are investing in control systems and other technologies to help make up for the lack of workers and high turnover.
Campbell said Entek has seen processors looking to upgrade their control systems and add ancillary equipment to help reduce the chance for human errors in processing. One example of such equipment is a vacuum stuffer that cuts down on the need for screw changeovers.
“Newer controls take a lot of the guesswork out for our customers. The controls are more sophisticated, more repeatable than a 20- to 30-year-old machine,” Bishop said. “So, we do see a lot of customers replacing their old machines in order to become more efficient.”
Of companies responding to the survey, 68 percent said the labor shortage had a negative effect on their business in 2021, and one-third said they plan to spend more this year to help offset it.
Engleder, of Engel, said the labor crunch is a reason to invest in digital solutions. “It’s about supporting production workers and ensuring consistently high product quality, even if skilled personnel are not present on every shift.”
Industry 4.0 capabilities can help manage the shortfall and compensate for the lack of experienced workers. Murphy said Davis-Standard’s DS Activ-Check cloud-based platform “harnesses digital transformation to simplify complex process data to increase operator effectiveness,” offering an easy-to-understand visual depiction of equipment performance, process conditions, product quality and more.
“We’ve had some customers tell us that they sometimes have 200 percent turnover of machine operators in a given year. With turnover like that, it is very difficult to train and maintain the skills to operate the equipment,” Conair’s Rajkovich said. “So, we as manufacturers are trying to make the equipment as simple as possible to learn about and operate.”
He said Conair’s common control, released in 2021, offers the same user interface on the majority of the company’s auxiliary equipment to shorten the learning curve, and he expects more companies to implement the technology this year.
Digitalization in plastics manufacturing is a sea change comparable to the move toward autonomous operation of vehicles, Engleder said. The process is becoming more complex, and eventually, “injection molding machines will regulate and optimize themselves independently. ... Digital solutions make it possible to exploit the full potential of injection molding machines and optimize production processes on the basis of the data generated.”
He said Engel’s performance.boost tool uses the expertise of data scientists to help customers use analytics to optimize production and troubleshoot.
Kanz echoed the importance of digitalization, citing his company’s arburgXworld customer portal, which provides customers with easy access to all relevant data about every Arburg machine they are operating, and its new AnalyticsCenter, along with assistance packages for setup and operation.
“The next phase would be full implementation of AI [artificial intelligence]. But we don’t have the workforce to bring us into AI,” Pineda said. “We need AI experts to begin with; there’s also a shortage of talent there. And so those things are also taking [time] in terms of solving whatever labor shortages we have at the moment. And it’s not unique to the plastics industry.”
Under pressure to improve circularity
Sustainability is another major driver of innovation and machinery investment, as governments and the public demand circular solutions.
“It impacts our approach to equipment design and engineering,” said Murphy of Davis-Standard. “For example, we’ve seen more demand for processing biomaterials and mono-material structures to address environmental concerns while reducing the overall amount of processed material.”
The company is incorporating more efficient equipment and feed-screw designs, continuous process monitoring and performance analytics.
“If you read the paper this morning with the comments about plastics and reducing plastics and how our recycling is so inadequate, there’s going to be nothing but growth with the recycled products in the years to come,” Campbell said. Entek is seeing increased demand for its twin-screw extruders that can handle biopolymers or a high percentage of recycled content.
“Customers want to know about PCR [post-consumer resin] and bioresins; that’s why we continue to develop machines and molds with efficient use of plastic resin, energy and water as our top priority,” Marston said. He pointed to Uniloy’s PCR multilayer head and its Dura-Lite molds for producing lightweight containers.
Adolfo, of Kuhne, said sustainability is “gaining traction, but it is a slow process.” He noted some processes are easier, such as using PCR PET from water bottles to make sheet for food trays, but it’s harder to replace multi-layered barrier films with mono-material.
“Controlling the overall weight of the product is something customers definitely are interested in, especially in larger-tonnage applications,” Gardner said. “The cost saving of keeping the part weight on the lower end of the part-weight distribution bell curve can be quite high.”
Reduction and reuse of scrap is a goal for many of ST BlowMoulding’s customers, Preda said: “The elimination of more scrap and the ability to use far less expensive color and additives are huge improvements, and we can now utilize virtually all scrap, treating it carefully and not losing it. ... Material savings are almost always a huge part of the improvement as parts are updated.”
Rajkovich said Conair has seen increased demand for silos, blenders, dryers and other equipment to help customers produce packaging with higher PCR content, likely due to the increase in legislation and municipal mandates. He has also seen more interest in size-reduction technology for in-house scrap recycling.
At Elevate Solutions Group, an injection molder and maker of contact lens sample kits, sustainability is an important business principle. “We try and recycle everything we can in the building. So, we reuse all of the regrind, everything that we can in the building. So, we reuse all of the regrind, everything that we can. We are buying plastic pallets to keep reusing over and over again instead of wood pallets,” co-owner Michael Sinclair said. “We’re trying to just look for every avenue we can to be as green as possible in the product that we make and within our facility. That’s super important to us.”
To incorporate PCR into its operation, Elevate is investing in a new blender.
A representative from Canon Virginia Inc., which serves as the manufacturing, engineering, recycling and technical support center for Canon in the Americas, and also provides injection mold making, contract manufacturing and aftermarket services, said the company continues to look for ways to improve its recycling technology. Canon follows a zero-landfill policy.
Bishop called more sustainable processing “a huge segment for Krauss-Maffei,” which offers technologies such as co-injection for trash cans and logistic parts, and equipment that allows extruder users to reprocess materials.
Kanz said Arburg is “meeting all the standards and most probably exceeding them through our arburgGREENworld program.” For example, the company’s aXw Control PressurePilot feature automatically balances material flow in multicavity molds to eliminate the need for overpacking some cavities.
“It may not seem like saving a gram of material is very significant, but multiply that by millions and millions of parts, it all adds up,” Kanz said. PressurePilot also improves processing of bio-based resins, and is a component in a special “recyclate package” that simplifies processing of recycled materials.
Looking to the future
So, what issues will PMM’s next survey need to address? Will COVID be in retreat? Will workers come flooding back into factories? What other opportunities and roadblocks may lie ahead?
Pineda said he expects the industry to continue to grow this year, but at a slower rate than in 2021. “As a mature industry, we would normally track the growth of GDP. [In 2022], we think that the economy will grow by 4 percent.”
What happens with COVID will still have an effect, machinery manufacturers say.
Edgar, of Kuhne, believes the rush for pandemic-related equipment has reached its end, and that equipment already commissioned will satisfy requirements for pandemic needs for the near future.
“We did not see any slowdown in business in 2021. Haitian is on pace to ship over 50,000 machines globally this year with business up about 20 percent from last year for the U.S. and Canada,” Frohring said. “Regarding 2022, we anticipate a leveling-off of business activity rather than the aggressive growth from last year. But predicting business in this current situation is a fool’s endeavor.”
Preusse said the lasting effects of trade policy, worker shortages, COVID-19 mandates and sustainability measures like plastic bans and taxes are still unclear. “The pandemic already seems like a never-ending constant dynamic of new mandates, variants, vaccination rules, etc. that have not made managing through these high-backlog-demand, low-inventory times any easier.”
While the pandemic made companies talk more about reshoring, Campbell said the labor shortage has made that more difficult: “You can’t invest in new plants in the U.S. to help the supply chain issues if you have no employees.”
“I think you have massive external events that affect all industries, ours included, whether the events are the disease, or political," Jackson said. "It’s just the constant. What do we do next? Everybody is looking for some answers they aren’t getting."
Somple sees pandemic fatigue affecting his workers, even as Mack Molding has stayed busy. Looking to 2022, he said, “We are always optimistic — business has been good, but it could be even better. We were busy throughout the pandemic, and there is still a lot of new work coming on board. If we can staff for it, we will be in great shape.”
