2015 was a banner year for a number of polyurethane machinery companies, KraussMaffei did unexpectedly well in China and Saip claimed a record year...
Several companies, including Hennecke, reported strong sales into the reinforced polyurethane composite sector for the first time, driven by a resurgent automotive industry's need to take weight out of its cars.
But it was not all roses, the decline in the Russian market at the end of last year and continuing currency weakness in the BRIC nations has taken some of the shine off the situation.
Both Hennecke and KraussMaffei reported strong sales into the automotive composites sector in 2015. In a telephone interview with Hennecke's managing director, Rolf Trippler, he said: "The growing markets were in lamination and the chopped strand mat side of the business. CSM is used in all types of composites, on one side HP-RTM we are successful.
"Load floor technology for the automotive sector was a strong performing area in 2015," Trippler said.
He added: "HP-RTM was a strong business in 2015," because of its increasing use in the automotive industry.
"Parts have to be lighter," he said. "This applies for two reasons, CO2 reduction for conventional automobiles and lighter weight for electric cars.
"Lighter parts mean that the engines of conventional cars use less fuel, and for electric cars, lower weight means greater range," Trippler said.
These views were largely echoed by Nicholas Beyl of KraussMaffei. He said: "Across all continents our composites business was a growth engine. That's really nice to see, because we are well positioned in this field," he said. "We also had a good year in interior trim, flex and composites”.
This technology change into polyurethanes means that companies have a lot of explaining to do.
Beyl added: "RTM is the boom area, and it's still pretty new for our customers. There are many options for using RTM and some of the work we do is to explain these to our customers. We are also doing all of the trials in our labs this time”.
Francesco Abba of Cannon, speaking late last year said: "The electric car and lightweight material production were particular market drivers in 2015. The concept of the low consumption car is picking up pace and attracting a great deal of investment”.
|Table 1: PU equipment suppliers by new machinery sales 2015|
|Full company name:||PU Sales $m, 2015||Total sales, $m 2014||Total staff||PU Staff|
|Esco Group (Edge-Sweets)||13||15.1||50||35|
|Notes: Companies gave values in $ except for SAIP, Converted on 9 March|
Board is interesting
The next large application area to see significant growth was machinery for companies operating in the rigid polyurethane sector.
At over €20m "last year was the highest sales in our history," said Walter Pozzi at Saip, he continued "We are also happy because it was not a blip but rather a trend and we have been able to keep it flowing into this year”.
That happy state of affairs came about, Pozzi said, because "several deals we were working on matured at the same time. Several customers decided to go for investment at more or less the same time, and one line that was supposed to be delivered in December 2014 was delivered in January 2015 which contributed to our high figures”.
Success came from orders for a range of panel products: "Rigid faced panels, flex faced panels other panel types are becoming increasingly important" to the firm, he added. Commercial refrigerators are becoming more and more important for Saip too, Pozzi said.
In 2015 we had "a very good result in the North American market, and made the last sales in Russia before they closed the market," Pozzi said.
Repeat business was very important to Saip's performance in 2015, he added: "We have a huge customer in insulation panels that has reordered several lines from us. It is very difficult to win the first order but once the same customer is reordering, it is means they have been very satisfied," Pozzi said.
Eraldo Greco, at OMS speaking in March said: "Last year was a good year and the first quarter of 2016 has started well.
"Highlights of 2015 included selling two lamination lines for metal and flex-faced panels in South Korea. These are high speed lamination lines and we supplied the wet and dry side as well, with help from our OMS Automation division," Greco said.
He added: "2015 marked our return to the refrigeration sector. Two notable projects in the UK include a complete foaming line to make supermarket display cabinet refrigerators and an automated foaming line for single and double door steel cabinets”.
OMS was also chosen by Italian company ISA to convert their ice cream and pastry cabinets to pentane, he said.
"Because we compete with tailor-made solutions, we do not compete with local and small companies which produce standard and low value products," he said.
|Table 2: PU machinery companies -- General data and plans|
|Plants||Total m2||R&D as % sales||Services supplied||Plans for 2016|
|Company name||Location||T||R||AS||SP||TS||E||A||D||U||C||B||Co||Web address|
|Esco Group (Edge-Sweets)||USA||NG||8300||♦||♦||♦||♦||♦||www.edge-sweets.com|
|Impianti OMS 3||Italy||4||18000||2||♦||♦||♦||♦||♦||♦||♦||www.omsgroup.it|
|Tec Mac 1||Italy||1||10000||12||♦||♦||♦||♦||♦||♦||♦||www.tecmac.com|
|NOTES : Firms not giving information do not appear.|
|Services: T= Turnkey; R= Trial Runs; AS= After sales support; SP=Spare Parts; TS=Trouble Shooting; NG= Not Given|
|Plans: E= Expand; A= Acquire; D= Divest; U=Upgrade; C=Close; B=Build; Co= Consolidate|
1= 2000m2 covered, 8000m2 storage
2 = Germany (Munich), Germany (Viersen), Germany (Georgsmarienhütte), Italy (Abbiategrasso), United States (Florence, KY), China (Haiyan), Japan (Aichi)
3 = Covered area: All 4 manufacturing Italy
4 = Derbyshire and West Midlands, UK
5 = Inverigo (Co), Italy
|NG =Not given|
Crossing the pond
In the US, Ross Willoughby, vp finance and marketing at Con-Tek based in Minnesota, said his firm's business had benefited in 2015 from an order from a mid-western based garage door maker.
A growth in interest in the product - which Willoughby said provides better insulation and structural strength - called for Con-Tek machinery for the production of foam insulated doors.
The company's work with automobile industry players around reaction injection moulding (RIM) machinery had also kept Con-Tek busy, he said.
Rick Hungerford at ESCO Edge-Sweets said: "2015 was a strong year in general”. Edge Sweets makes standard polyurethane dispensing equipment and has a range of cutting equipment.
"This makes our customer base a little bit more diverse than other companies." Hungerford added. "On the cutting side of things our wire cutter sales were very, very strong [in 2015] with record sales in that sector. The bulk of the sales were in the US and most of the sales went into the industrial pipe cover industry.
"We are seeing a little pullback now, which is down to the oil price," Hungerford said.
In terms of the dispensing side of the business, Hungerford said: "Building products are the hot sector for us. We are working with several different customers in that sector who are building large lines. These are processing products that contain filled systems such as expandable graphite and mineral fillers”.
Hungerford added: "Looking 2016, we have a couple of machines in development. One, is designed to allow users to add fillers and fibres, this device could allow you to produce filled composites in one shot.
Back in Europe some of the smaller firms had mixed fortunes in 2015, Philip Hindson at AutoRim said: "Rim-Mix low pressure sales are going well - particularly since the introduction of hot water cleaning system AutoRim Hot Wash. It works in parallel with conventional solvent cleaning but reduces solvent use by up to 80% making low pressure processing a more environmentally responsible option,” he said.
The AutoRim Hot Wash has been successfully retrofitted to many brands of low pressure machine, Hindson added.
|2015 Sales by geographic region (%)|
|Full company name:||Europe W||Europe C/E||MEA||America North||America South||SEA||China||Japan||Aus||Other|
|Cannon||--- 29 ---||--- 26 ---||---27---||18|
|Covestro Elastomer||--- 40 ---||--- 30 ---||30|
|Esco Group Inc. (Edge-Sweets)||--- 1 ---||--- 98 ---||--- 1 ---|
|Firms not giving geographic breakdowns do not appear.|
PU machinery maker Tec Mac is optimistic about the potential for growth in 2016 after a good year of trading.
Speaking at the end of 2015 general manager Massimo Monchiero said his firm was "quite happy with 2015" adding that "at last the automotive market is moving". He said that while two thirds of the firm's business comes from retrofitting machines, almost all machinery sales were for new models.
"It was an optimistic year and we have good orders for 2016. For us it seems that something is moving in terms of the economy and potential business growth. Higher levels of research of the company's website was an indication of business moving in the right direction," he said.
Elena Sixto, sales and export manager at Spain's Ingenieria del Poliuretano Flexible (IPF), said the highlight had been growth in the company's contacts base. "The new contacts and opportunity for business but also getting to know our current customers on deeper levels," she said.
"Customers were more open to investing in general during 2015 than before but the levels have depended on the client. There do not appear to have been so many constraints on investing as previously but at the same time some customers do not have an opportunity to invest," she added.
The biggest change in the world market for polyurethane machinery in 2015 was caused by political and financial events outside the polyurethane machinery makers' control.
"The business in China was remarkably strong," said Beyl, "despite the negative headlines you have seen about the economic climate in China. In terms of RTM, we improved on 2014”.
"In China, and we are talking mainly about automotive business, my assumption is that Chinese automotive production is gearing more and more towards premium brands, so Tier 1 Suppliers who are supplying European plants also supply domestic plants equipment. This is more and more high-end production equipment. And that helped us," Beyl added.
''The business in Russia is very, very depressed, there are still conversations with customers but it takes a very long time because the economic climate and financial options are not very good. The exchange rate is miserable and that's not helping our business at all," Beyl said.
"In South America, particularly Brazil, this is not that good because of the economic situation," Beyl said.
Hennecke, however, saw the situation south of the Rio Grande a little differently.
"We saw a number of strong regions, including Mexico," Trippler said. "This is because of the way that the car industry there is developing. When you have existing systems with the automotive industry or Tier 1 suppliers, and the then their production grows into Mexico, your equipment will be installed there. So our systems which are installed in Europe will be installed there”.
Saip's Pozzi confirmed that "Russia became very difficult'' in 2016. From our point of view the economic crisis generally in Europe is not yet over. We export more than 90% of our sales out of Italy, and more than 500% are out of Europe.
Weak exchange rates and economic pain is felt among all the BRIC countries.
"The currency situation is affecting our business. In the past year the exchange rate between the euro and the rouble has gone from € 1 = 40 roubles to around 90 roubles," Pozzi added.
Pozzi continued: "The oil price also badly affecting the Russian economy so far Russia is a very, very tough market. China also devalued, so some investments our customers were talking about have been put on hold. We see the same in India, South Africa, and all the BRIC countries where most of us were looking for business.
Not so for Italy, however, as all sales were exports he said. Europe, the Middle East and Asia had brought custom he said. "We also saw growth in Western European markets," Monchiero added.
Specifically, "we sold two plants for the Italian PU industry this year and we also installed two lines in Poland during Q 1 2015", Monchiero said.
"Indian markets for these products are also growing and we did a good year there," he said. "The country has plans for the renewable energy sector and reducing coal use. The focus is on wind turbines as a replacement and we benefit from this decision," he added. He predicted the same trend for China, due to the importance of energy use and the green economy in its latest five year plan.
In terms of geographical trends, he said there was a business decline in Asia during the second half of the year, after growth in the first half. He said the stop on growth in China was due to a building crisis there.
Germany remained stable but Italy was still in recovery, he said. Russia markets were suffering due to embargoes he added.
Edge Sweets did sell a "few units overseas in the south-east Asian market in 2016, Hungerford said."That was a good win for us," said Hungerford.
'We project machinery growth at around 4.5% for the coming years. This is slightly smaller than the “growth in polyurethane materials," Trippler added, "it is because people always buy slightly more capacity than they need”.
Growth for 2016
Trippler added: "If you look at the polyurethane industry worldwide, the largest area of consumption is Asia, with about 40%. We have a strong foothold in the Asian market, and we have grown our market share in that region. We were very successful in North America and the market there is very positive”. "2015 turned out really well for others, and I'm still cautiously optimistic for 2016," Beyl said.
By the numbers
As in previous years, the largest slice of new machinery reported in the survey came from storage and handling equipment, at 154 pieces and foam and cutting in shaping equipment at 264 pieces.
This is not surprising, since both of these sectors comprise equipment can be disposable, or very small.
However, the larger-scale businesses experienced a significant growth, although the number of rigid foam panel lines reported as installed this year at 61 is about half the 120 reported last year. This year, OMS, which competes in this market, declined to give the number of units installed.
Anecdotally, the total number installed worldwide is likely to have grown compared to last year.
SAIP reported it had installed 48 machines over the course of 2015, down very slightly from the 52 in installed in 2014. In 2014, OMS installed 48 such lines worldwide.
Rigid foam equipment supplied to the appliance sector, in 2015 was reported as 17 units. This compares with 44 in the previous year. However both Cannon and Hennecke declined to give data on the number of units supplied.
Hennecke said that 15.7% of its sales came from both rigid foam blocks and panel sectors in 2015.
Rigid foam spray equipment accounted for just under 18.5% of the company's sales in 2015. More generally, this was a sector which saw marked growth compared to 2014. A total of 31 units were reported in the survey as being supplied in 2015 from a number of companies, but predominantly Italy's Tec Mac.
The 25 flexible slab stock lines installed in 2015, are probably on a par with the 29 reported in the 2014 numbers. In 2014 a total of 10 flexible moulded lines were reported to Urethanes Technology International in the survey, in 2015 that number had changed to 17,while the automotive sector was doing very well in 2015, at least part of that increase may be attributable to the changing shape of respondents to our survey.
Sector by sector
In terms of applications sectors. The automotive parts segment is growing fastest at the moment according to four respondents, six feel that furniture and bedding is the most exciting sector. The building and construction sector is also cited as being particularly fast growing by four or our respondents, Esco, Tec Mac Autorim and Saip.
Only Covestro (formerly Baule) and SAIP have refrigerated appliances as an exciting sector. The other sector is notable for its diversity. Habib Moujaes at Fincorp has seen growth in the kitchen and bath-sponge businesses from his base in Lebanon.
Nicholas Beyl, managing director at KraussMaffei has seen growth in tool making and equipment for post processing polyurethane parts.
There has been a drop in companies seeing high levels of purchases in the general industrial sector for the third time.
Europe is once again becoming the fastest-growing sector in polyurethanes machinery sales. Seven companies in total, Western Europe (four) and Eastern Europe/Central Europe (three) described the continent the region where machinery was growing fastest at the moment.
The Middle East Africa region however is still a strong growth area according to the survey. Six of the respondents cited that area as being the fastest-growing region for machinery sales. North America was cited as the fastest-growing area by three of the respondents. With one company suggesting that sales to south America were growing most quickly that puts the hemisphere on an equal footing with Western Europe, according to the survey.
Few companies suggested that south-east Asia and China were growing quickly, with two company saying south-east Asia was fastest-growing and one company saying China was the fastest-growing country.
Once again no companies in our survey suggested that either Japan or Australasia were growing quickly for sales.
This perhaps reflects the general slowdown in the Japanese polyurethane industry this year. Figures from MITI the Japanese International Trade and Industry Department show that the country produced 12% less polyurethane in 2015 than in 2014.
Although it’s important to know which sectors are growing quickly, it’s also important to know where sales of machinery is strongest. On this measure, south-east Asia China Japan and Australasia do rather better, but still lag some way behind established markets in Europe, North and South America and the Middle East and Africa.