By Louise McHenry,
Recovery in the polyurethane machinery market continued in 2011, as companies saw improvements in sales across most regions, and strong order books moving into the start of 2012.
Participants in UTI's annual machinery survey reported good balance sheets and growth across the world, particularly in the Far East and South America.
Frimo Lotte GmbH of Hansaring, Germany expects 2011 PU sales of $84 million, a 53 percent increase from 2010. Similarly, Impianti OMS of Verano Brianza, Italy, reported a 34-percent increase in sales last year, reaching $35 million. Frimo told UTI in the survey that sales were growing fast across the world, particularly in Europe, North and South America, and in Asia. OMS said it needed more space to cope with its rapidly expanding business.
The majority of companies reported increases in PU machinery sales, although a few, such as Fill Gesellschaft GmbH, noted a drop in sales. However, Fill, which also makes wood processing machinery, increased its total company sales considerably.
Cannon Group reported an exciting 2011; Max Taverna, communications consultant to Cannon, told UTI that 2012 is "rich with projects." The Italian speciality machinery maker made over €200 million ($252 million) last year with 50 percent of sales in Europe, including Russia. Germany and Eastern Europe were very lively, Taverna said in a 19 April interview at UTECH Europe. Taverna added that the vitality of the UTECH exhibition reflected the "vitality of the business," though he noted that most of that vitality was outside of Europe.
Munich, Germany-based KraussMaffei Technologies GmbH's business is booming across the world, Nicolas Beyl, the new boss of the company's reaction process machinery (RPM) business, told UTI in a 24 May phone interview. The European business was "excellent for us," but he noted that he was recently in the US and "the first question from all customers and business partners was 'how are you doing in Europe?' They are even more concerned than we are in Europe."
Hennecke GmbH also "had a very good year in 2011," despite the economic crisis, Rolf Trippler, the company's managing director, said. The continuous insulation market was "quite promising," and demand was high for slabstock and automotive moulded foam. The company received a lot of orders in Europe, as well from the US.
Hennecke has high expectations for 2012, but Trippler said he wasn't sure if the strong start to the year would continue in the next six months. "There are still a lot of projects but not these mega projects that we had end 2011, beginning 2012."
There are of course issues and Trippler mentioned the economic crisis in Spain. Hennecke has an office in Barcelona, and historically, had a good business in continuous panels there, but it has been affected by the continued downturn. "We hope that Spain will see a turnaround in the next two years, but there is a question mark," he said. However, Trippler said that in general, "even with the market, we are happy."
A number of companies, including Roman˜ d'Inverigo, Italy-headquartered Saip Srl, noted a weaker start to 2012 than expected in Europe, especially after a strong 2011. Walter Pozzi, managing director of Saip, told UTI that there seemed to be a lack of confidence in the continent and that he did not expect this to change for Saip during the rest of the year.
Likewise, Marten Beiersdorf, sales manager of Desma Tec, which makes machines for footwear and technical parts, said the first quarter was slower than expected but that he could not pinpoint the reasons for this. "There are so many reasons why people don't invest," he noted.
However, Saip has been getting interest from countries in North Africa, following the 'Arab Spring.' "The spring is turning into summer, you could say," Pozzi noted. For Cannon too, there has been interest from this region but Taverna noted that although customers are eager, they are not yet deciding to invest.
In the US, the market is "on fire right now," especially in automotive, according to Rick Hungerford, ceo of West Michigan firm Edge-Sweets Co. (ESCO). "Currently and in the future, we see strong growth there. I think it's probably one of the hottest markets," he said. "Year over year we're going to see 30 percent growth in 2012."
And in China, sales remained strong in 2011. Hennecke reported double-digit growth in the automotive market there. In September 2011, the German machinery company expanded in Shanghai, moving to a new 3500 m2 facility. Managing director Trippler expects the strong growth to continue in 2012, but said in the following years, this is likely to drop to single-digit growth. "The expectation for China was very high," Trippler said, but "even a growth rate of 8-9 percent is much more than Europe."
Cannon's Taverna agreed wholeheartedly with this sentiment: "If the growth rate is only 9 percent, we would kiss our elbows." China is "going to lose commodities and will want to replace it with specialities," he said, adding: "And we are the speciality people!"
Indeed, Chinese customers are starting to look for the same technical standards as their Western counterparts, and companies such as Saip focus on these customers. They are "very highly demanding," Pozzi said. KraussMaffei's Beyl agreed, saying: "The positive thing for us is that even Chinese companies are looking for high-quality equipment." KraussMaffei is seeing 10-12 percent growth in China.
Beyl noted that "of course there will be a limit to automotive production in China." Volume in China is not going to grow for ever, he said, and at the moment KraussMaffei is still picking up sales and that will probably slow in two years or so. "Then we will see a replacement business rather than one based on capacity increase."
Opportunities in automotive
Last year, KraussMaffei saw success with its resin transfer moulding (RTM) equipment. Beyl noted that there has been a "strong wave" of premium European OEMs investing in RTM equipment, led by BMW. RTM has not really been present in automotive Tier 1 so there is a lot of potential for investment, in Europe and "across the globe. We are getting the first orders from Asia and there is interest in NAFTA starting also."
Currently, RTM is mostly epoxy, but as this material is hazardous and difficult to work with, KraussMaffei is also developing a PU equivalent for RTM, Beyl said. "We see a good chance for PU to be a valuable alternative to epoxy," he agreed, but the key challenge for PU is to have a pretty low viscosity to get the resin into the fibre mat. "On the other hand, you still need short curing times and it is not that easy." There is a fine balance between the two properties.
As well as RTM, KraussMaffei's seating foam business is going well. In oval seating lines, there is currently "a very strong demand in particular in China," Beyl noted.
In automotive, Cannon noted that automotive cavity filling applications are on the rise and it has developed specialised metering and mixing equipment for this. A complete Cannon plant for cavity filling was delivered to Audi's Changchun, China plant, in 2011. It consisted of two Cannon CF2 dosing machines and four LN5 mixing heads, Cannon said in an April 2012 newsletter. Cannon expects to make a new system for another Audi plant in Foshan for this year, which will be used in the production of the Audi A3 model. The plant will have the latest LN4 mixing heads for injection in pouring holes as small as 6.5 mm, Taverna pointed out.
OMS expanding to meet demand
Italian manufacturer Impianti OMS also had positive news in 2011. Last year, order acquisitions totalled €40 million, double the company's usual amount. The company is investing €1.7 million in a new 1600 m2 factory, close to its old site in Verano Brianza, to complement its current 8000 m2 across three sites. "We needed more floor space because we are selling more and more big plants, turnkey plants, for sandwich panels both metal and flex-faced," commercial director Eraldo Greco said. OMS wants to be "more than just a supplier," offering not just a piece of equipment, but the complete line.
In China, OMS' second largest market, business was slow for the first couple of months but "after that we got a couple of good orders from the insulation market and were back to our standard," Greco told UTI, in 18 April interview at UTECH Europe. China makes up 25 percent of the company's business. Greco noted that the Chinese are switching from buying the complete line from OMS to ordering only the metering machine, "the most critical" part, and making the rest of the line themselves, copying the previous machine. "But this is a game and we have to play the game," he said.
Greco noted that in Europe there are countries that are suffering, mostly in the south of the continent, while Benelux and France are doing well. "Many companies are coming to France to produce PIR (polyisocyanurate) flex-faced board," he explained. But OMS' domestic market remains unstable. "Italy is always having problems with the government; it's never really very stable, but in terms of the economy Italians are hard to kill, especially in the North," he noted. In 2011, OMS sold two lines to Italian customers, but Greco doesn't expect any new investment in Italy in 2012.
OMS's strongest market in 2011 was the US with 40 percent of its business. "Last year, we got four big orders from the US: one is GAF [Georgia], and another is Atlas Roofing [Vancouver]," Greco said. "For both we supplied a complete line" for flex-faced high-speed lamination.
US market 'on fire'
For Grand Rapids, Michigan-based dispensing equipment and fabrication machine maker, ESCO, 2011 was a real return to form after a couple of difficult years. Rick Hungerford, ESCO ceo, said that "the US market is on fire right now," especially in the automotive sector. Some 85-90 percent of ESCO's business is in the US.
Hungerford also described the energy-management and pipe-insulation market as being "superhot" for the company. ESCO is selling equipment in North America, South Africa, Nigeria, and has sold six machines in the Caribbean. "These localised areas of production and investment just happen to pop up," he noted.
The ESCO executive noted that flexible foam markets were down a little for the company, although it was still receiving good orders from "big customers" that he declined to name.
ESCO has gone through a number of challenging years. In 2010, Hungerford's father, the ceo of the company, died, which caused a great deal of upheaval. Hungerford, who has worked for ESCO for 11 years in different capacities, has been at the helm for almost two years now and feels confident that he is steering the company back to growth.
ESCO makes highly-specialised, customised machines - 60 percent of the business is fabrication machines; the other 40 percent is dispensing equipment - and often focuses on "exotic machinery where not everybody can do it," Hungerford commented.
In 2011, ESCO streamlined the company and "cut out middle management," Hungerford said. He gets involved in the day-to-day operations of the company - installations, service work etc. "I've had that role before in the company and me being out in the field, turning wrenches, crawling underneath the machines, I learn more about [them] and what the customers like and don't like. It's one of our best learning tools."
Import tax issues in Brazil
South America is a strong, emerging area for many countries. However, machinery companies are finding themselves up against a 40-percent import tax in Brazil. "To overcome the problem, you should produce locally and open a subsidiary," noted Greco of OMS. "But there are also large costs, and we are not interested at the moment in [doing that in] South America." OMS has sold a couple of lines in Brazil in the last couple of years, noting that if it is "a matter of quality" then customers are more willing to pay the tax.
Gilberto Iorio, sales manager of Italian PU machinery maker Ekosystem, agreed that quality was the best way to penetrate the Brazilian market. Continuous line offerings in Brazil are poor, he said, and there is a strong demand for high-performance machines. Iorio, a former OMS executive in charge of India, set up Ekosystem Srl in 2002. It makes low- and high-pressure machines for the rigid, flexible and integral foam markets.
In 2011, Ekosystem saw an improvement in its business. Turnover was up by about 15-20 percent, Iorio said. The company's main focus, with 50 percent of its sales, is the GCC (Gulf Cooperation Council) region, where it has sold 50 machines since 2006. "United Arab Emirates is growing a lot," Iorio said. And in Saudi Arabia, Ekosystem has sold to sandwich panel maker BCMO.
In India, Ekosystem's second largest market (40 percent of sales), it has sold low-pressure machines for insulation, as well as flexible foam equipment to Suzuki. Automotive is a growing business for the company in India, whereas in the GCC, the auto market is non-existent. It is mainly rigid foam, 85 percent, but Iorio feels confident that both the automotive and rigid foam market will grow in the GCC.
Positive outlook for future
All the companies UTI spoke to were positive about the future. Flexibility for the future is important, Saip's Pozzi said. The company's approach is to have flexible equipment, able to handle any kind of new material. For 2012, Saip forecasts sales growth of 5-10 percent on its 2011 turnover of €13 million.
Despite the oscillations in the business, Trippler said that there is still room for growth in PU machinery. "In general, PU is a material which will replace other materials in the future," he noted. There may be applications for PU that "we do not know of today," but will discover in the future through development, he said.
"You always have to be active. As a machinery company, you have to think one two steps ahead, pick up ideas, bring PU to new markets," Trippler concluded.
Saip develops cedepa in Spain
In 2011, Saip and Dow Chemical Co. set up cedepa, a continuous panel testing centre in Spain. Saip is ”very satisfied” with its progress, Walter Pozzi, managing director, told UTI. Several projects are running at the moment and Pozzi expects to see the completion of some of these by the end of the year. Despite the economic issues in Spain, Pozzi noted that the centre is a global venture with customers coming from all over the world, such as Asia, South America and Africa. The centre allows customers to work on complete projects, with raw materials and machinery. Confidentiality is at the ”highest level,” Pozzi s