First Look: Industry News & Analysis 21817

Engel makes concerted packaging push

Injection molding manufacturer and automation supplier Engel (Schwertberg, Austria) ran packaging applications on two units of its recently expanded Speed line at Canada’s Plast-Ex in early May. In all, Engel had four machines running at its booth, including all-electric 200- and 310-tonne Speed lines, with those sizes debuting at NPE. Engel plans to launch a 500-tonne Speed at Germany’s K show this October. Speed was introduced to the market at K 2004 with a 150-tonne machine. The press was redesigned from the ground up in 2003 specifically for packaging, according to Joachim Kragl, manager of processing technology, and Jim Moran, VP of sales in North America. The machines offer all-electric or hybrid configurations, and Kragl claims they have the fastest dry-cycle time available and injection speeds of 1000-mm/sec.

During its three-day (April 17-19) “Packaging Days” event, held at its large injection molding machine manufacturing plant in St. Valentin, Austria, Engel ran what it claims is the fastest inmold labeling system on the market—demonstrated on a Speed 180/55 equipped with a toggle lever to reduce dry running times, and a fully automatic closed loop cooling-water control system for optimum mold temperature control.

Attendees also saw an Engel macPET (320/130/96) with a four-station take-off unit, running a 96-cavity mold from MHT for processing 18g preforms. Officials from moldmakers and auxiliary machinery manufacturers with major footprints in the PET preform molding industry told MPW that Engel is intent on making major inroads in the preform molding machinery market, to now largely dominated by Husky and Netstal.

In Brief

Klöckner changes hands

Global film giant Klöckner Pentaplast (Montabaur, Germany) has changed private-equity hands, with The Blackstone Group (London) purchasing the firm from Cinven (London) and JPMorganPartners LLC (New York) for ?1.3 billion ($1.8 billion). Klöckner, which operates 21 facilities in 11 countries with 3400 employees, had 2006 sales exceeding $1.2 billion ($1.6 billion).

Thailand investment

Finnish packaging processor Huhtamaki will invest ?17 million in a new facility near its existing facility in Bangkok to supply the local food and consumer goods industry with flexible film packaging and support a market that the firm says is growing at more than 10%/yr.

Russia profiles boom

Extruder producer Cincinnati Extrusion (Vienna, Austria) reports a record boom in appetite for PVC window profiles in Russia that resulted in a 260% hike in demand in the three years leading up to 2006. Company marketing director Hans Berlisg expects the growth to continue through 2010 followed by a five-year period of yearly growth of 10%.

Sekisui acquires Allen

Sekisui America Corp. (Mt. Laurel, NJ) has acquired Allen Extruders Inc. (Holland, MI), pairing it with its portfolio company Kleerdex Co. LLC (Bloomsburg, PA). Kleerdex is known for its Kydex thermoplastic sheet, while Allen, founded in 1970, markets its proprietary Alextra high-gloss durable sheet.

Tessy’s choice is medical

Custom molder/moldmaker Tessy Plastics (Eldbridge, NY) is accelerating its drive away from automotive, building a new 92,000-ft2 cleanroom facility in New York to accommodate the sector, which now makes up 40% of its business, up from 30%, while automotive has dropped to 2% of sales. “We’ve always done some medical,” Roland Beck, Tessy president, told MPW, “now we’ve elected to get out of automotive.”

The Class 100,000 facility—with selected portions set to Class 10,000—will have space for 100 machines, with a $10 million investment planned for the expansion and $6 million set aside for machinery. Beck says Tessy will purchase 20 machines a year for the next five years, focusing on all-electric presses ranging from 30 to 285 tons. The expansion will also require 100 staff, and is currently in the final design stages, with groundbreaking planned for July and operations starting in February 2008.

Tessy has an existing plant in New York, which employs 550 and runs 160 molding machines, as well as an operation in Lynchburg, VA that employs 250, with 40 molding machines, and a Shanghai site with 35 machines and 250 employees. After doubling sales over the last five years, Beck says Tessy decided to “bite the bullet” and expand at a level it can grow into over time, versus incremental expansions.

Berry rolls up Rollpak

Linking the firm’s products with those of the recently merged Covalence Specialty Materials Corp. unit, Berry Plastics Corp. (Evansville, IN) has purchased flexible film converter Rollpak Corp. (Goshen, IN). In a press release, Berry Chairman and CEO Ira Boots said Rollpak would complement Covalence’s institutional can-liner business and expand Berry’s customer base. According to e-mailed responses to questions, Rollpak cofounder Dale Weaver, who along with brother Gary was bought out on April 11, said the company’s annual revenues are in excess of $50 million.

Gary and Dale Weaver founded Rollpak in Goshen, IN in 1983, with Swedish partner Rullpack AB, whose 51% share of stock was bought out in 2002. At that time, Rollpak spun off all noncore products, and in 2004, the company committed to doubling its output in five years. According to Dale Weaver, halfway through that plan, Rollpak remains on track.

Rollpak operates a 127,000-ft2 facility with 93 employees in Goshen. Dale Weaver said that Berry has indicated there will be no immediate affect on the staff, and that Rollpak’s former VP of operations has assumed the role of Goshen plant manager for Berry.

Weaver told MPW that Rollpak has met the challenge of rising resin prices. “Perhaps even more daunting than resin-market volatility,” Weaver said, “was the combination of that and the growing presence of imported Asian finished goods flowing into the U.S. market.”

In March, Berry took over Covalence, which is made up of the former assets of Tyco International’s plastics and adhesives group.

Pactiv picks up Prairie

Pactiv Corp. (Lake Forest, IL) purchased Prairie Packaging Inc. for $1 billion, after tax benefits, paying a multiple of 7x the company’s estimated 2007 EBITDA (earnings before income taxes, depreciation, and amortization) of $116 million. Founded in 1987 by Earl Shapiro in Bedford Park, IL, Prairie grew to a $500 million business, selling injection molded, extruded, and thermoformed foam and impact dinnerware, cutlery, drink cups, straws, carryout packaging, salad containers, and portion cups. Prairie has five U.S. manufacturing sites and employs approximately 1200 people.

In a conference call with analysts announcing the deal, Pactiv Chairman and CEO Richard Wambold said Prairie’s custom cutlery filled a “sizable hole” in Pactiv’s portfolio, and the cups/cutlery sector represents a $3 billion market in North America that’s growing 5% annually. The 100% debt-financed deal is expected to close in the second quarter, and although the purchase price was high, Wambold told analysts there is value. “While not inexpensive, we believe it’s fair,” he said, adding that Pactiv expects significant returns on its investment of capital.

Pactiv’s leader was also high on the level of automation employed by Prairie in its cutlery business, which focuses on the market’s higher end, as well as the ability to leverage resin procurement, in spite of increased exposure to polystyrene, which has been quite volatile of late. “My argument is it makes us a stronger purchaser of polystyrene,” Wambold said. “It’s not a resin-diversification move, but it may in fact help with the volumes to buy a little bit smarter.” Prairie’s owners will not come over to Pactiv, but Wambold said key management would.

Hesta back in blowmolding game

Extrusion blowmolding machine manufacturer Hesta (Göppingen, Germany) is again manufacturing and intends to bring a new machine to this October’s K show. Graham Machinery Group (York, PA) acquired Hesta in 1999 but closed it in March 2006. Gerhard Gansler, who owns three other small machine manufacturing firms, acquired Hesta in late March 2006, rehiring some of the laid-off employees and acquiring patents, brand names, spare parts, and customer contacts.

Hesta has an installed base of about 3200 machines. In December 2006 the new firm delivered its first machine, and has since installed others across the globe, including one in March for blowmolding PVC medical parts in a cleanroom in Mexico run by Smith Medical Care.

News from Moldmaking Expo: Bales grows

Bales Mold Service Inc. (Downers Grove, IL) will be doubling the size of its Downers Grove facility from 14,000 to 28,000 ft2 to accommodate broadened capabilities and services, with the company considering new coatings for customers in new markets. Bales, with a second facility in Harlingen, TX, provides a wide variety of mold-surface finishing services.

News from Moldmaking Expo: Tri-Par Die and Mold Corp. consolidates

Tri-Par Die and Mold Corp. (Geneva, IL) announced the consolidation of its tooling and molding operations to its facility in Geneva. William Plocinski, president of Tri-Par, said that the custom molding side of the operations has grown significantly over the past few years, and having the tooling and molding divisions in separate locations meant a day lost when taking a mold for repairs. “This move will make us more efficient,” said Plocinski. The molding division currently has 15 presses ranging in size from 85 to 530 tons.

News from Moldmaking Expo: Catalina Tool & Mold changes ownership

While Renado Sasselli retains part ownership in Catalina Tool & Mold (Tucson, AZ), Scott Kelley has returned to his previous employer, this time as a partner and president/CEO. Kelley said Catalina would focus on high-production, quick-delivery tooling for major OEM customers.

Catalina also has six presses ranging from 40 to 300 tons for short-run production, preproduction pilot runs, and mold qualification, as well as quick delivery of prototype parts.

AquaFrost trials fully booked

While Brampton Engineering (Brampton, ON) occupied a booth at the recent Plast-Ex event (May1-3 in Toronto), its main display was 10 minutes up Airport Rd. at client Packall Packaging Inc. (Brampton, ON), which runs three Brampton blown-film lines, including the only downward-blown water-quenched AquaFrost system in North America. On this day, the line, which includes an annealing station with oscillating hauloff, was making a nine-layer nylon/EVOH barrier film.

Officially launched at K 2001, although the technology goes back to proprietary in-house installations in the late 1950s/early 1960s, Brampton has installed eight machines globally, including a 10-layer line in Finland. Due to the proximity to its headquarters and an understanding with the processor, Brampton uses the Packall line for customer trials, although opportunities to do so of late have been reduced with Packall increasingly using the line for its own clients, according to Brampton’s Peter Bicak, manager of research and development.

At one time, all of Packall’s thermoforming films were purchased—now the processor says the AquaFrost line lets it extrude its own and provides films that thermoform more uniformly. The system allows the use of cheaper nylon 6, while maintaining 3% haze, compared to 8%-10% in blown films, which also require more expensive nylons.

Bicak was a fixture at Packall in March in April, with the machine completely booked for potential customer trials. Bicak says the system cost is comparable to cast and more expensive than blown film, but with greater throughput.

Wittmann liking IML business

Less than one year after acquiring French moldmaker Regad (St. Claud) to provide turnkey inmold labeling (IML) systems, including tools and robotics, automation and auxiliary supplier Wittmann (Vienna, Austria) reports heady growth in the business, selling 10 complete packages. At the recent (May 1-3) Plast-Ex event in Toronto, General Manager Michael Wittmann said systems had been sold into Turkey and India recently, but IML growth in the North American market remains sluggish. “Europe is clearly the biggest [IML] market,” Wittmann said, “but the potential market [in North America] is huge.” (For an initial report on the Regad purchase, see MPW October 2006 First Look.)

In North America, round packaging, which is more suited for offset printing, dominates, with many of the larger players heavily invested in printing equipment, making a wholesale change to IML unlikely. Wittmann did say a push for packing efficiency on the box, pallet, and container level by huge retailers like Wal-Mart could force brandowners’ hands and precipitate a switch to rectangular packages.

In a release, Wittmann said it anticipates consolidated sales of $185 million in 2007, after achieving finalized 2006 gross revenue of $172 million.

Fusion garners dedicated facility

Hot runner manufacturer Mold-Masters (Georgetown, ON) continues to launch its automotive-focused Fusion line in various markets, debuting it in Canada at the recent Plast-Ex event in Toronto, with subsequent market launches planned in South America at Brasilplast, China at Chinaplas, and ultimately in Europe at Germany’s K show in October.

Demand for these since has been strong enough since market launch at last year’s NPE that Mold-Masters will dedicate its Spartanburg, SC operation to manufacturing the Fusion product, moving the component and hot-half manufacturing formerly done there to its Georgetown facility, which has completed a lean restructuring to absorb the work, says Mike Ellis, Mold-Masters marketing communications manager.

Billion bold in North America

French injection molding machinery maker, Billion SA (Bellignat), which concluded a management buyout from former owners mpm last year, made its show debut on the continent at the Plast-Ex event in early May. Six months ago, Billion announced it would begin direct sales into North America, procuring the services of Oaktree Consulting out of Detroit for sales representation, and Service Tech and Matcom for installations and machinery service.

According to Billion General Sales Manager Olivier Crave, Billion has already sold two cosmetic packaging lines in the U.S., with an initial annual goal of eight to 10 machine sales. Olivier said the company sells approximately 200 machines/yr, with the majority of its 13,000 machines in Europe and North Africa. Billion also plans to open a sales and service subsidiary in Offenburg, Germany by June.

At the Plast-Ex show, Billion displayed a 200-tonne high-speed all-electric multimaterial press molding a fork, knife, and plate at 5.4-second cycles from a family mold, using polypropylene and polystyrene in two different colors and three shot volumes.

Integral’s conductive compounds are charging ahead

Integral Technologies (Bellingham, WA) is shifting from research and development of its conductive polymer composite ElectriPlast to broader commercialization. Capacity is being increased, with one pelletizing line already in use and a second on order at its manufacturing partner Jasper Rubber Products Inc.

Last year, ElectriPlast achieved its first commercial application with an internal hearing-aid component for Knowles Electronics LLC, and it sold another license to British Esprit Solutions Ltd., which just visited the company and is investigating several aerospace applications.

When MPW spoke with Integral Chief Technology Officer and General Manager Thomas Aisenbrey, and Jasper President and CEO Doug Mathias, the pair had returned from a trip to Detroit, where they emphasized the material’s new focus on wire and cable products, with an ElectriPlast-based car-battery cable.

Potentially replacing heavier rubber-jacketed copper cables, the ElectriPlast cable, which suspends copper particles in a polymer matrix, is 80% lighter than its copper counterpart and has already completed life-cycle testing for one potential customer, enduring varying amperage loads and 24/7 operation for three months in an environmental chamber. The cables are non-corrosive, including their lugs, and maintain the conductive properties of copper.

Integral, using Jasper as its compounder, has created more than 15,000 recipes. Roughly 90% of Jasper’s sales come from compounded pellets, with the rest being generated by its own molding. Jasper is a licensed processor of ElectriPlast.

Waste got you down?

Convincing member firms, processors and, maybe most importantly, consumers and legislators that plastics waste is an opportunity and not simply a problem to be conveniently buried, will almost certainly prove a tough job, but Wilfried Hänsel, who moved from plastics supplier BASF to become the executive director of PlasticsEurope (Brussels, Belgium) this year, says polishing the image of the plastics industry is one of his group’s greatest missions. “We need to address public opinion,” he said in a recent interview with MPW, taking a break from the Identiplast plastics recycling/recovery conference. “People too often see the negative side of plastics.” PlasticsEurope represents Europe’s 60-plus plastics suppliers.

In Europe, about 47.5 million tonnes of plastics were consumed in 2005, of which some 22 million tonnes could soon thereafter be characterized as waste. Of this 22 million tonnes, about 53% ended up in landfills, with the remainder either recycled or, more likely, incinerated to generate energy. “We expect that in 2008, recovery will overtake landfilling,” he said, noting plastic waste recycled or incinerated has grown at10%/yr rates for years. “We want to create an environment that allows for all options for handling waste,” he said, alluding to incineration’s negative image in many EU member countries.

New CTO

Tim Womer was named chief technology officer for screw and barrel manufacturer Xaloy (New Castle, PA). He was formerly vice president of engineering. “Tim is shifting his focus from day-to-day operations to a future-oriented mission of building and strengthening our technology around the globe,” said Walter Cox, CEO.

Womer is active across the industry; he just completed his term as president of the Society of Plastics Engineers and serves on SPE’s Executive Committee as past president for the next two years.

[ On the record ]

“The quality of your [plastics] pipe system is remembered long after the price is forgotten.” David Walton, Marketing Manager Pipe, Borouge Pte Ltd, Singapore

“We are finding that China is adapting European and North American environmental standards for chemical plants and plastics operations, which means there is no cost advantage [over Europe or the U.S.] in these sectors.” Patrick Thomas, chairman of the board, Bayer MasterialScience (Leverkusen, Germany)

“Rising resin prices have brought added focus to the inherent value of scrap.” Mike Verner, regional product sales manager granulation, Conair (Pittsburgh, PA)

“We’re really not getting into contracts that have multiple years of productivity built in…. It’s still very tough—price downs are still there.” Lear Chairman and CEO Bob Rossiter