First Look: Industry News & Analysis 21871

Milacron plans for overseas expansion

North America’s largest manufacturer of plastics processing machinery will expand overseas. Bob Simpson, since last December president of the plastics machinery group within Milacron (Cincinnati, OH), showed journalists in Germany at a July pre-K how press event a slide detailing Milacron’s strength in North America (number one in sales of injection, blowmolding, extrusion—for twin-screw extruders—and moldmaking supplies) and Europe (#4 injection, #3 blowmolding, #2 moldmaking supplies) but clearly was cognizant of what the slide didn’t show.

“It’s extremely important we expand in Asia,” he said, and added that by year’s end the firm will announce what he billed as major injection molding machinery manufacturing news with regards to Milacron in Asia.

Milacron already makes injection molding machinery in India and claims to be market leader there, though the firm wouldn’t share exact production/ sales figures from its facility. Milacron manufactures injection molding, blowmolding and profile/pipe extrusion machinery.

In another overseas expansion move, Milacron will house a wood-plastics composite profile extrusion line at its Magenta, Italy facility. Milacron’s re-entry into the international extruder business has been a strong success, said Simpson, with greater than 40% of sales this year expected from outside the U.S., after 31% of sales were realized outside the U.S. in 2006. He said he “would not be surprised” if Milacron doesn’t soon have an extruder manufacturing footprint in Europe. Extruders account for about 10% of Milacron’s $706 million in plastics machinery sales; injection molding for about 50%, blowmolding for some 15%, and the D-M-E moldmaking supplies business for about 25%.

Special sections in MPW’s September and October issues will bring readers all the news on developments to debut at the K—from Milacron and many, many more.

In Brief

CCC acquires Mesa

Consolidated Container Co. (CCC; Atlanta) raised its North American blowmolding presence to 70 locations with the acquisition of Mesa Industries Inc. and its nine sites: three in NC, two in FL, and one each in VA, IL, TX and PA.

Mauer comes to U.S.

Packaging processor Mauer (Ubstadt, Germany) will build its first North American facility in Boone County, KY, to injection mold caps and closures for plastic tubes.

TricorBraun buys Ryco

TricorBraun (St. Louis) acquired Ryco Packaging (Omaha, NE) for an undisclosed amount. Ryco, a distributor of rigid packaging, has $140 million in annual revenues. Since 2005, TricorBraun has acquired Cal-West Tool & Mold and Weber & Jones Packaging Inc.

Gulf group ups PE

Jeddah, Saudi Arabia-based conglomerate Gulf Investment Group is increasing capacity of polyethylene (PE) stretch film, marketed under the brand 3-P Stretch, to a total annual output of 150,000 tonnes. The company has started exporting to Asia and Europe.

Bigger NA presence

Absolute Haitian (Worcester, MA), with rights to exclusive sales and service of Haitian (Ningbo, China) injection molding machines in the U.S. and Canada, has rapidly expanded its sales presence in North America, most recently naming Mercer Process Equipment Inc. (Houston, TX; photo below) as sales representatives for the Southwest U.S.

[ On the record ]

“My new business plan is to figure out how to manufacture plastics technicians. If I could, there would be a great profit margin, because they’re very hard to find.” Troy Nix, executive director of Mid America Plastics Partners (MAPP), on the skilled-labor shortage.

“In the world of plastics recycling, we constantly run into the issue of critical mass. If the plastic doesn’t achieve critical mass, it can’t get recycled.” David Cornell, technical director at Assn. of Post Consumer Plastic Recyclers, who says ‘critical mass’ is at least 200-300 million lb/yr.

“Always be ready to commit to innovation.” Robert Cervenka, founder and CEO of Phillips Plastics Corp., in remarks at ANTEC 2007.

“Do not overestimate the cost savings realized when you remove complexity from the system.” John Feldmann, director of BASF’s plastics, oil and gas business unit.

Benzene gone bananas puts styrenics in play

You need a scorecard to keep up with changing ownership among suppliers of styrenics as they close plants, merge, and take steps large and larger to strengthen their positions, or exit them, in what has become a bitterly contested, low-margin market. “Benzene pricing has decoupled from oil pricing,” is how John Feldmann, director of the plastics business unit at supplier BASF, explained why the lack of benzene supply has driven prices beyond that which would be expected for this petroleum-based, styrene precursor.

Earlier this year Nova and Ineos merged their North American styrenics operations into NOVA Innovene, the joint venture already formed combining the firms’ European styrenics businesses. Now, supplier Lanxess (Leverkusen, Germany) is exiting the acrylonitrile butadiene styrene (ABS) business, moving its Lustran Polymers ABS business unit into a joint venture with chemicals and plastics supplier Ineos (Lyndhurst, England). Lanxess will hold a 49% minority share of the JV for two years, then exit, leaving Ineos as sole owner. Ineos, which trails only Dow and BASF as the third-largest chemicals supplier, is backwards integrated into benzene.

Then, on July 17, plastics supplier BASF (Ludwigshafen, Germany) announced it is evaluating strategic options for its ?3.2 billion/yr styrenics business and already had received an initial offer for parts of it. BASF activities under consideration include its styrene monomer (SM), polystyrene (PS), styrene butadiene copolymer (SBC), and ABS businesses with plants in Belgium, Mexico, Brazil, South Korea, and India.

DPG ceases, and Engel trims, North American manufacturing

In late June Demag Plastics Group (DPG; Schwaig, Germany) announced it would cease manufacturing its injection molding machines in North America, while keeping about 75 employees at its Strongsville, OH facility for sales/service. The company has 11,000 installed machines in North America. DPG will now build machines in Schwaig and Wiehe, Germany for high-end applications, with lower-cost hydraulic and all-electric lines manufactured in Ningbo, China and Chennai, India.

In a July 11 teleconference, Klaus Erkes, CEO of DPG, said the firm has cut its range since 2005 from 20 different machinery lines to 13, and by the end of 2008 it will have three. Casualties along the way could include the large two-platen Titan line, formerly made in Strongsville. Erkes was noncommittal on the Titan going forward, saying production could shift to somewhere in Asia; he did say DPG’s North American executive team will be retained.

Erkes said DPG’s future will revolve around the Systec hydraulic toggle line; its El-Exis high-performance hybrid; and the all-electric IntElect, which will be made at the company’s new Ningbo, China facility from where, DPG hopes, it can be exported to the U.S. and compete on a cost and performance basis with the all-electrics from Japan that currently make up half the market.

In related news, Austrian competitor Engel (Schwertberg), with North American manufacturing in Guelph, ON and York, PA, announced plans to streamline its North American manufacturing, including a staff reduction in Guelph, and capital investments of $4 million over the next three years. Engel saw 2006 turnover grow 15% to $805 million.

The local newspaper, Guelph Mercury, reported 29 employees were laid off at the Guelph plant in mid-July, and another seven there took retirement packages, with similar cuts expected in September, trimming employment there to about 250. Engel will start manufacture of its all-electric and packaging machinery ranges in North America, as it sees increasing demand for these even as sales of large machines for automotive applications falter.

PET supplier enters processing business

The leading European supplier of PET, Spanish firm La Seda de Barcelona, acquired the European PET bottle blowmolding and preform molding operations of Australian packaging group Amcor Ltd. for ?425 million.

La Seda reports it paid seven times EBITDA for the Amcor facilities, which include processing sites in Germany, France, Belgium, the UK, Spain, and Morocco, as well as a PET recycling plant in France.

Amcor last year sold its White Cap closure processing business in Europe to Silgan. Amcor has drastically decreased its presence in Western Europe but says it will use funds from the sales to help increase its presence in Eastern Europe.

Consolidations expected for PET

Despite 7.7%/yr global demand growth, the virgin polyethylene terephthalate (PET) market remains a difficult one, which is why Andrew Noone, managing director of PCI (PET Packaging Resin & Recycling; Derby, England), speaking at the recent PET Symposium organized by processing equipment maker Rieter Automatik (Grossostheim, Germany), believes the sector is in for more consolidation. He says in Asia alone there are 41 PET suppliers, most too small to compete with growing Middle Eastern PET output.

Noone says that by 2011 suppliers in the Middle East hope to have 1.5 million tonnes of PET capacity in place, with plans to serve markets in both Asia/Pacific as well as Europe. According to PCI figures, total PET consumption globally was 13.2 million tonnes in 2006.

Extrusion machinery news in brief:

• Polyrema, a member of the Reifenhäuser group of companies (Troisdorf, Germany), is delivering 15 blown-film lines to the HIPF (Higher Institute for Plastic Fabrication) in Riyadh, Saudi Arabia (more on HIPF: May 2007 MPW, p. 12) this year. The lines, designed for training purposes, include side gusseting, a pre-treating unit with segment electrodes, and a one-color flexographic printing press. A winder for the center is provided with web tension and winding tension control as well as automatic reel change for rolls up to 800 mm in diameter.

• Processing equipment maker Luigi Bandera SpA (Busto Arsizio, Italy) recently hosted an open house where it featured two sheet extrusion lines that can process PET, polypropylene, polystyrene, and polylactic acid resin. One of the lines has been sold to a Polish processor involved in producing thick web for food packaging. Energy consumption for these two lines is said to be about 40% lower than on traditional extrusion equipment.

• Brückner Technology Holding GmbH, the management holding company of Brückner Group (Siegsdorf, Germany), named Edgar Gandelheidt as chairman of the board of management of Brückner Formtec GmbH. He is already CEO of blown-film line and film winders manufacturer Kiefel Extrusion GmbH (Worms, also Germany), which Brückner acquired in January 2007 (February 2007 MPW, p. 10).

Brückner Formtec manufactures cast film and sheet extrusion lines, focusing on the clarified PP and PET markets; appointing Gandelheidt as chairman is designed to help Brückner Group make optimum use of the synergy potential between blown film and cast film. Brückner claims world leadership in sales of film stretching equipment.

• At Kiefel Inc. (Wrentham, MA) in the U.S., Jim Ciolino joined from competitor W&H (Lincoln, RI) to serve as president there. Ciolino was with W&H for nine years, most recently as sales manager of extrusion systems; at Kiefel he replaces Bob Hawkins, who spent three years as Kiefel president in North America before stepping down this spring. Steve DeSpain, who joined Kiefel in 2006 from Davis-Standard’s blown-film unit, is now VP sales and marketing for Kiefel.

Husky adds more arrows to quiver

Injection molding machine, mold, and hot runner supplier Husky Injection Molding Systems (Bolton, ON) acquired substantially all of the assets of Moldflow Corp.’s (Framingham, MA) Manufacturing Solutions Division for $7 million. With this acquisition, Husky can offer customers Altanium temperature controllers, Celltrack and Shotscope software products, as well as Moldflow Plastics Expert (MPX), an automated process set-up and optimization tool.

In January 2004, Moldflow acquired the line of Altanium temperature controllers by purchasing its creator, American MSI.

In related news, Husky is working with multilayer technology provider Kortec (Ipswich, MA) to build its HyPET preform systems so these can be upgraded more easily to multilayer preform processing, with Kortec supplying the co-injection hot runner, integration into the machine, and process development and optimization support.

A “Kortec-ready” HyPET machine would include a special stationary platen and machine base, as well as upgrades to the electrical and hydraulic systems, machine-control modifications, and other unspecified differences. These variations reportedly facilitate a quick-and-easy HyPET system field upgrade to a multilayer preform line, according to Kortec and Husky.

RJG assisting French molders

RJG Inc. (Traverse City, MI), a supplier of process control systems, cavity pressure sensing technology, and processing training for injection molders, has officially opened its new regional office in France, located Oyonnax, called the country’s ’Plastics Valley’ due to the high concentration of industry firms headquartered there. Denis Fecci has been hired as technical sales manager and is training to conduct RJG’s courses in France. The anticipated timeframe for training to begin in France is the first quarter of 2008.

KraussMaffei CEO touts global stance

During its pre-K show press conference, Dietmar Straub, CEO since April 1 at plastics processing machinery manufacturer KraussMaffei (Munich, Germany), said 2005/2006 total sales were €706 million. The business, which has grown its sales by 72% since 2001, has reached a size where he feels “very comfortable with our ability to participate as a global supplier.” The firm has an installed base of about 30,000 machines.

That €706 million does not include Demag Plastics Group, a former sister firm since split-off, nor does it include Netstal, which ostensibly falls under KM, but in fact continues to run as an entirely separate business, said Straub. KM, Demag, and Netstal all are owned by Madison Capital.

In the first six months of this fiscal year, which runs October-September, KM had 9% sales growth and 8.5% orders growth, with no further figures given. In the past KM has broken out its sales by business unit but Straub says this will no longer be done.

The firm will display 20 machines at its K show stand, among them a revamped version of the firm’s established injection molding compounder (IMC) that also integrates polyurethane processing into the manufacturing cell. You can read more about this and other K 2007 equipment and materials news in our comprehensive pre-K reports in the September and October editions of MPW.

Nypro plans $25 million investment

Custom manufacturing powerhouse Nypro (Clinton, MA) is engaged in a five-year, $25 million investment in its Clinton, MA headquarters. Al Cotton, company spokesman, told MPW at Plastec East (June 12-14; New York City) that Nypro will add two new cleanrooms—both Class 8 (old 100,000); engineering capabilities, including people and software; and 40 injection molding machines, mostly all-electric, ranging in size from 200 to 500 tons. In 2006, Nypro eclipsed $1 billion in sales, becoming the first injection molder to do so according to Cotton, and it’s on pace for $1.2 billion in 2007 sales.

Late last year, Nypro announced that it was closing its Hazard, KY and El Paso, TX sites (see MPW First Look October 2006 for initial report), moving the work to Louisville, KY; Atlanta, GA; and Juarez, Mexico. Cotton says the Juarez site will be fully operational by the end of 2007, as will the new Burlington, NC site, which will be split 50:50 between healthcare and packaging.

Hexion tops Basell for Huntsman; Basell buys Lyondell

Apollo Management LP appears set, pending regulatory and shareholder approval, to acquire chemicals supplier Huntsman, topping a bid made by Access Industries Holdings LLC. Access owns polyolefins supplier Basell, and was among the firms pursuing GE Plastics, acquired in May by Sabic.

But Basell, the largest producer of polypropylene and a leading supplier of polyethylene, announced July 17 that it would acquire Lyondell Chemical Co. (Houston, TX) for approximately $19 billion, including the assumption of debt. Basell reckons that Lyondell’s three business segments—ethylene, co-products and derivatives; propylene oxide and related products; and refining—will complement and strengthen Basell’s polyolefins business. Basell and Lyondell together would have posted combined 2006 revenues of approximately $34 billion with 15,000 employees around the world. The transaction is subject to regulatory approvals and the approval of Lyondell shareholders but is expected to close within the next months.

On the plastics side, Apollo will combine Huntsman, the world''s largest supplier of epoxy adhesives, with its Hexion Specialty Chemicals Inc. (Columbus, OH) division, the world’s largest supplier of thermoset plastics. Huntsman also is a leading supplier of polyurethane precursor MDI as well as a wide range of chemicals.

Hexion took shape in June 2005 through the merger of Borden Chemicals, Resolution Performance Products, and Resolution Specialty Materials.

More than 1000 make it to Netstal for 150

Netstal’s management team—Reto Morger, marketing manager; Waldemar Schmitke, GM PET systems; CEO Bernhard Merki; Thomas Robers, director of sales; and Robert Weinmann, technology director—stand before an Evos hybrid electric/hydraulic machine debuted by the firm during its open house. More than 1000 guests attended the mid-June open house and conference program organized by the Swiss injection molding machine manufacturer as the firm celebrated its 150th year in existence. Netstal (Näfels) will in the next years gradually transition its entire machine range to hybrid hydraulic/electric or all-electric machines. Read more in our pre-K reports in September and October.