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July 1, 2008

15 Min Read
Industry News & Analysis

Cleanroom boom for GW, Tessy, Nypro, Hi-Tech, and Integrity

Cleanrooms are the currency of the realm in medical molding, and many molders that currently sell into, or would like to serve the medical market, are adding or expanding such operations in their plants. At the recently completed Medical Design & Manufacturing East event in June in NYC, GW Plastics (Bethel, VT) told MPW that it is currently building a new Class 8 cleanroom at its facility in Tucson, AZ, with the room to hold 10-12 presses. Medical has grown from about 50% of sales five years ago to about 66% of GW’s sales of almost $100 million/yr.

Also, like GW, moving more work from automotive to medical is custom molder Tessy Plastics (Elbridge, NY), which is doubling the size of its two cleanrooms and purchased 10 injection molding machines, with 10 more likely to be added by the end of this year. Roland Beck, Tessy president, told MPW that the company will expand its cleanrooms, from 10,000 to 20,000 ft2 and 5000 to 10,000 ft2, with 10 new machines, Sumitomo’s and Niigata’s, already in place. The company has lowered its exposure to the automotive market from 30% of sales to 1%, with medical now constituting 50% of its business. “[Medical] is very demanding, but those customers are willing to pay for what they ask for,” Beck said. “The customers we have are ones that are open to dealing with us on price increases,” Beck added, contrasting that to automotive customers who rebuffed attempts to change terms as resin prices climbed.

Contract manufacturer Nypro (Clinton, MA), which runs more than 1400 molding machines in 17 countries, is also tasking more and more of those presses with molding work within cleanrooms. At the same event, Al Cotton, Nypro’s director of corporate communications, said the company is adding new cleanrooms at plants in Tijuana and Massachusetts, with those cleanrooms built to Class 8 standards and housing new machines and robots, with production dedicated to medical.

Hi-Tech Tool and Mold’s (Pittsfield, MA) Ann Fyfe said the company is planning to expand its Class 100,000 cleanroom from 4500 to 7500 ft2. Last year, the company announced a 20,000 ft2 addition to its operation, including the cleanroom and an expansion of secondary operations. Custom molder Integrity Plastics (Denver, PA) announced that it had just certified its cleanroom, which was added in 2006. The company, which has 36 molding machines, runs four Engel’s (two 60- and two 150-tons) in the newly designated Class 100,000 cleanroom, according to Chuck Schneider, in charge of new business development.

Changes in Italian injection molding market take form

Italy’s injection molding machinery industry has gone through a number of significant changes recently. In March HT Italy (Cazzago), an independent company that has serviced, sold and modified machines imported for the Italian market by Chinese machine maker Haitian (Ningbo), acquired the assets of defunct competitor Mir (Brescia, Italy) for €9.6 million and announced it will make and market its own line of machines.

Haitian Europe (also Cazzago), the parent firm’s European subsidiary, responded then said it would take over sales in Italy from HT Italy effective June 30, 2008.

Haitian Europe also says it is expanding its sales and service network in Europe.

Also, Industrias Romi, Brazil’s leading manufacturer of machine tools, injection molding machines and blowmolding machinery, announced it would acquire Sandretto, the Italian injection machine manufacturer. Sandretto has two factories near Turin, Italy, and about 295 employees.

Romi offered €5.5 million (about $8.7 million) and to take on the firm’s employees and inject some €8 million into Sandretto over the next two years. Romi’s shareholders, however, in a June 4 meeting, took exception to the demands of Sandretto’s employees union, leaving Sandretto’s future again in question, though renegotiations make it likely a second extraordinary shareholder meeting on June 30 (after deadline) will approve the purchase.

Sandretto entered administration in 2006 and was being run by the Italian government, which had been trying to sell the firm but had until recently been disappointed in the bids it received.

Linking petrochemicals to plastics to finished goods

The Middle East’s efforts to build new industries around its hydrocarbon resources have to date largely focused on chemical and plastics supply operations which are focused on converting oil to those products, but for the export market. However, local governments increasingly are interested in keeping those pellets in country and converting them into products headed for export and for products to meet the growing domestic demand. One of the first results will be the new ‘Polymers Park’ in Abu Dhabi, which will include room for up to 60 plastics processors, a technical center, and a 350,000-sq-m business park. Construction on the site will be completed by the end of the year, with operations commencing in the first quarter of 2009. The photo shows Mohammad Bin Zayed Al Nahyan, crown prince of Abu Dhabi, being shown the model of the new Polymers Park by Abdullah Al Darmaki, VP petrochemicals at Abu Dhabi Basic Industries Corp.

THERMOSET PLASTICS

BMCI acquired by Citadel Plastics Holdings

Citadel Plastics Holdings Inc. (Citadel) has acquired Bulk Molding Compounds Inc. (BMCI; West Chicago, IL), the largest supplier of custom formulated bulk molding compounds.

More than 1000 attended the Competence Days open house organized by Wittmann Battenfeld, the first event organized by the former Battenfeld Injection Molding since it was acquired earlier this year by robot and auxiliary equipment manufacturer Wittmann (Vienna, also Austria).

Citadel is a portfolio company of Chicago-based private equity investment firm Wind Point Partners. Citadel intends to build a global plastics compounding company. BMCI joins the first company in the Citadel portfolio, thermoplastics compounder The Matrixx Group (Evansville, IN). Citadel is led by Mike Fitzpatrick, its chairman and CEO and a 30-year veteran of specialty chemicals supplier Rohm and Haas Company.

BMCI owner Larry Nunnery will retain his position as CEO of BMCI through 2008. Nunnery bought BMCI in 1989 and grew the company from a $7 million/yr, single-plant business to its current $130 million/yr, seven-site portfolio. BMCI has production at two sites each in the U.S. and Mexico and one each in China, Germany and Brazil.

AUXILIARIES

IPEG consolidates Conair, Rapid plants

Plastics auxiliary supplier Conair (Franklin, PA) and size-reduction specialist Rapid Granulator (Bredaryd, Sweden) will consolidate North American and European manufacturing efforts. Chris Keller, president of the companies’ parent firm, International Plastics Equipment Group (IPEG; Cranberry Township, PA), described the decision in a conference call as a continuation of what began last year in China and “the next move in IPEG’s corporate strategy.”

Rapid will wind down its presence in Rockford, IL, offering some but not all of the 30 staff there the opportunity to move to Cranberry Township, PA, which will transition from only production of Conair equipment to an IPEG manufacturing site, assembling and manufacturing Conair, Rapid, and also Moditec low-speed size-reduction products. In Europe, Rapid’s Bredaryd, Sweden site will also become an IPEG facility, adding a Conair presence, although it will not initially include the manufacturing and assembly of Conair products there. “We leave open the possibility of adding Conair manufacturing to Sweden,” Keller said. Keller stressed that IPEG will keep the sales, marketing, engineering, and aftermarket support of the brands separate, in spite of the shared manufacturing space.

RECYCLING

Erema hits milestone and sees opportunity ahead

Plastics recycling machinery manufacturer Erema (Ansfelden, Austria) saw its turnover hit a company record for the 2007/2008 fiscal year, ended March 31, with consolidated turnover reaching €102.4 million, more than 15% growth compared to FY06/07. This is the fourth record year in succession for Erema’s financials. The company was founded in 1983.

Erema manufactured 290 complete recycling systems in the most recent FY with about 50% of these going to customers outside the EU. Gerhard Wendelin, managing partner and CEO at Erema, says the firm expects another good year as interest in plastics recycling increases with every step change in raw materials’ pricing.

FILM EXTRUSION

Global news update

MPW’s editors travel frequently, and recently we spoke with:

• Fabio Cazzani, managing director of extrusion manufacturer Omipa (Morazzone, Italy), who reports that last year’s K plastics show in Düsseldorf, Germany was a success despite fewer than expected visitors, with the company’s order books presently full. However, he is concerned that with the price of steel still high and the difficult economic situation posed to Europe’s manufacturers, competing with a weak U.S. dollar, could create difficulties for European machinery makers.

• Blown- and cast-film equipment maker Macchi (Venegono Inf., Italy) reports a 5% growth trend from its customers for flexible packaging film processing equipment. Film lines to produce stretch hoods are also seeing strong demand, particularly among new start-up companies in Eastern Europe, where packagers are looking for alternatives to strapping and shrink film. In the last six months, Macchi sold three 7-layer blown film lines and four 5-layer lines to customers who are upgrading production from 3-layer film to more value-added applications.

• Burkhard Lahrmann, sales director of processor RKW’s Nordhorn, Germany business, who says demand for stretch hoods, as alternatives to strapping, heat shrink film and hoods, as well as stretch wrap, is seeing a 20% annual increase in Europe. “Each year more and more stretch hood production systems are being installed around the world,” Lahrmann said. This has driven the Frankenthal, Germany-based RKW-Group, a large European film processor, to add a blown film line to its facilities this spring to expand stretch hood film production.

FILM EXTRUSION UPDATE, TAKE 2

Luciano Mendes Ribeiro of Neoform stands near the firm’s new Davis-Standard PET sheet system.

• Featuring a main extruder measuring 8 inches (203 mm) in diameter, Gloucester Engineering Co. Inc. (Gloucester, MA) delivered what it calls the “largest blown-film line in history” in terms of film width to a Chilean maker of geomembranes. Polytex SA will install the line in Lima, Peru, making it the company’s third Gloucester machine. The die’s diameter measures 86 inches (218 cm), and the winder has a width of 365 inches (927 cm). Gloucester’s German Laverde told MPW that the company couldn’t reveal the cost of the line, which eclipsed a slightly narrower system it delivered for geomembrane production, also in Chile.

• Brückner Formtec (Siegsdorf, Germany) has received its largest order ever, a request for six twin-screw sheet-line extruders, from a Chinese manufacturer of A-PET (amorphous polyethylene terephthalate) sheet. The unidentified processor will boost its production capacity by two thirds with the new machines, lifting it to 100,000 tons/yr and making it a market leader, according to Brückner.

• Davis-Standard (D-S; Pawcatuck, CT) has installed a polyethylene terephthalate (PET) sheet system at Brazilian food packaging manufacturer Neoform S.A. (Rio Grande do Sul). D-S’s Al Chrisbacher told MPW the line was designed to produce decorative laminate products from PET bottle flake materials with throughputs up to 1100 kg/hr for sheet .15- to 1.5-mm thick and 1450 mm wide. It is the largest PET sheet line D-S has installed in Brail.

Germany’s machine makers recall 2007 very fondly; 2008 more challenging

Jan-Udo Kreyenborg: Germany’s plastics machinery makers had a great 2007.

Jan-Udo Kreyenborg, chairmen of the plastics and rubber machinery manufacturing group with Germany’s VDMA trade association, and also of the auxiliary equipment manufacturing company that bears his last name, said orders in 2007 for Germany’s machine makers increased 21% over those in 2006, with manufacturers as a group reporting their factories ran at 96% of capacity. Total sales last year crossed the euro 5 billion mark for the first time, hitting euro 5.24 billion, giving Germany’s machine manufacturing industry about a 24.9% share of the total world market. China (15.2%), Italy (12.8%), the U.S.A. (7.9%) and Japan (7.2%) round out the top five countries for manufacturing of plastics and rubber processing machinery, based on total machine value. The figures account only for machines made in the country and not for those made at foreign subsidiaries. “The year was wonderful,” stated, or maybe understated, Thorsten Kuehmann, managing director of the group, noting the success came in spite of the drop in the value of the U.S. dollar compared to the European common currency, the euro.

Though 2008 is proving tougher, the group predicts gross sales for the country’s manufacturers will grow by about 8%.

Machinery market in U.S. remains in flux

The dollar value of plastics machinery shipped in the U.S. in the first quarter of 2008 expanded on a year-over-year and quarterly basis, growing 4% from the first three months of 2007 to $227 million. According to the Society of the Plastics Industry (SPI; Washington, DC) Committee on Equipment Statistics report, compared to the fourth quarter of 2007, the dollar value of shipments was up 8%, with the strongest growth seen in blowmolding equipment, with the dollar value of machines delivered in the first quarter up 66% from the first quarter 2007 on the basis of 25 units delivered.

The number of injection molding machines shipped in the first quarter was down 4% year over year and off 11% compared to the last quarter of 2007. Extrusion units were down 14% in terms of units compared to the first quarter of 2007, but the number was up 3% compared to the final quarter of last year. In auxiliary equipment, sales were unchanged compared to a year ago and up 3% over the final three months of 2007.

LME looks to increase financing participation in plastics futures

The London Metals Exchange (LME) announced a series of changes to its futures contracts for polypropylene (PP) and linear low-density polyethylene (LLDPE). In the biggest change and to encourage financial players to finance the exchange’s plastics inventory, the LME eliminated the concept of a discounting structure, whereby resin’s value would be altered depending on how long it had been warehoused. “Originally, the feeling was that plastics was more akin to a soft commodity than a hard commodity and subject to deterioration,” explained Martin Abbott, LME’s chief executive, who said during a teleconference that the exchange completed an independent study that determined the materials do not break down if properly stored. “[Discounting] killed the ability to bankers and financiers to get involved.”

Originally launched in May 2005, the LME futures contracts have undergone several changes since then. “I’m hoping these are the last major changes, but I’m also not going to apologize for making them,” Abbott said. “There will always be some evolution in the contract.”

GREENING OF AN INDUSTRY

Biograde gets the call for the Games

Australia’s Biograde Ltd. (Melbourne) has won an exclusive contract to supply the Beijing 2008 Olympic and Paralympic Games with biodegradable packaging. The (U.S.) $1.2M contract was awarded by the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) and will involve the supply of seven different biodegradable plastic bag formats. Biograde’s processing facility is in Nanjing, China.

EXTRUSION

AMS to add New England presence

Extrusion system manufacturer Automated Manufacturing Systems (AMS; West Palm Beach, FL) has purchased land in Barrington, NH on which it plans to build a new operation, including a full lab. Founded in 1993 and initially focused on rebuilding and repairing extrusion equipment, AMS has since expanded into the production of turnkey systems, including extruders, cutters, pullers, winders, and more. Richard Bell, owner and founder of the company, who has previous experience with Davis-Standard as well as medical-device manufacturing, told MPW that AMS will set up a full lab in the new building once it is completed, adding processing lines and equipment, including a CNC machine, to support its 20-plus standard machine lines.

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