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Short Shots: From the industry floor 20822

December 1, 2007

13 Min Read
Short Shots: From the industry floor

Equity investor set to buy Husky

A joint news release issued on Sept. 28 by Husky Injection Molding Systems Ltd. and Onex Corp. said that Toronto-based Onex, a private equity investment firm, will acquire Husky in a transaction valued at approximately $960 million. (All figures are Canadian dollars, which are worth about US$1.02.)

For its fiscal year ending July 31, 2007, Husky reported sales of $1.077 billion, up from $935 million in the previous year. Net income for FY 2007 was $42 million, up from $26 million in the previous fiscal year. Husky supplies injection molding machines, molds, and hot runners to the packaging, technical, and automotive sectors in more than 100 countries from manufacturing sites in Canada, China, Luxembourg, and the United States.

The sale price of $8.18 per share is a 38.6% premium over Husky’s closing share price on the Toronto Stock Exchange on March 7, 2007, the last trading day before Husky announced it was beginning the strategic review process leading to a sale.

The sale is subject to court, shareholder, and standard regulatory approvals. Husky is expected to hold a shareholder meeting on or around Dec. 6, 2007 and, if the sale is approved, to complete the transaction by mid-December 2007. Husky’s board of directors has recommended unanimously that shareholders accept the offer. Husky’s founder, chairman of the board, and controlling shareholder Robert Schad and his wife Elizabeth have agreed to vote the almost 48 million shares they own in favor of the agreement, plus nearly 4 million shares that they control. Their combined shares total about 44% of the Husky shares outstanding.

MICRO SHOTS

Risdon acquires Chinese molder
Cosmetics packaging firm Risdon International (www.risdon.com) has acquired molder Inmagine Plastics of Taicang City, China. Inmagine will be renamed Risdon International China Ltd. and in its new 10,000m² facility—the eighth manufacturing plant for Risdon—will perform injection molding, assembly, hot stamping, and silk screening.—AC

Engel opens new Warsaw sales, service center
Engel Poland (www.engel.info) has added a new sales and service center in Warsaw to reinforce its network of these facilities in Eastern Europe. The center will provide project planning, consulting on application technology, and service. Engel reports that it holds 33% market share in this region. (Photo at immnet.com.)—AC

Lilly awards Nypro
Eli Lilly & Co. (Indianapolis, IN; www.lilly.com) has been working with Nypro (www.nypro.com) for more than 10 years, and this year the pharmaceutical company presented the contract manufacturer with one of its Global Supplier Awards “for exceptional performance in quality, speed, service, and cost reduction.” Nypro Inc. employs 17,000 at 50 operations worldwide and had FY2007 sales of $1.2 billion.—AC

Three cheers for actor’s focus on U.S. manufacturing

Often a celebrity throws the spotlight on causes that many citizens have labored at for years in anonymity. In the case of Manufacturing in America vs. Overseas Outsourcing, John Ratzenberger has been lending his influence to help bring this issue to the general public through a series called “Made In America,” which airs on the Travel Channel (for air times, go to travel.discovery.com and search for “ratzenberger.”).

Usually best remembered for his role as know-it-all mail carrier Cliff Clavin on the long-running TV series “Cheers,” Ratzenberger has a long list of movie and TV credits and is the voice of at least one character in every Pixar animated film.

Ratzenberger’s Made in America series visits factories through the U.S. that include Rubbermaid, Schutt (football helmets), KitchenAid, Toro (snowblowers), Panoz Auto Plant (sports cars), and Pelican (cases), as well as those in other industries such as Martinelli’s (sparkling cider) and Wigwam (socks).

To further support the effort, he has teamed with the Alliance for American Manufacturing in a seven-city tour of “Keep it Made in America” town hall meetings. The first was in Manchester, NH on Sept. 25, with more scheduled in Des Moines, IA; Columbus, OH; Pittsburgh, PA; Buffalo, NY; Chicago, IL; and South Carolina. To find out more, visit www.americanmanufacturing.org.—AC

Frank Pellegrino of SSI at the company’s Shanghai facility.

Outsourcing? It’s all in the approach

Even amid toy recalls, Frank Pellegrino, VP plastics for Smart Sourcing Inc. (SSI—Farmingdale, NY; www.smart-sourcing.com), says that the China market is still developing rapidly. Pellegrino, who compiled last month’s top 10 reasons to outsource (immnet.com/articles/2007/October/3376), believes that the way a company approaches the outsourcing process makes all the difference.

“The first step is to make sure your corporate culture is ready for the change—not just the management, but all of the employees,” he says. “Custom molders should stress that outsourcing a few projects to China frees them to develop new projects that address customer desires, not just needs. If you have an existing customer who needs a part molded in a 500-ton press, but you don’t have that size press, it makes sense to outsource it rather than chase away business.”

Pellegrino’s advice includes starting with a small project to develop trust. “Brokers will just put you in touch with a factory or handle logistics. Full-service firms such as SSI should be able to take a project from cradle to grave.” SSI has 37 people in its Shanghai office, including graduate engineers with a minimum of 10 years experience. There is also a Ningbo office with seven employees.

“We’re not going after Fortune 500s, but rather the small to midsize market. We can assist with manufacturing engineering in development of new products, and suggest how to make it better or for less cost or with a more robust manufacturing process.”

What are some of the cultural differences associated with doing business in China? “Don’t assume you can use the same tactics in negotiating business deals in China as you can in the U.S. Everything is built on relationships, so money is not the only motivator. You’re not going to get the best cooperation if you only negotiate based on money. We have 80 core vendors, and chose them after we interviewed hundreds of vendors.”

Another caveat: You have no presence if you aren’t located in China. “Some of our employees live at the factory. The Chinese feel that if it’s not important enough for you to be here talking to me about it, it must not be very important to you.”

Finally, says Pellegrino, “Make sure your product lends itself to outsourcing in China. Clarify your goals and your product. The right candidate is a labor-intensive, value-added product.”—MM

Invading the toy market with industrial design

It fits in the palm of your hand, costs less than $10, avoids obstacles as it crawls around on the floor, and reverses direction when you clap. The micro-robotic Hexbug is the result of collaboration between Ignition (Plano, TX; www.ignition.com), an industrial design and development firm, and Innovation First Inc. (Greenville, TX; www.innovationfirst.com), a product engineering company. In three months, more than a half-million micro-robotic Hexbugs have been sold, and factory production has been stepped up to keep pace with demand.

“When designing this product, we wanted to create an aesthetic that was simple, easy to manufacture, and yet had a lot of visual interest,” says Doug Galletti, senior industrial designer at Ignition. “So, we made the decision to expose the electronics using a clear, tinted plastic body, without relying on secondary decorations, like graphics or silk-screening. We borrowed visual cues from nature and created five different body designs that would work on the same chassis for better manufacturing efficiency. In the end, we created a very clean, elegant, inexpensive solution.”

A three-way steering feature enables the bug to travel in a straight line until it “hears” a loud noise or “senses” an object. The bug then reverses in a half circle left, and moves forward again in a new direction. Repeated claps or sharp sounds cause the bug to back up until it is aligned in the desired direction.

RadioShack is the exclusive North American retailer of the Hexbug. Bandai, the leading toy manufacturer in Japan, also recently signed a deal for global distribution rights, with plans for other products to follow. “We had a rough idea for this product, but Ignition brought it to life,” says Joel Carter, VP of marketing at Innovation First. “They transformed our concept into a viable market-ready product and helped us to create an entirely new product category.”—MM

Outdoor sports and leisure products should benefit from softer, more transparent grades of TPU, Esposito says.

7 things you may not know about TPUs

Louis Esposito, business development manager for Merquinsa North America (Seabrook, NH; www.merquinsa.com), believes that TPUs may be misunderstood by some within the plastics industry. “TPUs deserve a new look. Newly developed grades have come a long way in a short time in delivering features and benefits,” he says. “New aliphatic and soft TPU upgrades and formulations, as well as combinations of both, have emerged as an optimum solution for many products.”

Esposito explains that softer, plasticizer-free TPUs offer greater ease of molding and a wider range of molding parameters. They also provide UV and color stability along with higher wear resistance. Applications now include automotive interiors and exteriors, offshore marine products, and sports and leisure products.

And the seven things? We give you Esposito’s list:

Cost savings. Even though TPUs are slightly more costly than other TPEs, properties often enable molders and designers to use less material and provide a far superior look. A thin skin can be overmolded onto nearly any type of substrate, including ABS, PC/ABS, and PA.

Moldability. Plasticizer-free TPU formulations are easily injection molded down to low hardnesses and are ideally suited for multicavity, high-volume production.

Transparency. Several grades can now be formulated to be nearly optically clear. New application considerations here include transparent ski boots, watchbands, and protective coverings for consumer electronics.

Better resilience properties. New TPU grades have excellent recovery and compression set for applications such as seals and gaskets.

No halogen. Application areas that benefit from this property include molded furniture armrests, automotive interior parts, and athletic shoe tags and logos.

Hydrolysis and microbial resistance. TPUs can be used in parts for offshore applications such as cable connectors where mold, mildew, and severely demanding environments cause problems for other TPEs.

Weatherability. Nonyellowing injection molding grades allow for the design of scratch-resistant consumer goods and automotive parts with light and transparent colors.—MM

Assess your molding acumen

Do you know how much viscosity degradation you should expect from virgin material to molded part under proper processing conditions? How about the best way to handle the cushion? If you’re feeling like you want a better handle on your (or your employees’) knowledge of the injection molding process and have 20 minutes to invest, take the 84-question test at www.traininteactive.com/free/assess and find out just how well you know your stuff. After you finish, the test’s creator—A. Routsis Assoc., a division of RJG Inc. (Traverse City, MI)—e-mails you your score for general topics that include safety, the IM machine, processing, materials, tooling, process controls, and quality and economics. Unfortunately, you won’t get the answers to the test in that e-mail, but A. Routsis does tell you where you need help and what training services it offers to improve your game.

While at the A. Routsis website, you can also find recently released Focused Training Modules. By subscribing to this free weekly service, users receive instructions, a video training lesson, a training plan, an on-the-job task sheet, a quiz, and an answer key with detailed explanations.—AC

Buying a press? Start here

For those new to the process of buying an injection molding machine, a recently released, 184-page report from Research & Markets (Dublin, Ireland) entitled, “How to Choose a Plastics Injection Moulding Machine” may be the help you need. The a70 ($99) book offers a “crash course” on different types of molding machines, how to select a supplier, the importance of screw design, and a glossary of industry terminology, among other topics. To order or for more information, visit www.researchandmarkets.com.—AC

End-use applications for thermoplastics in Europe, 2006

On the rise: EU demand for TPs

According to industry consultants Applied Market Information Ltd. (pidbooks.com/ami/AMIdefault.asp), the European market for thermoplastics in 2006 grew at a rate of more than 3%, its strongest year since 2000. AMI credits an EU expansion and German recovery for thermoplastic consumption of about 40 million tons.

In the most recent of its regular plastics industry reports, AMI says that not all materials or countries benefited from the recovery. HDPE demand was relatively weak, as was demand for general-purpose polystyrene. On the upswing were PVC, LDPE, and ABS. PP and PET rang up less-than-expected sales, but linear polyethylene grades made a strong showing. Demand for commodity polymers rose on the strength of packaging markets, according to the report, which make up nearly half of the end uses for thermoplastics in Europe. Products in demand included flexible films for food packaging, injection molded PP for thin-wall packaging, HDPE for closures, PET for bottles, and PVC for building and construction uses.—MM

SPI honors safe plastics firms

Workplace safety is much more than a series of statistics, but there’s no arguing with a stellar record of zero occupational injuries or illnesses. Fifty plastics industry companies reached that goal last year and were recognized for their achievement with a Distinguished Safety Award from the Society of the Plastics Industry (SPI). Most notable among these companies was material supplier and processor Saint-Gobain Performance Plastics (www.plastics.saint-gobain.com), which took 19 of the 50 slots for its worldwide locations from Akron, OH to Bangalore, India. Awards were also given to 142 additional companies in three other categories signifying varying levels of achievement in safety. SPI members can view the full list at www.plasticsindustry.org.—AC

GM’s Opel Flextreme concept car continues a trend toward large panoramic roofs made from PC glazing.

Clear concept at Frankfurt Motor Show

Polycarbonate glazing emerged as a clear trend this fall at the 2007 Frankfurt Motor Show (IAA). PC-outfitted concept cars such as the Hyundai Qarmaq and Chevrolet Volt debuted at shows earlier in the year, but in Germany, GM unveiled its Opel Flextreme concept for the first time. Flextreme features a large integrated windshield and roof panel molded entirely of PC (Lexan GLX with Exatec glazing from Sabic Innovative Plastics).

Anthony Lo, advanced design director for GM Europe, says, “Our recent collaboration with Sabic IP on the Chevrolet Volt has continued with the Flextreme, and will gain strength as the company moves on to future projects. Together, we can create exciting designs and new energy-diverse technologies to benefit car owners and the environment.”

In addition to PC glazing for roof and windows, the Flextreme also incorporates PC/PBT molded body panels (Xenoy iQ) made in part from recycled materials. Weight reductions up to 50% over traditional materials are possible when automakers incorporate both plastic glazing and body panels, according to Sabic IP (www.sabic-ip.com) sources.—MM

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