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Mold components suppliers batten the hatches

They are a critical link in the plastics processing chain, and when the chain begins to strain, they feel it as hard as anyone. Mold component suppliers are feeling the tightening of the screws, so to speak. “We’re not seeing the purse strings tightening,” says Rick Oles, North American president of Plastic Service Group (PSG). “We’re seeing the purse strings locked down.”

Clare Goldsberry

February 4, 2009

3 Min Read
Mold components suppliers batten the hatches

Oles explained that he’s seeing a trend – and not just in the automotive industry, although it’s predominant in automotive – for work on many new mold-builds to be postponed, with more engineering change orders (ECOs) and mold refurbishment to keep current tooling in production. “Capital purchases are being delayed … People are just waiting,” Oles says.

Al Hickok, midwest sales manager for Progressive Components, agrees. “In general, there seems to be a very hesitant buzz about the first quarter of 2009 taking an upturn, possibly because some OEMs are holding on to their purse strings to get through the year. Whether that translates into a good first quarter or not remains to be seen though. We hope it will.”

Dave Lawrence, president and CEO of Milacron, confirms the obvious: “I think, as everyone knows, we’ve seen significant change in the business over the last four to five years, and the impact of globalization on the moldmaking industry.” He adds that a number of D-M-E’s customers that have embraced globalization are “tending to weather the storm better” than those who haven’t. “Some have strategic partnerships or have put a plant in another country. We see that as a continuing trend that is beneficial to all involved,” says Lawrence.

On the other side of the coin, mold component suppliers are seeing some work coming back from Asia. “We have seen some small mold shops pick up business from China, which is good, but not necessarily sustainable,” says Hickok. Others are relatively busy, or at least quoting often, he says.

In the past December and January tended to be the months that big OEMs got their budgets for the coming year, but that didn’t happen the past months, or budgets were so reduced that moldmakers and mold component suppliers say finding markets that promise growth and profitability is very difficult. D-M-E’s Lawrence comments, “We see some growth opportunities in the area of medical, in North America particularly. I have to qualify that by saying that while medical is doing pretty well, it’s not robust by any stretch of the imagination. However, it’s stable.” 

PSG’s Oles says from his vantage point it’s not all doom and gloom. “The upside is that there is work out there, and some good packages of molds for automotive when engineering cuts them loose,” he says. “I think 2009 will be a tough year, a cautious time for sure, but there will be opportunities.”

Martin Baumann, business manager for hot runners at Husky, is also cautiously optimistic about the coming year. “Certain markets may still see strong activity in terms of building new molds. Even in markets where the number of units produced appears down, new molds will still be required for new product launches.”

While material prices have fallen somewhat, credit continues to be tight. “Molders and moldmakers will certainly see difficulties in getting credit approval for capital intensive projects,” said Husky’s Baumann. “As a result, more of an emphasis is being placed on existing projects, increasing productivity and getting more out of existing equipment. Mold refurbishment and mold maintenance programs will grow in importance as molders will be focusing on trying to make molds and equipment last longer and perform more efficiently.”

Husky’s Baumann predicts that innovation and technology will continue to play a key role in the industry with an increasing emphasis on working with suppliers. “As long as companies stay creative and approach challenges in a collaborative manner with their suppliers, we can all stay competitive in North America.—[email protected]

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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