Engel set for big move with MacPAC packaging machine range

Engel''s move into high-speed molding machines for thinwall packaging is gathering speed, officials at the firm''s Schwertberg, Austria headquarters told MPW during a visit in mid-May. The firm has been eager to re-enter the packaging machine market since late 2001, but the flood that destroyed the Schwertberg facility in 2002 forced the firm to place those plans on hold, says Georg Tinschert, president of Engel Austria GmbH. The firm''s MacPET range of PET preform machines is already established for molds up to 144 cavities, he says, and the firm now is developing partnerships with leading moldmakers serving the packaging market. Engel has a 75-person moldmaking shop in-house, but this specializes in technical parts molds.

Engel had a strong packaging machine presence until the 1980s, when demand for its larger machines, and its then-limited capacity, forced it to focus on manufacture of those. "The flood slowed our advance into packaging, but our new plant layout [here] means we can enter that market and challenge the established machine suppliers even more competitively," explains Tinschert. He says the MacPAC machine range will be extended to presses with at least 275 tonnes of clamp force.

For details, be patient. Engel spokesman Reinhard Bauer says that the new MacPAC units "will not just be `me-too'' machines; we''ll bring something better" to the market. Bauer says specifics will be announced at October''s Fakuma exhibition in Friedrichshafen, Germany.

Financially, Tinschert says FY 2004, which ended March 31 for Engel, was a banner year with sales of €587 million, about 9% higher than FY 2003. Growth was global in nature, with Eastern Europe developing especially well for the firm. Indeed, the Czech Republic has developed into one of the firm''s top five markets. He says hopes are to maintain sales this year at FY 2004 levels.

Engel in April established a new automation center at its St. Valentin, Austria facility to help customers integrate very complex automation systems into injection presses.

"Demand for these [complex automation systems] is rapidly increasing, especially among customers purchasing our larger machines who want to set up complete work cells," says Tinschert.

In BriefHexion takes the stage

Borden Chemical, Resolution Performance Products, Resolution Specialty Materials, and Bakelite are being combined to form Hexion Specialty Chemicals (Columbus, OH). With combined revenue exceeding $4 billion, the firm will be the global thermoset plastics supply leader. Borden president and CEO Craig Morrison will head Hexion. Borden announced it would buy Bakelite last year. That deal and the merger are expected to close this quarter.

PolyOne expands PVC presence

Custom compounder and distributor PolyOne Corp. (Cleveland, OH) has purchased the PVC compounding business of Novatec Plastics Corp.,  (Cleveland, OH), beginning a transition from the cost-cutting plant closures prevalent following its September 2000 creation through the merger of MA Hanna Co. and Geon, and shifting to strategic acquisitions that serve its focus segments, including vinyl compounds, colorants, engineered materials, and distribution.

Progressive, Gram to cooperate

Mold components supplier Progressive Components International Corp. (Wauconda, IL), will develop a standardized mold-component package for Spin Stack rotating-core injection mold technology, available for license from Gram Technology (Scottsdale, AZ). "This forms a major milestone in our effort to establish Spin Stack Technology as an industry standard for single and multicomponent and inmold assembly molds," says Jes Gram, Gram Technology Inc. president. Gram also added Hermann Plank as the company''s new VP of sales and marketing. Plank left The Tech Group (Scottsdale, AZ), a Spin Stack licensee, to join Gram.

GE turns green explores new extrusion territory with delphi

The world''s natural resources, if you haven''t noticed, are in steady decline. General Electric Co. (GE) has noticed, and in early May announced the launch of its new Ecomagination initiative. Under this program, GE promises to: increase investment in "clean" technology from $700 million in 2004 to $1.5 billion by 2010; double revenues from products and services that provide "significant and measurable environmental performance advantages to customers," from $10 billion in 2004 to $20 billion in 2010; and reduce its own greenhouse has emissions by 1% from 2004 to 2012, and reduce the intensity of greenhouse gas emissions by 30% in the same period.

Exhibit A in this effort comes from GE Advanced Materials, which is working with Tier 1 automotive supplier Delphi''s Packard Electric Div. on a technology that will substantially reduce the amount of plastic used in wire and cable coating applications in vehicle electrical systems. Vinyl and cross-linked polyethylene (XLPE) are the traditional materials of choice for such applications, but Delphi was looking for ways to save material and weight. GE met the challenge with a modified, extrudable version of its Noryl PPE/PS. The material does a lot of nifty things for Delphi, wire and cable, and consumers: It replaces .4-mm XLPE with .2-mm Noryl, saving 25% of material; it''s recyclable and friendly toward end-of-life issues like RoHS and ELV; contains no halogens; exhibits good temperature and flammability characteristics; and reportedly proves more abrasion-resistant than traditional materials.

In a Washington, DC press conference announcing the development, Delphi said the Noryl will be used on 2007 model-year cars. GE said it developed this new version of Noryl at Delphi''s behest and noted that it''s exploring other applications in the electronics market. GE would not reveal how it altered the Noryl for the wire and cable application except to say that it was chemically modified.

Despite loss, Milacron optimistic tide is turned

Losses narrowed in the first quarter for Cincinnati-based machinery and mold component manufacturer Milacron, with a stronger performance in North America offsetting retraction in Europe. Overall, the company had a net loss of $9.1 million compared to 2004, when it lost $16.6 million in the first quarter, but new orders of $202 million were up 8% to their highest level in four years. Demand in the automotive, packaging, and consumer goods sectors in North America helped push injection molding machine orders up 20% to $95 million, with sales of $87 million-an increase of 13% from Q1 2004.

The company remains optimistic for the rest of the year, with Chairman, President, and Chief Operating Officer Ronald Brown reporting that capacity utilization in the U.S. hit 84.8% in March, its highest level in five years, indicating the possible need for machinery expansions in the future.

At an open house in late April at Milacron subsidiary Ferromatik Milacron (Malterdingen, Germany), Karlheinz Bourdon, president of global plastics machinery for Milacron, says the firm''s operative earnings in FY 2004 nearly tripled from $6.3 million to $17.4 million as a result of implementing improved manufacturing steps. About two-thirds of Milacron''s plastics machinery business sales are from injection press sales; of the rest, two-thirds is from blowmolding machinery, and the remainder, extrusion units.

Bourdon says demand growth for injection molding equipment is "on the way up" in the U.S., and that his firm sees double-digit demand growth in India, where it has manufacturing operations.

He agreed with recent comments at competitors that molding machine sales in Europe have stagnated, but added, "The time is ripe for all-electric [injection molding] machines in Europe." Ferromatik claims to be the market leader among European machine makers for all-electric press sales in Europe; competitor Demag Plastics Group makes the same claim.

Carteaux hits the ground running in new SPI post

Speaking of Carteaux, MPW caught up with the new Society of the Plastics Industry''s (SPI) president in mid-April, just a few weeks after he took the helm of one of America''s most influential plastics industry trade associations. Carteaux''s high-energy style appears to be breathing new life into the organization on several fronts. He took a few minutes in his new Washington, DC corner office on K Street to walk us through his priorities.

His six-point plan covers, in order of importance, membership growth, public policy outreach, better relations with mass media, public outreach, member services promotion, and better cooperation with other trade organizations.

Carteaux''s early efforts have taken him to California to deal with the emerging bag-tax issue there and to Capitol Hill to help lawmakers better understand and appreciate the importance of the U.S. plastics industry-America''s fourth-largest manufacturing segment with more than 1.4 million employees and more than $310 billion in sales-which is largely underappreciated in Washington, he says.

Carteaux sees SPI''s mission as one not only to promote the importance of plastics manufacturing, but of manufacturing in general. "I truly believe that this nation must have a strong and vibrant manufacturing sector. We can''t be a services-only country. To maintain manufacturing in the U.S., we have to prove the value of SPI; what it does, and who it serves."

BASF, Shell bid adieu to Basell; BASF sheds PS in North America

The winning bid for polyolefins supplier Basell, the 50-50 joint venture of BASF (Ludwigshafen, Germany) and Shell Chemicals (London), was an estimated €4.4 billion from New York-based Access Industries, controlled by Russian-born billionaire Leonard Blavatnik, and The Chatterjee Group of India, which controls Haldia Petrochemicals (Haldia, India). Reported U.S. State Dept. pressure prevented the takeover of Basell (Hoofddorp, Netherlands) by Iran''s state petrochemical giant NPC (Tehran).

Basell, formed in 2000, grew to be number one worldwide in PP capacity and tops in PE in Europe, with $8.8 billion in total annual sales. According to its own 2005 estimate, Basell had a total polyolefin capacity of 118 million tons, aided by nine joint ventures, including Polibrasil in South America, SunAllomer Ltd. in Japan, and Saudi Polyolefins Co. in the Middle East.

Ten days before the Basell announcement, BASF sold its North American PS business to chemicals supplier Ineos (Lyndhurst, England) for an undisclosed figure. BASF says it remains committed to styrenics but that the divestment, which included its Joliet, IL 385,000-tonne/yr PS and HIPS plant, is part of its North American restructuring. It bought the Joliet plant from Mobil in 1992. Ineos also owns EVC, Europe''s largest PVC supplier.

TI readies tank/filler-pipe plant in Georgia

To meet growing North American carmaker demand for complex geometry fuel filler pipes integrated into fuel tanks, TI Automotive (Warren, MI) has begun hiring for its newest 145,000-sq-ft Hartwell, GA plant, which will use 3-D suction blowmolding technology from Kautex Maschinenbau GmbH & Co. (Bonn, Germany).

The $30 million plant was set for a grand opening on June 7, with 100 new employees by then, and will start pilot production in September of fuel tanks and filler pipes for the area''s numerous automotive OEMs. It will be the first TI Automotive facility, out of 100 globally, to incorporate the assembly of fuel-tank components, filler pipes, and tanks under one roof.

According to Joseph Roznowski Jr., Hartwell''s plant manager, the plant will operate two Kautex machines: a KBS3D with robotic parison manipulation for filler pipes, and a second 150-ton Kautex for tanks. He says the integrated filler-pipe and fuel-tank subassembly is more commonly used in South America and Europe. "We feel this is an emerging market for the U.S.," Roznowski says. "The one-piece design allows for more complex filler-pipe geometries for our customers'' vehicles." Roznowski adds the company has not seen significant pressure from theromoformers in fuel tanks, as has been reported in some quarters.

GOING: Tyco''s plastic biz on the block

In its ongoing reorganization, conglomerate Tyco says it now plans to sell its plastics processing and adhesives business. The announcement was made in the firm''s conference call announcing second-quarter earnings on May 3. The firm tried to sell its plastics processing activities in 2002.

Tyco has its operations headquarters in Princeton, New Jersey. The firm is active in five business segments, with Tyco Plastics, at $1.2 billion in annual sales, the smallest. The firm says plastics is no longer a strategic fit.

Tyco has closed dozens of its processing facilities in the last two years but remains one of North America''s largest plastic film processors. Gwen Fisher, VP communications at Tyco, says the plastics business now includes 22 processing facilities, 21 of which are in the U.S. Film extrusion accounts for the bulk of the business. Tyco''s plan, she says, is to sell the entire business segment, but it is too early in the process to comment on how the deal will be structured. Tyco wants to conclude the sale by year''s end and has not ruled out breaking up Tyco''s plastics processing division.

GOING? Is there room for plastics at O-I?

Packaging giant Owens-Illinois (Toledo, OH), newly branded as just O-I, continues its transition away from plastic and toward glass. In an April 5 release announcing the new O-I brand, the company explained that the acquisition of South American glass bottle manufacturer BSN Glasspack, plus the sale in 2004 of its blowmolding operations to Graham Packaging, resulted in a portfolio shift wherein it would only be retaining a "niche" plastics presence in health-care packaging and specialty closures, with 88% of its regular packaging made from glass.

O-I closed a plastic bottle blowmolding plant in Sullivan, IN in mid-April, and a late April release of first-quarter earnings showed greater divergence of plastics- and glass-related revenues. Following the Sullivan shutdown, O-I now operates 18 plastics manufacturing plants (15 in the U.S.) out of 100 total production facilities. Sullivan injection blowmolded small polyolefin bottles for over-the-counter analgesics like aspirin, as well as vials for animal health products.

GONE: Tech Group sold

West Pharmaceutical Services Inc. acquired the business assets of privately owned custom injection molder and contract manufacturer The Tech Group Inc. (Scottsdale, AZ). West will pay $140 million in cash for nine Tech Group production facilities in Arizona, Michigan, Indiana, Puerto Rico, Mexico, and Ireland. West will not acquire The Tech Group''s ownership interest in Tech Group Asia. A portion of the purchase price is contingent on performance of the business in 2005 and 2006.

West Pharmaceutical Services (Lionville, PA,) manufactures components and systems for injectable drug delivery, including stoppers and seals for vials, closures and disposable components used in syringes, and IV and blood-collection systems. The company also provides products in the personal care, food, and beverage markets.

The Tech Group specializes in molded components and assemblies for the medical device, consumer, and personal care markets. The Tech Group will maintain its current business and operating structure through an interim period, with business and management teams remaining headquartered in Scottsdale, AZ.

"We believe the acquisition by West Pharmaceutical Services provides a wider and more stable global footprint for both businesses," said Steve Uhlmann, Tech Group chairman.

UPG CEO steps down, plant closes

Nine days after the April 13 announcement that Shannon White, CEO of United Plastics Group Inc. (UPG; Westmont, IL), was resigning, the company announced that it would close its El Paso, TX molding facility as of June 30. White came to UPG in July 2001, replacing William Kriss, after previous career stops at Rexam PLC, Alcoa, and AlliedSignal. It was work with UPG''s founder, private investment firm Aurora Capital Group (Los Angeles, CA), as a consultant that initially landed him the UPG job, viewed as a turnaround gig.

White will stay on as a member of UPG''s board after diversifying the company from largely molded electronic components to contract manufacturing in medical, consumer, and automotive. He also oversaw a recent expansion into Suzhou, China. Following the closure of its 90-employee El Paso plant, UPG maintains operations in five U.S. states, Mexico, the U.K., and China, with more than 300 molding machines globally.

According to UPG VP of Sales and Marketing Bill Featherstone, the 62,000-sq-ft El Paso plant ran approximately 40 machines, and while largely serving the automotive industry across the Rio Grande in Juarez, it also had customers in medical, consumer goods, and some electronics, which are migrating from the El Paso area.

"Our customers are basically letting us know where they want us located," Featherstone said. "They''re saying, `Look, we would like to be in some other locations as opposed to El Paso.''"

One man''s scrap...

Scrap plastics are big business for plastics recycler Daly Plastics BV (Brummen, Netherlands). Peter Daalder started collecting, sorting, and trading waste plastics when he was 16; the firm he founded now has earned ISO 9002 certification.

Main markets for the post-production and washed post-consumer PET bottle scrap are China, India, Pakistan, Malaysia, Turkey, Russia, Vietnam, and the U.A.E. "Countries like Pakistan, Indonesia, the Philippines, and Malaysia previously bought secondary materials [to process] as cheap alternatives to virgin," Daalder says. Now they tend to play the market and buy only when virgin resin prices spike, he says.

The biggest markets for Daalder''s operation are India and China. He has been able to take advantage of low transportation costs using empty sea containers returning to Asia after transporting textiles and other goods to Europe. Currently, containers headed east cost $325 each.

"For us, it is cheaper to ship waste plastics from Rotterdam to China than to transport the same load from Rotterdam to Frankfurt," Daalder says. About 80% of his Chinese shipments are made up of polyethylene, polypropylene, polystyrene, vinyl, polyester, ABS, polycarbonate, acrylic, and nylon.

In addition to issues such as legislative changes and currency fluctuations, he says theft is a problem. "Container numbers will be switched with empty containers so that an entire 40-ft shipment goes missing," he says, "and it is never the containers filled with commodity plastics or PET bottles, but always high-quality scrap such as acrylic sheet, acetal, or polycarbonate."

EXTRUSIONHoneywell expands Latin American reach

The films extrusion business of Honeywell Specialty Materials (Morristown, NJ) signed a licensing, distribution, and marketing agreement with Chilean films processor Sigdopack, whereby that firm will make and market Honeywell''s Capran Medallion and OxyShield BOPA (biaxially oriented polyamide) films in Central and South America.

"We already have sales in Central and South America but this deal will greatly expand those," predicts Rich Daniels, general manager specialty films at Honeywell. He says South America, with its huge seafood and coffee industries, is an ideal market for BOPA films and that Honeywell had been in talks with Sigdopack since spring 2004.

Capran Medallion film typically is used in packaging of processed meats and cheeses and for pet foods, while OxyShield is used in applications where an oxygen barrier is critical.

Under the deal, Sigdopack, part of the Sigdo Koppers holding company, is also exclusive distributor of Honeywell''s BOPA films in Latin America. Honeywell becomes a non-exclusive distributor of Sigdopack''s BOPP (biaxially oriented polypropylene) films in the U.S. and Canada. Sigdopack is now building what it says will be the world''s largest BOPA film line, scheduled for startup late this year. The processor has about 30,000 tonnes/yr capacity already.

Extruders moving well at Kiefel

Executives at blown film extrusion line manufacturer Kiefel Extrusion (Worms, Germany) say order intake from January through March 2005 was about €10.7 million, up from €6.7 million during the same period last year.

Kiefel Extrusion CEO Edgar Gandelheidt says the good business is globally distributed, and cites France and Italy as particularly strong Kiefel markets at present. The firm''s domestic market is stable but demand is growing for lines to process five- or more layer films. Despite currency exchange rates, he says the firm is holding its own in the U.S. "We just hired another salesman there," he says.

Gandelheidt says Kiefel''s work to improve its manufacturing operations is paying dividends. This month the firm adds another five-axis milling machine.

Berstorff names new U.S. boss

Extruder manufacturer Berstorff (Hannover, Germany) has named Reiner Bunneberg as new Sr. VP North America for its Florence, KY-based North American operation. In Hannover, Bunneberg was most recently VP sales. His new title is Sr. VP for North America.

The firm plans to start machine manufacturing there as a result of demand growth and for currency exchange reasons. Also moving to Florence for Berstorff is a new technical manager, Johann Ertl; he had led the firm''s twin-screw extruder engineering department.

Bunneberg takes over the position left vacant after Korbinian Kiesel, former head of Berstorff in North America, was moved to fellow Mannesmann Plastics Machinery (MPM) member company Billion, in Oyonnax, France, to take charge of that injection molding machine manufacturer.

Brückner moves into CPP

Film-stretching equipment maker Brückner Group (Siegsdorf, Germany) is adding lines for cast polypropylene film (CPP) to its product portfolio. The move by Brückner Formtec augments the company''s biaxially oriented polypropylene (BOPP) lines. CPP equipment covers film widths of 3 to 6m and outputs up to 2000 kg/hr. Major markets are for transparent packaging including textiles, food products, and flowers.

In other news, Thomas Langer (center), former technical manager at SML (Lenzing, Austria), is now comanaging director for sales and technology at Brückner Formtec. He replaces Peter Lechner who has left the company. Matthias Nagy (right) remains comanaging director responsible for commercial matters. Volker Siebott, (left) ex-head of sales at SML, joins Brückner Formtec as sales director.

Europeans find RECIPE

A European venture involving partners in six countries to establish and promote best energy-saving practices for the plastics processing sector has been launched. RECIPE (Reduced Energy Consumption in Plastics Engineering), part of the European Commission''s Intelligent Energy-Europe program, provides benchmarking for plastics processors'' operations and will develop an "energy manager''s toolkit" as well as a cost-of-ownership model for plastics processing equipment.

RECIPE says that if European plastics processors'' energy consumption was dropped 10%, this would reduce CO2 emissions by more than 3 million tonnes/yr. More than 27,000 facilities in England, Denmark, France, Spain, Belgium, and Germany are expected to take part in the initiative.

New Demag boss outlines strategy

Any changes at Demag Plastics Group (DPG) will be subtle. That was the message broadcast by Herbert Högemann, the chief operations officer at the injection press maker, during the firm''s Cleanroom Forum in late April at its Schwaig, Germany headquarters. Högemann, who joined the firm in January from a woodworking machine manufacturer, also now holds the executive function at DPG, effectively replacing CEO Helmar Franz, who left in late April.

"The strategy will not change much. There may be some small differences, with a little more focus on some areas," such as all-electric machines. He says the firm increased its sales in the first six months of its FY 2005 in comparison to the previous year, but the euphoria that filled the halls at last October''s K show was, it seems, fleeting. "We''ve seen, as have our competitors, that the optimism at K hasn''t panned out as well as it seemed [it would]," he said. The market for injection molding machinery in Western Europe is especially slow, he said.

Högemann told MPW that he is searching for an executive to take charge of Demag''s North American operations. The top position there is vacant since Bill Carteaux, former president of Demag in the U.S., left in January to take charge of Society of the Plastics Industry trade organization. North American operations are now being run by Brian Bishop, the firm''s former North American sales director.

Collins & Aikman''s freefall

Shortly after its CEO resigned, questions regarding accounting increased, S&P relegated its corporate debt to junk status, and the New York Stock Exchange delisted its shares, Tier One automotive supplier Collins & Aikman (C&A; Troy, MI) succumbed to the grips of a death spiral that resulted in it declaring bankruptcy on May 17. By many estimates the largest North American injection molder in terms of revenue, C&A gained that status following the 2001 acquisition of Textron Automotive''s Trim Div. for $1 billion cash and 18 million C&A shares. That purchase''s 38 molding facilities and 13,000 employees added interior and exterior trim to C&A''s floor, fabric, and acoustic systems, setting the company up as a one-stop-shop for cockpit and interior subassemblies.

The deal also more than doubled annual sales from 2001 to 2002, taking them from $1.8 to $3.8 billion, but it did nothing to stem losses in annual net income, which rose over 2001 to 2003 from $46.2 million to $53 million to $57.5 million.

C&A ties much of those losses to increased exposure to skyrocketing resin prices, which the company cited in a recent report as the highest the company has ever seen. In all, it estimated its total annual material expenses as $2.1 billion, a 30-year high based on its own index, with $300 million in increased exposure to PP, TPO, PC, ABS, and PC/ABS, along with more than $100 million in the polyester and nylon fibers linked to its interior flooring business.

In an attempt to protect itself from those rising costs, C&A announced last November that it had completed a three-year integration and rightsizing program, closing 25 facilities (15 manufacturing, 10 sales, R&D, support) and reducing headcount by 25% from 32,000 to 24,000.

Part of this plan, however, included accelerated insourcing and vertical integration of capabilities as it attempted to add leverage to its resin buying, reduce supply chain logistics, and use up existing machine capacity and fixed overhead.

The company even opened seven new facilities (Elmdon and Coleshill, U.K.; Hermosillo, Mexico; Port Huron, MI; Montgomery, AL; Brampton, ON; and Kocaeli, Turkey) while bringing portions of its blowmolding, appliqués, die cutting, and compounding requirements in house. In a presentation to investors, the company called for "internal production (in user plant if feasible) of all injection molded parts."

Analysts estimated C&A''s debt at $2 billion, and it had only $13.4 million in cash on hand as of May 11. It had interest payments of $26.9 million and $26.7 million coming due on June 30 and Aug. 15, respectively, and with no new credit available, the company had few if any options. Charles Becker, founder of Becker Group Inc., an interior components supplier, has agreed to serve as acting CEO, following the resignation prior to the bankruptcy of former head David Stockman. Before they were delisted, C&A shares were trading at around $.11, with the 52-week high of $6.21 occurring last summer.

Degussa owns all of Cyro Industries

Specialty chemicals supplier Degussa AG (Düsseldorf, Germany) purchased Cytec Industries'' 50% holding in its acrylic sheet extrusion partnership, Cyro Industries, for $95 million. The move gives Degussa four U.S. production sites in Connecticut, Louisiana, Arkansas, and Maine that generated 2004 sales of $317 million. Degussa and Cytec formed Cyro in 1976. The purchase strengthens Degussa''s position as leading global supplier of methylmethacrylates (MMA)