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November 1, 2003

5 Min Read
E-shots Web Exclusive: PIM yet to achieve predicted growth

Powder metal injection molding is progressing, but complaints about offshore competition are being sounded from that industry as well. “The economy has played havoc on the PIM industry and looking back on the rosy outlook of my industry study [North American Overview of PIM Markets], this appears to be more wishful thinking than reality,” says Robert Cornwall of Innovative Material Solutions Inc. (State College, PA).

The projections for worldwide PIM sales for future growth may be more wishful thinking than reality, given the industry's flatness from 1999 to 2003, Robert Cornwall acknowledges.

A lot of factors, including the downturn in the economy, are contributing to the industry’s slower-than-expected growth. It was anticipated that by 2005, U.S. PIM sales would top $2 billion. Currently, there are some 290 identified PIM parts manufacturers in North America with $800 million in sales. Although the study shows an increase in metal molding and a decrease in ceramic, it’s not expanding at the rate originally anticipated.

Worldwide, there are 10 feedstock suppliers, according to information supplied by Cornwall’s study. Some 6000 people are employed in the industry, one-half of those in the United States. In fact, the U.S. represents some 49% of sales in this industry, with Asia representing 26% and Europe 25%.

In powder and feedstocks, Cornwall notes, there are fewer powder suppliers, but powder prices are moving slowly lower. “Parts manufacturers will look to use preformulated feedstocks, leading to greater part-to-part uniformity until they reach a critical size, at which point they will start using their own feedstock for major products to reduce costs,” says Cornwall’s report.

A Marketing Dilemma

Those players in PIM tend to promote themselves and the process much better than the ceramic companies do, notes Cornwall. “The PIM guys try to distinguish themselves as a unique technology with high-performance, high-value, and lower-cost parts,” he says. “They tend to market themselves as an alternative to castings and small machinings.”

Like their plastics injection molder counterparts, most PIM processors are looking for niches to set themselves apart from the competition. “They’re sometimes successful at that, but more often than not they will go after anything anyone expresses an interest in,” says Cornwall. “This has led to multiple companies quoting parts. That’s sort of new, which means those who are using the technology are becoming savvy enough to get quotes from everyone and then try to sort through the differences in suppliers.”

Key PIM markets are just about as varied and broad as the market for plastics, and include aerospace, automotive, business machines, industrial and consumer products, medical and orthodontic devices, and watchcases and bands. Naturally, PIM processors want to seek out the more lucrative and higher-volume components such as automotive. However, that has presented some problems, says Cornwall.

“The automotive guys are saying, ‘If you’re going to make this, I need multiple millions of parts,’ and no one could do that much,” he explains. “The industry is just too small to address huge quantities. There’s not enough machine time and materials available to do millions of parts.”

Other markets where there are opportunities for volume work include industrial applications and medical and gun parts, Cornwall adds. Still, customers continue to be concerned with the variability among vendors because of processing differences, quality of the parts, the learning curve associated with the process, and a lack of knowledge about the technology.

Barriers to Entry

Cornwall confirms what appears evident when researching this industry: It’s flat. “There are no newcomers to PIM, and those out there are just trying to grow,” says Cornwall. “There’s a huge fall-off in the interest from companies who thought they’d get into this technology. They found out that while they can do it, it is a complex process and you have to understand all aspects of it to make it work.”

A few years ago, it looked like a no-brainer for plastic injection molders to add PIM to their plate of capabilities. After all, molding is molding, right? Not exactly, says Cornwall. “It’s a different world from plastics molding,” he explains. “Most molders are not materials people, so they don’t understand sintering and debinding. Some have set up MIM operations, but not a lot.”

The Market Giveth and It Taketh Away

Micromolding for PIM applications is becoming fairly interesting to many because of the small machines required, Cornwall adds. “Orthodontics is a big player here, and I’m seeing it starting to grow. There’s some in Europe, but nowhere do they invest in teeth like they do here.”

And for large parts, there’s still an effort going on using the old Honeywell process, says Cornwall, who has hopes for strong growth despite the economic conditions, because of the benefits of the technology.

But PIM still faces the same offshore competition as plastics molding. China has become a factor in its growth, not because the technology is moving there, but because with cheap Chinese labor parts can be machined more inexpensively than any type of casting technology, Cornwall says.

As IMM has noted in past articles, marketing the technology is a factor limiting growth. That’s a problem internal to the manufacturers, notes Cornwall.

“The industry as a whole is too fragmented to market itself effectively, and there continues to be a problem educating potential customers about the technology to create demand,” he says.

Contact Information

Innovative Material Solutions Inc.
State College, PA
Robert G. Cornwall
(814) 867-1140
[email protected]www.imspowder.com

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