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Resin distributors see success amid challenges of 2018

Resin distributors see success amid challenges of 2018North American resin distributors are seeing some good things so far in 2018, even if the market is facing some challenges.Most distribution executives contacted for this story said that their firms' results were up — in dollars or volume in pounds or both — in the first half of the year.John Jorgensen III has seen all sides of the distribution market this year at Conventus Polymers LLC, the Parsippany, N.J.-based firm where he's co-owner.2018 "has been a great year for us," he said. "We've seen high double-digit growth, and most of our end markets are up.""But it's been a crazy year in terms of supply," Jorgensen added. "Polycarbonate has been tight, and nylon 6/6 is crazy right now. We've never had a case where we couldn't supply a customer, but we do a lot of application development, and in some cases we've had to give a secondary [material] option."Results are what matterMarket challenges haven't prevented most distribution executives interviewed for this story from reporting solid growth."Our business is up, and we have an aggressive growth plan," said Ed Holland, president and CEO of M. Holland Co. in Northbrook, Ill. "We're up double digits in pounds. One of the reasons we're doing well is because we've invested in people, technology, new products and acquisitions. Our new business development group is starting to produce."Bamberger Polymers of Jericho, N.Y., has seen 12 percent volume growth in pounds, according to Mike Pignataro, North American sales vice president for the company."We're seeing slow and steady growth in the U.S. and Canada," he said. "There are a lot of good distributors out there, each with their own niche. We're all focused on what we do best and maintaining that business."Sales volume is up around 6 percent at Osterman & Co. in Cheshire, Conn., according to Dave Dever, distribution sales vice president. The firm's major focus has been on prime grades of branded resins.Chase Plastics Services Inc. President Kevin Chase said his Clarkston, Mich.-based firm has seen volume up substantially at rates he described as "high single-digit" and three times that of U.S. GDP growth."We're having a really good year," said John Moisson, president of Jamplast Inc. in Ellisville, Mo. "Pricing has been relatively stable, volume is good, and our customers have been doing well."Earnings resultsAmong publicly held firms, the distribution unit of Avon Lake, Ohio-based PolyOne Corp. saw first-half sales growth of 11 percent, but it saw operating profit for the quarter decline by 5 percent."We had a strong first-half revenue gain due to growth in several key markets," PolyOne Distribution President Scott Horn said in an email. "However, our bottom-line results were impacted by continued investment in commercial resources, higher transportation costs and material price increases."Raw material increases are driven by cyclical market dynamics, but we expect higher transportation costs to continue for the foreseeable future," he added.At Nexeo Solutions of The Woodlands, Texas, plastic distribution sales were up 8 percent for the quarter ended March 31, while gross profit increased 3 percent. Officials credited higher selling prices for the sales boost, as the firm's plastics sales volume in pounds was down 4 percent for the quarter."Our general theme is that we're seeing growth in line with GDP as we focus on investments and speed and customer intimacy," said Shawn Williams, senior plastics vice president..Err ... supply?▲ Kevin ChaseUncertain supplies of resins have led to some anxious moments for distributors in the first half."A lot of materials are tight," Kevin Chase said. "We're seeing it in nylon 6/6 and polycarbonate and acetal. We're not seeing allocations, but tightness."Demand is up, but no [resin maker] has added capacity since before the recession," he added. "Their [return on investment] is just starting to get there."When material supplies get tight, Chase said his firm "tries to work in the framework of our existing suppliers, but in some cases we have to satisfy customers and look to other options."On the commodity side, the polypropylene market also has been tight."We can sell a lot more of it if we could get it," Ed Holland said. "It's still a challenge. We don't see any relief in polypropylene until 2020 or 2021.""Customers look to us to solve their problems, but there have been times this year when it's been tough to be a distributor," added Grant John, president and CEO of PolySource LLC in Independence, Mo. "The situation in nylon 6/6 has been challenging. Not all applications can go to other materials."Moisson at Jamplast agreed that availability of nylon 6/6 has been limited, and that although ABS has been available, "there's not tons of it floating around." Even some supplies of material imported from Asia have been snug, he added.Marking the marketsAmong end markets and resin categories, Moisson said that Jamplast's sales of bio-based products are 20 percent ahead of last year's pace and that it's also seen growth in 3D printing and blends and alloys. On the bioplastics side, Jamplast has worked with bioresin maker NatureWorks for more than 15 years.At Bamberger, Pignataro cited industrial blow molding as "a big area for us" and added that PE stretch film is also doing well. Many of Bamberger's customers have new capacity "up and running with more to come" in 2018.Ed Holland said no single market has stood out for his firm this year but that it's seen growth in several of its main end markets, including flexible packaging, rotational molding and automotive.Kevin Chase added that all areas have been strong for his firm, including automotive lightweighting. "Car builds are down, but companies are doing a better job of metal-to-plastic conversion," he said.At Conventus, Jorgensen said that his firm's sales were up in oil and gas, building and construction, health care and electrical. He added that Conventus was doing more work with engineering resins and high-performance materials such as polysulfone, polyphenylsulfone and polyetheretherketone in areas of metal replacement.High density polyethylene has provided growth at Osterman, according to Dever, with higher sales in caps and closures, consumer products and food packaging.General Polymers Thermoplastic Materials LLC of Clarkston, Mich., has been strong in automotive, industrial and appliance so far in 2018, CEO Greg Boston said.Health care, transportation and outdoor high-performance markets have led the way for PolyOne because of investments the firm has made in those areas, Horn said. In terms of materials, PolyOne is seeing good growth across both engineering and commodity portfolios with slightly stronger demand for olefinics, he added.Williams at Nexeo cited health care, general industrial, sports and leisure, building and construction and electronics as areas of strength in the first half. Potential new products for his firm include compounds and materials for wire and cable.Impact of taxes, tariffs▲ Ed HollandAlthough many distribution execs said it was too soon to measure the full impact of changes in U.S. tax policy and of potential tariffs on imported goods, they already were seeing effects in some areas."The tax change should be generally positive for most manufacturers," said John at PolySource. "Tariffs had been more manageable and more expected, but now we might see some surprises that lead us to change our strategy."At General Polymers, Boston said that the tax changes should impact distribution in a positive way because of "overall support for business from the government."Mike Kirtley, president and chief operating officer for General Polymers, said tariffs could impact companies on the steel side, possibly leading them to look at existing buildings rather than build new ones.The tax situation is helping Osterman's customers buy new equipment, according to Dever, but he said the new tariffs might lead the firm to do more volume in Central and South America instead of Asia.Kevin Chase was bullish on the tax cuts, saying they've allowed his firm to double its 401k match to employees and to give raises and bonuses as well."Any time you can take money out of the hands of the government and put it into the hands of free enterprise, that's a good thing," Chase said. "We're seeing a Trump bump out there."M. Holland's customers are also buying new equipment, Ed Holland said, but he added that the tariffs "have multiple issues and none of them are good.""They've created uncertainty about investing in business," Ed Holland said. "Steel affects auto and supply chains — 20 percent of the cost of a new plant is steel. And our company and many others have worked to set up business with Canada and Mexico."Changes on the tax side are also helping Jamplast's customers."After going through the recession and then being so cautious and conservative, we're finally seeing good optimism and expansion with people buying new machines," Moisson said.Tariffs might challenge traditional areas but could help Jamplast's sales on the bioplastics side, he added. Moisson said that point was driven home recently when he and his wife were offered paper straws instead of plastic ones at a local restaurant.Look to the horizonMost distribution execs expect to see solid results for the rest of 2018. Many firms are addressing the future of the industry, even if they're doing so in different ways."I think one of the long-term trends we'll see is big petrochemical firms aligning with big distributors," said Moisson at Jamplast. "Then there will be a second tier [of distributors] aligned with smaller niche-type materials like bio-based resins or elastomers or acrylics to help rep smaller [material] suppliers that don't get attention from larger distributors."At Bamberger, Pignataro said his firm won't be affected by being recently acquired by Plastiche SA, a Luxembourg firm controlled by the same family that controls materials giant Ravago Group. Ravago's businesses include resin distribution."We're still a separate entity with our own sales and management and financing," he said. "There's no intention to change what's worked. We're all excited about the future of industry with the addition of branded distribution partners."M. Holland might look to add more compounders to its line card, Ed Holland said, and to find ways to benefit from exclusive distribution deals, such as the one it has in the United States for nylon-based materials made by Teknor Apex Co. of Pawtucket, R.I.He added that consolidation among the customer base has also been a challenge, with several customers now buying directly from resin makers. At the same time, Ed Holland said, M. Holland "always is looking" look to add to its line card through acquisitions or new suppliers.Conventus plans to "aggressively expand our product line for specialty products with our good value proposition," Jorgensen said. The firm has also added two sales reps in the last year and intends to add one or two more by the end of 2018.Relationships are also a driver at Osterman."This is a relationship business," Dever said. "When my career is over, I want to look back and be proud that we've provided service while being competitive."He added that Osterman is now working with its seventh sales training class. The firm has hired more than 30 sales reps from its first six classes.General Polymers recently moved into a new, larger office space and plans to add four or five new sales reps this year, according to Kirtley. The firm has also had its materials approved by several new customers.PolySource plans to hire two or three more sales reps this year and is looking for new materials to grow its geographic reach."We continue to talk to new suppliers to find more materials that fit into our mission," John said.Nexeo is facing inflationary costs on lumber, pallets, cardboard, steel drums and pails, but it still expects "steady growth" for the rest of the year, according to Williams. The firm plans to build "a more robust online presence" and is providing more access to shipping data and real-time inventory information to its sellers.The image of plastics remains important to PolyOne, especially in light of recent challenges to single-use plastics and concerns over ocean plastic waste."Plastics are extremely valuable materials making important contributions in every industry," PolyOne's Horn said in an email. "Further unlocking that value with more effective, universal recycling and awareness programs will entail collaboration among industry, consumers and infrastructure globally."Customer relations also remain a big area of focus for Chase and other distributors."You have to constantly drive value," Kevin Chase said. "I don't care if you're selling to your sister-in-law. Great companies are good at delivering value services."Resin distributors see tightness in some materials, but report steady growth.

Aeyoung Park 2018-09-03

Who are the top manufacturers in the Chines plastics machinery industry in 2018?

Who are the top manufacturers in the Chines plastics machinery industry in 2018?China Plastics Machinery Industry Association (CPMIA) has announced the results of “China's most competitive plastic machinery enterprises 2018”. The rankings were based on the financial reports of 2017 submitted by the enterprises, which were audited by different related departments of the Association.For the “Top 30 Comprehensive Strength Enterprises of China Plastics Machinery Manufacturing Industry in 2018” lists by main business income and net profit, HAITIAN (海天) was ranked No.1, followed by YIZUMI (伊之密) and JWELL (金纬).Meanwhile, HAITIAN was also ranked No.1 on the list “Top 15 Enterprises of China Plastics Injection Molding Machinery Industry in 2018 by main business income and net profit. By main business income, CHEN HSONG (震雄) and YIZUMI were ranked No.2 and No.3 respectively. While by net profit, YIZUMI was ranked No.2 and CHEN HSONG was ranked No.3.For extrusion machinery, JWELL and TONGJIA (通佳) were the top two manufacturers in China by both main business income and net profit. JINMING (金明) and BEIER (贝尔) were ranked No.3 by main business income and net profit respectively.For blow molding machinery, TONGDA (同大) was the No.1 manufacturer in China, according to the list by CPMIA. Besides, TECHMATION (弦讯)）was the top auxiliary equipment and accessories manufacturer. According to the statistics of CPMIA, the total industrial production value and industrial sales value in 2017 for the 38 listed enterprises increased 30.1% and 29.9% when compared to the previous year. For the main business income and total profit, an increase of 25.8% and 30.8% were recorded respectively.Top 30 Comprehensive Strength Enterprises of China Plastics Machinery Manufacturing Industry in 2018 (Sorted by Main Business Income)Top 30 Comprehensive Strength Enterprises of China Plastics Machinery Manufacturing Industry in 2018(Sorted by Net Profit)Top 15 Enterprises of China Plastics Injection Molding Machinery Industry in 2018Top 10 Enterprises of ChinaPlastics Extrusion Molding Machinery Industry in 2018Top 3 Enterprises of ChinaPlastics Blow Molding Machinery Industry in 2018Top 5 Enterprises of ChinaPlastics Auxiliary Equipment and Accessories Industry in 2018Source: CPRJ International

Aeyoung Park 2018-09-03

Machinery production in China to rise at a CAGR of 7.5%

- Machinery production in China to rise at a CAGR of 7.5%▲ Total China machinery production revenues and growth rates from 2017 to 2022(exclusing PV and solar).Even with strong 8.1% year-over-year growth, China's machinery production is growing at a slightly slower rate in 2018 than that it did in 2017, according to the recent study by IHS Markit. Machinery production in China will continue to rise at a compound annual growth rate (CAGR) of 7.5% from 2018 to 2022.In the first half of 2018, the performance of machinery industry segments in China suffered mixed fortunes. While robots and other high-end equipment-manufacturing machinery maintained high growth rates, some traditional manufacturing-related machinery – such as agricultural machinery, paper and paperboard machinery – have different market growth expectations, due to their differing market and policy environments.As “Smart Manufacturing 2025” continues to advance, while demographic dividends disappear, labor costs increase, and machine generation accelerates, the demand for industrial robots in China has increased dramatically.According to the latest data from the International Federation of Robotics (IFR), the annual sales volume of industrial robots in China ranked first in the world for five consecutive years from 2013 to 2017. IHS Markit predicted that industrial robot production will continue to grow at 38% through 2018.Overall prospectAlthough China's machinery production growth performance was stable in the first half of 2018, there are still some unfavorable factors expected in the second half of the year, due to downward pressures on the machinery and equipment market, including the following:With Sino-US and other trade frictions on the rise, there is still a lot of uncertainty in the international environment.The infrastructure investment and consumption growth rate is declining, and the underlying economic driving force is insufficient to spur additional growth.The tightening of environmental protection policies, along with the uncertainties of industrial policy adjustment, will have varying negative short-term effects on the development of related industries. The strict supervision of environmental protection will also have negative short-term effects on the paper, printing, dyeing and other polluting industries.Source: CPRJ International

Aeyoung Park 2018-08-29

PS, PET bottle resin prices move in July

- PS, PET bottle resin prices move in JulyThe lazy days of summer proved lazy indeed for North American commodity resin prices in July, as only solid polystyrene and PET bottle resin showed any change from the previous month.For PS, a decline of 3 cents per pound occurred as prices for benzene feedstock — used to make styrene monomer — dipped 15 cents to $2.84 per gallon. That move represents a 5 percent decline vs. benzene prices for June.Regional PS prices had been flat in June after falling 4 cents per pound in May. Counting previous increases and decreases, PS prices now are down a net of 1 cent per pound for the year.North American PS sales slumped 5.5 percent in the first half of 2018. A domestic sales loss of just over 6 percent was lessened by a 19 percent surge in export sales. PS sales to resellers and distributors grew almost 10 percent in that six-month period.PET bottle resin prices declined by an average of 2 cents per pound in July after having increased 3 cents in June and 2 cents in May. Lower demand was cited as a reason for the July dip.Scattered production issues and tighter supplies of feedstocks could make regional PET markets tighter in August and September, sources said. This change could lead to flat pricing or even give regional PET makers a chance to raise prices, they added.Average North American market prices for all grades of polyethylene, polypropylene and PVC were flat in July. High and low density PE prices now have been flat for four straight months, with linear LDPE prices now flat for two months in a row after sliding 3 cents in May.In spite of a flat market, the impacts of large new amounts of HDPE and LLDPE capacity are being felt in regional demand. U.S./Canadian sales of HDPE jumped 8.8 percent in the first half of 2018, according to the American Chemistry Council, with LLDPE sales booming 16.3 percent. Exports played a big role in this growth, with LLDPE exports up an astonishing 60.2 percent and HDPE exports leaping 18.9 percent.Domestic market growth for those materials also exceeded that of U.S. GDP. HDPE sales into the domestic market were up 6.5 percent in the first half, with domestic LLDPE sales up 4 percent.Sales of LDPE — where less new capacity has been added — ticked up 0.9 percent for the half, as a 0.4 percent export loss weakened domestic growth of 1.4 percent. LDPE's nonpackaging film end market — including retail bags and trash and can liners — grew 7 percent.Regional PP prices took a rare break in July after surging 8 cents per pound in June after moving up 7 cents in May. That followed a two-month period in March-April when prices slipped a total of 7 cents.PP prices in the region now are up a net of 11 cents per pound for the year. Total price volatility for the material — including all increase and decreases — has reached 40 cents per pound.For PP, North American sales dipped 0.5 percent. A 23.8 percent decline in export sales countered a gain of 0.2 percent in the domestic market. Among major end markets, sales of PP into oriented film were up 17 percent and into injection molded caps and closures were up 7 percent.Regional suspension PVC prices were flat for the third straight month in July after moving down an average of 2 cents in April. First-half U.S./Canadian PVC growth of 5.5 percent was powered by export growth of 17 percent.Sales of PVC into the domestic market ticked up 0.6 percent. Among major end markets, PVC sales into extruded windows and doors surged upward by 31 percent in the first half.Recycled resin changesPlastics News also recently showed pricing changes for several recycled materials. In PET bottle resin, average selling prices for clear, post-consumer pellets and flake are both up 5 cents per pound since April. Prices for green, post-consumer PET flake and pellets are also up 5 cents in the same time period. These materials have been in higher demand as manufacturers work to meet sustainability goals."Demand for [recycled PET] pellet from bottle and packaging manufacturers continues to rise due to call to increase recycled plastics in plastic bottles, other containers and packaging," according to a recent report from the PetroChem Wire LLC consulting firm in Houston.For recycled HDPE, prices for multicolored, post-consumer flake are down 5 cents per pound since April. In recycled polypropylene, prices for industrial flake are down 4 cents per pound in that same time period. Both moves are the result of decreased domestic demand and increased supplies resulting from lower exports of recycled material to Asia.At the macro-feedstock level, U.S. prices for West Texas Intermediate crude oil slipped from $71.50 per barrel at the start of July to $67.75 by the end of the month for a decline of 5 percent. U.S. natural gas prices also slid, starting July at $2.85 per million British thermal units, but bouncing around before finishing near $2.75 by the end of the month for a decline of 3.5 percent.

Aeyoung Park 2018-08-29

HDPE, LLDPE drive first-half gains in U.S./Canadian resin sales

HDPE, LLDPE drive first-half gains in U.S./Canadian resin salesThe impact of new North American polyethylene resin capacity began to be felt in sales totals for the first half of 2018, with both high and linear low density PE posting big gains.U.S./Canadian sales of HDPE jumped 8.8 percent in that six-month period, according to the American Chemistry Council, with LLDPE sales booming 16.3 percent. Exports played a big role in this growth, with LLDPE exports up an astonishing 60.2 percent and HDPE exports leaping 18.9 percent.Domestic market growth for those materials also exceeded that of U.S. GDP. HDPE sales into the domestic market were up 6.5 percent in the first half, with domestic LLDPE sales up 4 percent.Among major HDPE markets, sales into gas pipe were up 23 percent, with water pipe up 16 percent for the half. In end markets for LLDPE, sales of the material into shipping sacks were up 10 percent.North America has added more than 6 billion pounds of annual PE production capacity since mid-2016 through major expansions from Nova Chemicals Corp., Dow Chemical Co., ExxonMobil Chemical Co. and Chevron Phillips Chemical. In total, North American PE production capacity is expected to add 26 billion pounds between 2017 and 2022.The discovery of newfound supplies of shale-based natural gas in the region in the last decade have made these expansions possible. Most of this new capacity has been in the form of HDPE and LLDPE.U.S. PE exports "can ramp up very quickly when world crude oil prices rise as they did in the first half of 2018 compared to the same months in 2017," said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis."Crude oil prices were up over 30 percent year over year, while U.S. natural gas prices were mostly down during the same time period," he added. "As a result, many foreign PE buyers found U.S. PE prices attractive, while U.S. PE producers had less reason to lower domestic prices, even in the face of new production capacity."Esteban Sagel, principal of the Chemical & Polymer Market Consultants consulting firm in Houston, said that "looking at PE, the domestic growth rates would be reflective of a strong domestic market, which I believe is the case.""The economy is improving, employment is up and confidence is high," he added. "Growth in pipe in HDPE is understandable, as we work in a lot of shale-related infrastructure."Harvey hits pricingIn PE pricing, strong demand and the unexpected prolonged effects of Hurricane Harvey into the spring supported higher post-hurricane price increases, according to Mike Burns, PE market analyst with Resin Technology Inc. in Fort Worth, Texas."Resin processors who expected Q1 discounts were surprised when prices increased in February and have lasted for the most part into the summer," Burns said.Burns added that with hurricane-related supply issues resolved and new capacity running at better rates, suppliers will have to rely heavily on a strong export market in the second half of 2018."Exports may need to increase as much as 10 percent over the three-year average of 20 percent to maintain a balanced North American supply," he said. "And recent tariffs talks may disrupt the flow of exports until the direction is certain."An abundant supply of PE "is contributing to U.S. resin export growth in particular," according to Paul Bjacek, market analyst with the Accenture Research in Houston. "This will pull up [LLDPE] shipping sacks as well, as plastics are typically packed in shipping sacks for loading into overseas containers."First-half sales for other commodity resins represented a mixed bag. PVC sales posted solid gains, while sales of LDPE and polypropylene essentially were flat and sales of solid polystyrene declined.U.S./Canadian PVC growth of 5.5 percent was powered by export growth of 17 percent. Sales of the material into the domestic market ticked up 0.6 percent. Among major end markets, sales of PVC into extruded windows and doors surged upward by 31 percent in the first half.Construction growthThe PVC market "is, has been and will continue to be driven by various housing market applications such as vinyl siding, windows and drain and waste pipe," Mathelin Bay's Karig said. U.S. housing starts "were strongly up year over year through May, and though they were down in June, there was more than enough momentum to keep U.S. PVC sales strong during the first half of 2018."PVC export sales "also benefited from low-cost natural gas, making U.S. producers competitive in the world market, as well as from continued growth in the global economy, including housing," he added. "Looking forward, the big question marks are whether tariff spats and elevated oil prices will cause global growth rates to begin to cool."Construction has been performing relatively better than manufacturing in the first half, Accenture's Bjacek said, with overall construction spending rising 5 percent. This trend should help explain the strong performance of PVC in construction applications, he added.LDPE sales ticked up 0.9 percent for the half, as a 0.4 percent export loss weakened domestic growth of 1.4 percent. The nonpackaging film end market, including retail bags and trash and can liners, grew 7 percent.For PP, North American sales dipped 0.5 percent. A 23.8 percent decline in export sales countered a gain of 0.2 percent in the domestic market. Among major end markets, sales of PP into oriented film were up 17 percent and into injection molded caps and closures were up 7 percent.Karig said that the PP market "was very much a mirror image of the PE market in the first half of 2018 as it has been for most of the last few years."PP producers "found themselves suffering from elevated feedstock costs and limited feedstock supply," he explained, "while foreign producers stand ready to ship PP to the U.S. whenever U.S. producers attempt to recover their cost increases or try to increase their margins."PS slidesU.S./Canadian solid PS sales had a very difficult first half, with overall sales sliding 5.5 percent. Export growth of 19 percent allowed for a slight improvement on a domestic sales slump of 6.1 percent. Sales of solid PS to resellers and distributors provided a bright spot by growing 10 percent for the half.The resin statistics also reflect a 4.9 percent first-half increase in consumption of nondurable goods, which "tend to do relatively well throughout economic cycles," according to Bjacek.However, he added, the weaker performance of PP and PS is likely related to their greater share of demand in durable goods, which rose slightly less — 4.6 percent — during that time. U.S. auto production is a notable area of weakness, Bjacek said, declining by 13 percent in this period and likely contributing to weaker PP sales.Commenting on overall resin sales in the region, Bjacek said that strong resin sales data is linked primarily to robust economic growth, with U.S. real GDP rising over 4.1 percent in the second quarter. In addition, he added, growth is contributing to stronger world demand, as U.S. GDP accounts for more than one-fifth of world GDP.But "a key risk," according to Bjacek, is the lack of consistently strong durable goods production. "Consumers buy less durable goods when there is uncertainty," he said. "Any declines there can signal the beginnings of a downturn. Producers should watch durable figures and be actively pursuing stronger growth applications, as well as financially strong customers, to protect themselves in a downturn."

Aeyoung Park 2018-08-22

Taiwan plastics firms see gains in China-US trade war

Taiwanese equipment makers are capitalizing on the emerging U.S.-China trade spat, but may be hurt if the disagreement lingers, executives said on the first day of Taipei Plas."Taiwan is actually the beneficiary of this trade war, because if the U.S. increases the tariff on machinery imported from China, it means Taiwan machinery is going to be even cheaper [for U.S. buyers]," said Larry Wei, president of extrusion machine maker Fong Kee International Machinery Co. Ltd. and a board member of the Taiwan Association of Machinery Industry."Starting last year, we saw more and more Taiwanese machinery sold to the U.S. market," Wei said, with his firm seeing a 20-plus-percent jump in sales to the United States.Larry Wei, president Fong Kee InternationalMachinery Co. Ltd. and board member of Taiwan Association of Machinery IndustryIn the short term, the combination of 25 percent U.S. tariffs on Chinese plastics equipment, which started July 6, and the favorable business reaction to President Donald Trump's policies are fueling stateside demand for Taiwanese production equipment, said Alan Wang, chairman of TAMI's plastic and rubber machinery committee."Our machinery sales to the United States actually have increased," he said.But executives fretted over longer-term impacts if the trade war dampens demand for new equipment, particularly in China, which is Taiwan's largest export market for plastics equipment.Wang noted that the mainland purchasing managers' index, a leading reflection of corporate confidence, took an ominous dip in May and June."[In] the long term, we think that [the trade dispute] might affect the willingness to invest," he said. Last year, Taiwan supplied almost five times as much plastics equipment to China as it did to the United States, TAMI said.In the plastics world, Taiwan definitely punches above its weight. The small island with a population the size of Texas is the world's sixth-biggest exporter of plastics machinery, ranking behind only Germany, China, Japan, Italy and the United States.Exports of Taiwanese plastics and rubber machinery jumped 12.8 percent last year to $1.17 billion, said TAMI Chairman Alex Ko.Sales to mainland China grew a healthy 27 percent to $247.61 million, accounting for 21 percent of Taiwanese plastics machinery exports.Taiwan has a strong focus on Asian developing markets. Sales to its second-biggest export market, Vietnam, edged up 2.3 percent to $139.5 million, followed by India, up 44 percent to $91.69 million.Sales continued to grow in the first five months of this year, Ko said. China and Hong Kong imported $97.93 million in Taiwanese machinery, up 2.3 percent from the year-before period, followed by Indonesia and Thailand. But sales to India have dropped a sharp 24.8 percent.Still, TAMI President Cheng-Ching Wang called on the industry to make a more concentrated effort to penetrate markets in the Middle East, Africa, South America and Eastern and Central Europe. Altogether, they represent less than 10 percent of Taiwan's exports, Wang said.The candid trade-war assessments weren't the only geopolitical notes to creep into the usually apolitical trade-show talk.Michael Wang, general manager of Chen Hsong Machinery Taiwan Co. Ltd. and vice chair of TAMI's plastic and rubber machinery committee, said his firm's once-thriving sales to Iran have vanished in the wake of the Trump administration's re-imposition of sanctions on Iran.The trade show, which says it's Asia's third-largest plastics show behind Chinaplas and Japan's IPF, also will include a focus on beefing up Taiwan's Industry 4.0 next-generation manufacturing capabilities, executives said, although they acknowledged more research needs to be done locally."Take my company, Fong Kee, for example. Most of our sensors for our blow molding machines are imported," Wei said. "This is an area where we really need to catch up."But executives noted some progress in making servo motors, a key component for all-electric injection molding machines. Taiwan now has two domestic manufacturers that can compete with foreign offerings."The situation has greatly improved compared to the last Taipei Plas [in 2016]," Alan Wang said.Another highlight: stronger collaborations among the government, universities and companies to train engineers needed for the new world of smart manufacturing, said Bush Hsieh, managing director of Taichung-based blow molding machine maker Chumpower Machinery Corp. and a vice chair of TAMI's plastic and rubber machinery committee.Chumpower has already worked with students on government-sponsored Industry 4.0 projects twice. "The [key performance indicator] will be whether these students are recruited," Hsieh said.Thomas Huang, executive director exhibitiondepartment, Taiwan External Trade Develop-ment CouncilExecutives said plastics pollution is a particular concern in Taiwan, which has some of the strictest recycling laws in the world. Executives talked up savings on the production end, as electric injection molding machine use less energy than hydraulics and don't leak oil.But much more research needs to be done on the recycling end, which is still too reliant on manual labor, they said."Separating PET caps and bottles must be fully automated," said Alan Wang. "Recycling technology needs to be upgraded."Thomas Huang, executive director of the exhibition department of the Taiwan External Trade Development Council, called on resin makers to "focus on developing [formulas] so that the material can be better recycled and reused."Taipei Plas runs through Aug. 19. Show organizers anticipate 18,800 visitors from around the world.

Aeyoung Park 2018-08-20

US-China trade war: 5 suggestions from the Chinese plastics processing industry

The escalating US-China trade war is hitting the plastics industry of both countries. From the reliable sources of CPRJ, we've learned that some leading manufacturers and OEMs in China have already been suffering from the economic turmoil.“Our customers from the US have stopped ordering from us,” the director of a leading Chinese manufacturer of plastic films and garbage bags told CPRJ.“Our collaboration project with the US has been halted. As soon as the US waged a trade war against China, we suspended the project, as we don't know who will pay the extra 25% tariff,” said a Chinese auxiliary equipment supplier.In order to manage the crisis and minimize the damage of the US-China trade war, the Chinese plastics processing industry has suggested five measures.1. Tax exemption“The number of plastics processing machines exported to the US from China has increased by 84% in 2017 when compared with the previous year, and the value has increased by 47%. With the extra tariffs, Chinese machines would lose its advantage in price,” commented Su Dongping, Secretary-General of China Plastics Machinery Industry Association.However, the impact on Chinese machine builders is still manageable, she said. “For example, the US market accounts for only 4 - 10% of the total turnover of some leading Chinese manufacturers like Haitian (海天), Yizumi (伊之密) and Borche (博创).”She suggested the Chinese enterprises should request for exclusion via the Product Exclusion Process for Chinese Products Subject to Section 301 Tariffs released by the Office of the U.S. Trade Representative (USTR).2. Call for subsidiesWang Wenguang, Secretary General of Shenzhen Polymer Industry Association, told CPRJ that some member enterprises are expecting subsidies from the Chinese government to alleviate their plight.3. Tax cut to increase domestic demand in China“If the Chinese government is able to cut corporate value-added tax and personal income tax, enterprises will have more resources for research and development, and people will have more consumption power,” a plastics industry player commented. “In that case, we will have a stronger driving force for innovation and domestic demand.”4. Increase overseas investmentInvesting in new production facilities overseas is another solution. CPRJ has learned that a big Chinese plastic tableware manufacturer is planning to expand its production capacity in the US. Another plastics processing enterprise also said that it will consider producing in other countries in Southeast Asia.5. Boost innovationThe US is levying the extra tariffs against Chinese products that are relatively easy to find substitutes in the market. As long as Chinese products are of higher innovation, technology and quality, they will not be so easily replaced or subject to tariff threats.In 2017, China exported US$15 billion worth of plastic products to the US, representing 23.97% of the total export of plastic products. The US is the biggest export market for Chinese plastics processing machinery in the same year, accounting for 10.89% of the total, with a value of US$244 million.Source: CPRJ International

Aeyoung Park 2018-08-20

A new wave of growth for 3D printing

The 3D printing market is emerging from niche market and expected to grow at a swift pace. In light of the huge business opportunities, some notorious companies have started to boost their presence in the market. 3D printing market is hot and getting hotter! 3D printing, also known as additive manufacturing, promises a range of potential benefits and innovation opportunities, offering major advantages such as shorter lead time, design freedom, and lower costs. Thanks to rapid technological developments facilitating wider applications, it is creating more interest among mainstream industries.Worldwide spending on 3D printing is set to growThe global spending on 3D printing (including hardware, materials, software, and services) will be nearly US$12.0 billion in 2018, an increase of 19.9% over 2017, according to the new update to the Worldwide Semiannual 3D Printing Spending Guide from International Data Corporation (IDC). By 2021, IDC expects worldwide spending to be nearly US$20.0 billion with a five-year compound annual growth rate (CAGR) of 20.5%. Together, 3D printers and materials will account for roughly two thirds of the worldwide spending total throughout the forecast, reaching $6.9 billion and $6.7 billion respectively in 2021.Services spending will trail slightly behind, reaching US $5.5 billion in 2021 and led by on-demand parts services and systems integration services. Purchases of 3D printing software will grow more slowly than the overall market with a five-year CAGR of 18.6%. According to the report, the US will be the region with the largest spending total in 2018 (US$4.1 billion) followed by Western Europe (US$3.5 billion). Together, these two regions will provide nearly two thirds of all 3D printing spending throughout the forecast. On the other hand, China will be the third largest region with more than US$1.5 billion in spending this year, followed by Central and Eastern Europe (CEE), the Middle East and Africa (MEA), and the rest of Asia/Pacific (excluding Japan).Discrete and healthcare manufacturers to be prevailing spendersThe 3D printing industry recently has witnessed a shift to more specialized applications with printer manufacturers targeting engineering groups directly linked to specific applications. As stated in the report from IDC, discrete manufacturing will be the dominant industry for 3D printing, delivering more than half of all worldwide spending throughout the 2017-2021 forecast. Healthcare providers will be the second largest industry with a spending total of nearly US$1.3 billion in 2018.Parts for new products, aftermarket parts, dental and medical support objects will continue to see significant growth opportunities over the next five years as 3D printing goes more mainstream. The healthcare industry is also poised to double its share of spend through 2021 as the benefits of cost-effective customized printing continue to be realized, according to Marianne D'Aquila, research manager, Customer Insights and Analysis at IDC.The leading use cases for 3D printing are prototypes, aftermarket parts, and parts for new products. As the primary use cases for the discrete manufacturing industry, these three use cases will account for 44% of worldwide spending in 2018. By 2021, dental objects and medical support objects will be the fourth and fifth largest use cases, largely driven by the healthcare provider industry. The two use cases that will see the fastest spending growth are tissue/organ/bone (56.6% CAGR) and dental objects (36.9% CAGR), which will also be driven by healthcare provider spending.Latest partnerships and investments for further developmentIn April, both leading materials suppliers Royal DSM and Covestro announced their new partnerships for further development in the 3D printing market. Royal DSM will partner with Chromatic 3D Materials to introduce thermoset materials for 3D-printing of finished manufactured goods. Chromatic 3D is one of the few companies that know how to develop technologies to 3D-print with thermosets, a broad class of materials offering adaptability, durability and resilience not possible with thermoplastics used in conventional 3D printing processes. Initial products to be rolled out by DSM include industrial-grade soft and durable thermosets, which are complementary to DSM’s current portfolio of thermoplastics for fused filament fabrication (FFF). Starting immediately, the companies will build a broader portfolio based on customer needs in the strategic markets of footwear (in- and midsoles), transportation (such as in the growing area of automotive electronics), healthcare, electronics and tooling.Material development is moving in a similar direction as both printer and material manufacturers create the perfect conditions for the reliability and repeatability demanded by industrial users. This means that more specific data and process knowledge is needed to drive 3D printing into mainstream manufacturing. Covestro and its partner Polymaker launched a website, namely 3DPC (www.3dprintingpc.com), designed to aid the use of polycarbonate in 3D printing. The information platform offers know-how on 3D printing with polycarbonates - from material options to printing conditions. 3DPC demonstrates the optimal printing and processing techniques to further penetrate polycarbonate into new industries and dynamic applications.Three months earlier, Siemensannounced the plan to make a €30 million investment in a new, state-of-the-art manufacturing facility for Materials Solutions Ltd., its additive manufacturing (3D printing) specialist.The new building in Worcester, UK, set to open in September this year, will more than double the company's current footprint, enabling it to increase its fleet of 3D-printing machines to 50.This major investment is part of Siemens' plans to build and grow a global business with additivemanufacturing services for the aerospace, automotive and other industries.The new factory will be fully powered by Siemens Digital Enterprise solutions, an end-to-end portfolio comprising software-based systems and automation components which cover every conceivable requirement arising along the industrial value chain. It will therefore harness the potential of digitalization. Siemens is leading not only as a user of 3D printing but also as a supplier of software and solutions for the automation of this technology. With Materials Solutions, the company also offers comprehensive services for engineering and printing up to the complete manufacturing of parts for external customers.In order to uplift its capability in developing and testing solutions for customers, BASF has established two 3D printing labs at the BASF Innovation Campus Shanghai, China, along with its 3D Printing Application Technology Center in Heidelberg, Germany.BASF also launched a wide range of industrial 3D printing solutions in Asia Pacific to satisfy the growing demand in the region in early 2018. These new solutions can help vastly accelerate development cycles by enabling the production of complex parts and allow individual designs, while reducing costs for small scale production.Advanced products on stage in major exhibitionsThe 3D printing market is poised to expand further and this trend was also very much in evidence at some recent major exhibitions, included CHINAPLAS in Shanghai, China and NPE in Orlando, the US. Some material suppliers highlighted their advanced solutions at these shows.With the 3D-printed surf board and 3D-printed shoe soles, the LEHVOSS Group put the spotlight on its innovative and customized polymers for 3D printing at CHINAPLAS 2018.Under the trade name LUVOCOM 3F, the surf board is made from customized 3D printing materials that based on thermoplastic polymers, such as high performance polyamides and PEEK. The materials are modified to yield improved layer strength with no warping of the printed parts. The 3D-printed shoe soles are made from LUVOSINT TPU X92A-2, a special material for laser sintering. Laser sintering is a technique for the additive production of plastic components. The layered structure offers a level of design freedom, as well as engineering opportunities that cannot be achieved with injection molding and other techniques.At NPE 2018, SABICintroduced three new FDM 3D printing filaments. The materials were designed for general high-temperature and healthcare applications.The launch of additional filament products, together with plans to continue expanding its additive manufacturing product portfolio, demonstrating SABIC’s determination to further the evolution of this technology and enable application innovation. Having only entered the additive manufacturing industry in the spring of 2017, the three new products represent the third wave of 3D printing materials the chemicals specialist has brought to market.Source: CPRJ International

Aeyoung Park 2018-08-08