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CPRJ survey finds Chinese plastics industry optimistic about post-pandemic market recovery

CPRJ survey finds Chinese plastics industry optimistic about post-pandemic market recoveryThe coronavirus pandemic is hitting the global economy. To what extent it is affecting the Chinese plastics industry and its future outlook? A survey conducted by AdsaleCPRJ.com to find out the situations has received valid feedback from 355 respondents between February 21 and March 5. It was found that most of the respondents expected this year's turnover to be flat or down from last year for their companies. However, over 70% of them said they are optimistic about the future. Meanwhile, more than 30% said they will strengthen their online marketing tools as a way to improve their business.More than 70% of the respondents are optimistic that the market will return to normal in the next six to 12 months. Industry and firm size of the respondents Most of the respondents from the upstream sector come from chemicals and raw materials industries (23.38%), followed by machinery and equipment industries (11.27%). The respondents from the downstream sector come from automotive, packaging, and consumer electronics/home appliance industries (about 15% each), medical industry (7.61%), as well as construction/infrastructure and testing services industries. In terms of firm size, the number of employees of the respondents' companies ranges from fewer than 50 to more than 500. Among them, 26.20% come from companies with more than 500 employees, and 24.79% come from companies with 101-300 employees. The respondents come from companies with fewer than 50 employees and 301-500 employees accounted for about 19.44% and 10% respectively. In addition, 20.85% of the respondents said the products of their companies are all for domestic sales in China, 38.31% said their products are mainly for domestic sales, 21.69% said their products are equally for domestic and overseas sales while 10.7% said their products are mainly for overseas markets. For those who said their products are all for export accounted for only 8.45%. About 40% of the respondents’ companies have resumed production Regarding the current production and operation status, as of the end of the survey, 39.35% of the respondents said their companies has resumed normal production, 23.94% said part of the production has been restarted while 13.18% said their companies have increased production output. Besides, 7.10% said their companies have halted production. About 20% of the respondents considered “fixed expenditure” as the main problem they are facing after operation was postponed, while some said “rising raw material prices” and “rising logistics costs” were their main difficulties (about 15% each). 16.63% said the main problem was a lack of workers and 13.4% said a decrease in market demand has affected them most.. Automotive industry most negatively affected At a recent press conference of the State Council Information Office of China, the authorities said the coronavirus outbreak has an impact on China's economic operation in the short term. They also remarked that labor-intensive industries, as well as industries that heavily rely on a supply chain, such as electronics and automotive industries, will be particularly affected in the short term. In the CPRJ survey, respondents were asked to choose an industry which they thought would be most affected by the pandemic. 23.42% of respondents believed that the automotive industry would be hit hardest, while 17.82% and 16.51% thought the construction industry and the FMCG packaging industry respectively would suffer most. Other industries are home appliances (13.91%), consumer electronics (12.48%) and infrastructure (9.36%)23.42% of respondents believed that the automotive industry would be hit hardest.The four major impacts of the pandemic on the overseas markets include: declined import by China, resulting in a market slump (22.69%); a disrupted global supply chain (21.45%); price fluctuation of some raw materials (21.09%) and some products missing the sales season (20.96%). Medical and healthcare sectors expected to grow When asked to predict the post-pandemic market situation, 21.13% of respondents anticipated growth in the home medical devices sector. Home healthcare appliances, medical and healthcare products, as well as consumer electronics sectors were also considered to have good growth potential. (Refers to the diagram below) Turnover expected to be flat or down this year In terms of companies’ turnover, only about 10% of the respondents expected an increase for this year. More than 70% forecast a decrease. Among them, most predicted a decrease of 10%-20%. Meanwhile, 14.93% of the respondents anticipated that the turnover will be flat.In terms of companies’ turnover, only about 10% of the respondents expected an increase for this year.Strengthening online marketing tools a popular solution In order to counteract the negative effects, 34.18% of respondents said they will strengthen their online marketing tools, compared with 21.4% who said they will look for financing channels. Other respondents said they will adopt cross-industry business model (14.12%), reduce product prices (12.63%) and resort to layoffs or pay cuts (11.29%). Besides, about 27% of respondents hope to receive tax relief or subsidies from the govenrment, while about 20% look for more financing services. About 14% wish to expand their businesses through online webinars/online classrooms/live broadcasts. Only about 5% of the respondents chose to develop their businesses through offline business meetings. Over 70% of respondents expressed optimism Most importantly, more than 70% of the respondents are optimistic that the market will return to normal in the next six to 12 months, compared with 17.46% who are less optimistic. At a glance: AdsaleCPRJ.com conducted a survey to find out the impacts of the coronavirus outbreak on the Chinese plastics industry, and received valid feedback from 355 respondents from February 21 to March 5. 39.35% of respondents said their companies have resumed normal production while 21.46% said they are facing financial difficulties. About 90% of respondents expected their companies’ turnover to be flat or down this year. However, over 70% of respondents are optimistic that the market will return to normal in the next six to 12 months. Most of respondents (21.13%) expected the household medical devices sector to grow after the pandemic is over. 34.18% of respondents said they will strengthen online marketing tools for their businesses.Source：Adsale Plastics Network link : https://www.adsalecprj.com/en/news_show-68222.html

Editor 2020-04-01

Coronavirus updates: Geneva auto show canceled

editor 2020-03-01

Canadian auto suppliers pushed to US

Canadian auto suppliers pushed to USJohn IrwinAutomotive News CanadaAxiom Group Inc.Canadian auto suppliers say they are being pulled by the gravity of U.S. President Donald Trump’s protectionist policies. Government support, logistics and politics all played roles in an Ontario injection molder’s decision to open a $20-million plant in Toledo, Ohio.Canadian auto suppliers say they are being pulled by the gravity of U.S. President Donald Trump's protectionist policies.Government support, logistics and politics all played roles in an Ontario injection molder's decision to open a $20-million plant in Toledo, Ohio, rather than expand in the province, and it's not alone in feeling the heat to invest south of the border.Axiom Group Inc., based in Aurora near Toronto, said in November that it planned to open its first U.S. manufacturing operation in an Ohio industrial park, building plastic injection-molded parts for Jeep models assembled at plants in Michigan. The company, whose major customers include Fiat Chrysler, Volkswagen and Tesla, has cited incentives, logistics and U.S. economic and trade policies as reasons for the move."We're already in Ontario and Mexico, and we were getting some pressure to have a presence in the United States," said Chris Moschopedis, Axiom vice-president of corporate strategy. Axiom employs 300 people, including 80 in Mexico.The adoption of just-in-time parts delivery is also at play. As automakers invest in the United States and Mexico they are likely to want suppliers nearby, meaning Canadian companies have to invest in the vicinity of new plants."Suppliers feel pressure to locate near where their customers are, and that's become a more important thing as [automakers] look at the entire value chain," said Julie Fream, CEO of the Original Equipment Suppliers Association, a U.S.-based auto supply group.Ontario has lost out on potential investments in recent years as companies are lured to invest south of the border. Jurisdictions in the United States and Mexico frequently have lower wages than those in Canada, while U.S. states are often eager to provide financial support, real estate and other incentives.In Ohio, Axiom is receiving "significant support," Moschopedis said. JobsOhio, a nonprofit that seeks to attract investment to the state, will prescreen people who apply for the 250 or so jobs at the plant, Moschopedis said."You don't have that kind of support in Ontario," he said.Just one new assembly plant has opened in Canada since 2000, while numerous new plants have landed in Mexico and the United States. And while automakers have invested in some of their existing Canadian operations, several factories have closed, including General Motors Co. plants in Quebec and Ontario and Ford Motor Co.'s facility in St. Thomas, Ont.Still, the federal and provincial governments have not been passive observers. Ottawa has doled out hundreds of millions of dollars in incentives to automakers' Canadian operations over the years. In early 2019, the Ontario government released its Driving Prosperity plan for the auto sector, including proposals to cut red tape and help suppliers modernize their manufacturing operations.Typically, the two levels of government cover up to a total of 20 per cent of an auto company's investment. For example, the federal and provincial governments combined to provide C$220 million (US$168.7 million) in incentives to Toyota's recent C$1.4-billion (US$1 billion) investment in its Canadian facilities, or about 16 per cent of the cost.U.S. states often go further. Toyota and Mazda will receive as much as US$700 million (C$925 million) in state and local incentives for their US$1.6 billion (C$2.1 billion) plant under construction in Alabama. Incentives, then, would cover about 44 per cent of total costs.Axiom's Moschopedis said the support offered by the provincial government pales to that offered south of the border and that applications can take years to fulfill."The government says it's open for business, but there is still a lot of red tape [in Ontario] and not a lot of incentives."But, auto analyst Dennis DesRosiers said some of the factors that have made Ontario seem less attractive to automakers and suppliers are out of the government's control, pointing to health care legislation in the United States as an example."We're less competitive than we used to be, and it's not necessarily because of lack of government aid," DesRosiers said.Moschopedis said Axiom chose to invest in Ohio, in part, as a way of "hedging our bets" on the new North American trade pact, which awaited ratification by the United States and Canada. It has passed both the U.S. House of Representatives and the U.S. Senate.President Donald Trump's protectionist trade leanings spurred the renegotiation of the North American Free Trade Agreement. The three countries agreed to modifications to the revised pact in December, paving the way for ratification.Political pressure from Washington can affect a company's decision to invest there, DesRosiers said. And that is especially true in an era when Trump has taken to Twitter to criticize a company's decision to invest outside of the United States, as he has since taking office in 2017."These companies are big multinationals," he said, "and whether we like the man or don't like the man, he's in a very powerful position sitting in Washington to cause these companies a lot of grief."As suppliers sort out their futures, Moschopedis urged the Ontario government to meet with as many business leaders as possible to determine whether manufacturing is a part of the province's economic future. "Once upon a time, Ontario was the manufacturing heart of Canada," he said. "Now it's become IT and other knowledge-based [sectors], and obviously that was a strategic decision."Source : https://www.plasticsnews.com/news/canadian-auto-suppliers-pushed-us edit : handler

Editor 2020-01-26

Samsung expanding EV battery plant in Hungary as EU probes state subsidy

Samsung expanding EV battery plant in Hungary as EU probes state subsidyHungarian Prime Minister Viktor Orban (2nd from left) visits Samsung SDI plant on completion in 2017Europe’s electric vehicle (EV) revolution is continuing apace as Asian battery manufacturers build up EV power pack capacity in recently launched or extended plants in the region. South Korean giant Samsung is now investing 1.16 billion euros in a project to expand the lithium-ion battery production plant it launched in May 2017 at the town of Göd in northern Hungary. Last year, the facility increased output to reach its current annual capacity, manufacturing enough batteries to power 50,000 electric vehicles.The latest project of the Seoul, S.Korea-based group’s batteries offshoot, Samsung SDI was formally announced in October by Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó. At a joint news conference, he confirmed the company expects to create a further 1,200 jobs at the 330,000 meters-square site in Göd.Samsung SDI Hungary director Woo-Chan Kim expressed his hope that the plant will become one of the largest in the world and stressed that the company is committed to further (local) expansion. However, the latest Samsung scheme has been got caught up in an EU investigation into whether Hungary’s 108 million euros in state subsidy towards the plant expansion breaches EU rules on regional state aid.The European Commission, which launched the “in-depth” probe last month, indicated that it has initial doubts that the award of grant aid meets all the criteria set by EU guidelines.More specifically, the Commission said it doubted in this case that the subsidy had a genuine “incentive effect” on the project and believed Samsung could have proceeded with the expansion anyway, without public funds.The Commission also admitted in a statement that it could not rule out the possibility that the state subsidy may “lead to the relocation of jobs from other (EU) member states to Hungary."EU Commissioner Margarethe Vestager, responsible for competition policy, said the inquiry will investigate whether the government grant was really necessary for Samsung SDI to invest more in Göd. Also, it will check the sum being paid is kept to the minimum and that the payment does not “distort competition."“Public investment is important to foster economic growth in disadvantaged regions in Europe. But, public support should only be given it’s necessary to trigger private investment in the disadvantaged region concerned.“Otherwise, it only gives the beneficiary an unfair advantage over its competitors at the expense of taxpayers,” the commissioner added in a statement.Last month, Hungary’s Minister of Foreign Affairs and Trade Szijjártó confirmed the government is offering the Samsung scheme a grant “relevant to its size and importance." But, he admitted, details could not be disclosed until it had EU approval. Samsung SDI already manufactures automotive batteries at plants in Ulsan, South Korea and Xian in China. The Hungarian operation is the company’s only such plant in Europe to date.source : https://www.plasticsnews.com/news/samsung-expanding-ev-battery-plant-hungary-eu-probes-state-subsidy

Editor 2019-11-25

Engel cites drastic decline in global machinery market

Engel cites drastic decline in global machinery market▲Plastics News photo by Caroline SeidelPaul Kapeller from Engel showing the new Sim Link System at the Engel booth at Oct. 16 at K 2019 in Duesseldorf, Germany. Photo: Plastics News/ Caroline SeidelDüsseldorf, Germany — Economic uncertainty and unresolved global issues are dragging down market volumes in the injection molding industry worldwide, Engel executives said.During an Oct. 16 news conference on the first day of K, the Austrian injection molding machinery maker said the impact of punitive tariffs and sanctions, a continuing lack of Brexit clarity, and an ongoing debate concerning regulatory tariffs and diesel driving bans as the biggest drivers leading both consumers and business decision-makers to delay purchases and investments."The declines are drastic and noticeable worldwide," said Christoph Steger, chief sales officer of Engel Holding GmbH.Steger said the company is seeing an inconsistent picture across industries. Technical molding, the company's second-largest contributor to sales, is "on budget," he said, and the company is experiencing continued growth in medical technology.But the automotive industry — the largest of Engel's five business units — has been the hardest hit."There is, within the [plastics machinery] industry, a significant decline in the automotive industry," Steger said, pointing to the monthlong United Auto Workers strike in the United States that has cost General Motors Co. millions of dollars a day from lost production. The union and GM anounced a tentative settlement Oct. 16.Engel's recent report of a global decline, especially in automotive, echoes what the Austrian company had previously warned of earlier this year in an annual earnings report.Globally, all regions are hurting from a slowdown in the automotive industry, but China and German-speaking countries in Europe have been especially impacted. Those two regions contributed the largest share of Engel's 6 percent sales growth for the 2018-19 fiscal year that ended March 31. Sales for that fiscal year were 1.6 billion euros.Steger said the uncertainty of global issues, mainly political, are making forecasting for the year "very difficult," but for the company's current 2019-20 fiscal year, he is anticipating significantly lower sales.Sales for the current year is projected to decline by 19 percent to 1.3 billion euros.▲Plastics News photo by Caroline SeidelJohannes Kilian from Engel showing the new Sim Link System at the Engel booth Oct. 16 at K 2019 in Düsseldorf, Germany.Opportunity in the downturnBut new market opportunities as a result of more digitalization, the disruption and transformation of the automotive industry and a growing focus on the circular economy could soften the negative impact, the company told press attendees.Though the plastics industry has increasingly come under pressure, the company reported its packaging business unit has been nearly unaffected by bans on single-use plastics."We call it 'plastics bashing' here," Steger said, while acknowledging that plastics pollution is a very serious problem that deserves the industry's attention and should not be neglected.In regard to the circular economy and recycling, specifically, he said it is "not an obstacle" for the plastics industry, but an opportunity.Engel's top executive, CEO Stefan Engleder, also spoke of the company's commitment and responsibility in the circular economy."It is of upmost important that everybody contributes to close the circle. … We are part of the problem, of course, but we are also part of the solution," said Engleder, adding that if everyone works together — this includes the plastics industry, consumers and governments worldwide — "real solutions, concrete solutions" can be found.In other news, the company's 2020 investment program is nearly complete. The strategy involved pumping nearly 400 million euros into capacity expansions and upgrades across its sites, including the large-scale production plant in St. Valentin, Austria. There, Engel is building a customer technology center and expanding the Center for Lightweight Composite Technologies.Earlier this year, Engel opened a customer center at its headquarters in Schwertberg with 1,700 square meters of production space. The center is connected via network to Engel's other technology centers in the United States, Mexico and China, and is equipped with the full Inject 4.0 portfolio.In automotive, future-focused trends such as new mobility, autonomous driving, car sharing as well as a gradual global ramp up of electric vehicles are also carving out opportunities for plastics, composites and injection molding applications, the company said. This includes integrated smart surfaces and an increasing demand for components for vehicle electronics such as connectors and seals.As more electronics go into vehicles, innovations in lightweighting becomes more important, too.From digital to realIn big technology news, Engel announced its collaboration with Autodesk Inc., a global 3D design, engineering and construction software firm, on a product called Sim Link.Sim Link, which will be available globally to both Engel and Autodesk customers next year, is designed to connect the simulation with the real injection molding process.At K, Engel is demonstrating this by showing how the results of simulations performed using the Autodesk's Moldflow simulation software can be transferred to Engel's CC300 control unit. The optimized process and measurement data can then flow back to the machine for use in the simulation."They are very keen on this product," Engleder said of early feedback from customers.With Sim Link, the company said, the optimized simulation parameters can be converted into a setting data record, or recipe, that can be used directly in the injection molding machine. The process parameters and measurement results can also be imported from the injection molding machine back into Moldflow.This also allows unfavorable process settings to be analyzed, enabling adaptations to be implemented more rapidly and precisely, the company said. And, as a result, it is becoming a more affordable competitive advantage for small injection molding companies, too.source : https://www.plasticsnews.com/news/engel-cites-drastic-decline-global-machinery-market?utm_source=pn-daily-report&utm_medium=email&utm_campaign=20191016&utm_content=article2-headline

editor 2019-10-26

Japan's Toshiba Machine to become Shibaura Machine in 2020

Japanese machinery maker Toshiba Machine Co. Ltd. is changing its name to Shibaura Machine Co. Ltd., effective April 1, 2020.Toshiba Machine stockholders approved the name change during a general meeting in June, the company said. It will make a gradual shift to Shibaura Machine throughout the next year.Takahiro Mikami, president of Tokyo-based Toshiba Machine, said the new name takes the company back to its roots."We were founded in 1938 as Shibaura Machine Tool Co.," he said in a statement.Decades later, in 1961, Shibaura Machine merged with a corporate spinoff to form Toshiba Machine.The move also follows previous steps to achieve independence from Toshiba Corp., the former parent company and top shareholder. In March 2017, Toshiba Machine bought back stock owned by Toshiba Corp., enabling a split from the parent company.It said its separation from Toshiba Corp. "has been seamless, with no impact to the company's operations, customers, shareholders, employees or business partners, nor the value of Toshiba Machine's stock," a Sept. 9 news release said. It expects a smooth transition to Shibaura Machine as well."Our goal as Shibaura Machine is to be a supplier of the highest quality machinery and systems, one that is well-positioned to grow and contribute to the global economy for decades to come," Mikami said.source: https://www.plasticsnews.com/news/japans-toshiba-machine-become-shibaura-machine-2020

editor 2019-09-22

Robot sales slide in plastics sector

Robot sales slide in plastics sector▲ Robotic Industries AssociationNorth American robot and orders rode a strong second quarter — 19.2 percent in unit volume over the same period a year ago — and are up 7.2 percent for the first half of 2019, thanks largely to a robust automotive sector, according to the Robotic Industries Association.Orders to the plastics and rubber sector, however, declined 8 percent in the first half.From January through June, North American companies ordered 16,488 robots, valued at $869 million, the trade association said.Automakers generated an 83 percent increase in units ordered in the first half, compared with the first half of 2018. Other industries that increased orders include semiconductor and electronics (12 percent), life sciences (8 percent) and food and consumer goods (3 percent).The North American robot market is back on track, after a first quarter where orders declined 3.5 percent from the year-ago first quarter — in what had been a record year in 2018, said Bob Doyle, vice president of the Robotics Industries Association in Ann Arbor, Mich.Doyle said automotive sales dropped toward the end of 2018 and first part of this year, before rebounding in the second quarter. That hit sales to automakers, who are a key automation market, he said.RIA is part of the Association for Advancing Automation. President Jeff Burnstein said automation creates factory jobs."Robot use continues to grow, which is helping make U.S. companies more competitive and leading to new job growth," Burnstein said. "We are currently experiencing the greatest period of robot expansion in history — over 180,000 robots have been shipped to American companies since 2010, and more than 1.2 million new manufacturing jobs have been created during this time."The association's next trade show is the Autonomous Mobile Robot Conference, in Louisville, Ky., Sept. 17. The International Robot Safety Conference follows Oct. 15-17 in Indianapolis.source: www.plasticsnews.com

Editor 2019-08-25

Hillenbrand purchase ‘a unique opportunity for Milacron'

Joe Wilssens Milacron displayed the Cincinnati 2250 Injection machine, staking the claim to the biggest at NPE2018. Hillenbrand Inc., the owner of Coperion, announced July 12 it is buying Milacron Holdings Corp.In a blockbuster deal in the plastics machinery sector, Hillenbrand Inc. — the Batesville, Ind.-based parent company of compounding extruder maker Coperion and auxiliary equipment firms K-Tron and Rotex — is buying Milacron Holdings Corp. in a cash and stock deal valued at about $2 billion.Executives of both companies said one key area will be in extruders, making a combined, stronger and more diversified company.Both companies also generate about one-third of their machinery-related sales from aftermarket spare parts and service — so-called "consumables," or business that brings in steadier sales than capital machinery.Milacron CEO Tom Goeke said that only about 35 percent of the total Milacron portfolio is sensitive to cycles thanks to the Mold-Masters hot runner, DME mold-component and metal-cutting fluids businesses.The boards of directors of both companies unanimously approved the sale, announced July 12, which is expected to close in the first quarter of 2020. The deal is subject to approval by Milacron shareholders.The combined company is expected to generate annual sales of nearly $3 billion and free cash flow of more than $325 million by 2021. Milacron had sales of $1.1 billion in 2018. It employs approximately 5,800 people. Hillenbrand is a $1.8 billion company with a global workforce of roughly 6,500. Both companies are traded on the New York Stock Exchange.The combined operation will have $502 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). Joe Wilssens GoekeHillenbrand, the manufacturer of burial caskets under the 100-year-old Batesville Casket brand, went public in 2008 and has been diversifying into industrial machinery, building a Process Equipment Group.The acquisition of Milacron — the largest U.S. manufacturer of plastics machinery — is global diversification on steroids. Hillenbrand President and CEO Joe Raver said the deal gives the company more global reach in all areas of the plastics machinery sector."I firmly believe that this is the next step in Hillenbrand's vision to become a world-class global diversified industrial company," Raver said in a conference call after the announcement. "In the Milacron businesses, we're getting, you know, really great technology, sizable customer install base. And these are good businesses with good growth profiles and operating margins."Raver added: "Milacron advances our strategy to drive long-term profitable growth and value to our shareholders."Milacron brings Hillenbrand three business segments: Advanced Plastics Processing Technologies, which makes injection molding machines, extruders and structural foam machines; Melt Delivery and Control Systems, which makes hot runner and process control systems, mold bases and components under the Mold-Master, DME and Tirad brands; and Fluid Technologies, the Cimcool product line of fluids for metalworking.When the deal closes, Hillenbrand shareholders will own about 84 percent of the combined company and Milacron shareholders will own about 16 percent.Under terms of the agreement, Milacron stockholders will receive $11.80 in cash and Hillenbrand common stock under a fixed exchange rate of 0.1612 for each share of Milacron stock that they own. Based on Hillenbrand's closing stock price on July 11, the final trading day before the announcement, the cash and stock amount for Milacron shareholders is $18.07 per share, representing a premium of about 38 percent to Milacron's 30-day, volume-weighted average price.Milacron's stock soared 21 percent during July 12 premarket trading after news of the buyout was released. Shares were trading 24.5 percent higher to $16.84 in Friday's afternoon trading. Hillenbrand stock tumbled 15 percent before the market opened. Shares were trading down 11.09 percent to $34.56 in afternoon trading. The stock has a 52-week high of $53.41 and a 52-week low of $33.75.The $2 billion purchase price includes $686 million in Milacron debt. Hillenbrand Chief Financial Officer Kristina Cerniglia said Hillenbrand is funding the cash portion of the transaction with debt in a bridge financing facility. The company will refinance Milacron's debt, she told financial analysts in the conference call.After the deal closes, Hillenbrand will focus on deleveraging its debt and later will again look at strategic acquisitions, Cerniglia said. Within three years after the closing, Hillenbrand expects cost savings of $50 million from reducing public company costs, operating efficiencies and better procurement economics.Hillenbrand Inc.Raver‘A very good offer'The news also comes about a week after Milacron said it had completed the sale of its Uniloy blow molding machinery business to two private equity firms — Osgood Capital Group LLC and Cyprium Investment Partners LLC — for nearly $52 million.Goeke said Milacron's board carefully reviewed the offer to sell the company."This transaction represents a unique opportunity for Milacron," he said. "[Milacron leaders and board members] tested the waters and found out that it is, in fact, a very good offer."Raver and Goeke gave analysts some details about how the deal came together. It's only about 50 miles between Batesville, Ind., and Milacron's headquarters in the Cincinnati suburb of Blue Ash. Raver said the two met and when they started talking about their respective businesses, "we discovered a lot of similarities." One is in corporate culture, they said — the self-styled Hillenbrand Operating Model is similar to Milacron's business philosophy.Raver and Goeke said the two companies have very little overlap, including in the one product that they both make: extruders.Hillenbrand bought German compounding extruder maker Coperion in 2012. Coperion makes large, highly engineered extrusion lines for large projects at compounders and resin makers.Milacron extruders produce construction products such as PVC pipe, vinyl siding and decking."So [the deal] really expands a large, complementary position in extrusion," Goeke said.Raver said the companies can cross-sell extruders and material handling equipment in the short to medium term.The deal also extends the combined company's reach into end markets such as construction, consumer packaging automotive, electronics, medical and recycling, he said.Amy SteinhauserMachinery reactionOwnership changes — even big deals involving manufacturing behemoths like Milacron — are part of the plastics machinery industry."It happens and some for the good, some for the bad," said Bill Duff, general manager of sales and marketing at Chinese machinery maker Yizumi-HPM Corp. in Iberia, Ohio. Parent company Guangdong Yizumi Precision Machinery Co. Ltd. bought the intellectual property of HPM — one of the earliest U.S. manufacturers of injection molding presses — in 2011."We're doing quite well, but we couldn't have done well without the investment from Yizumi," Duff said.He added: "Will [Hillenbrand] invest in more capability with the company, or will they just take cash out of it? Time will tell."Glenn Frohring, president of Absolute Haitian Corp. in Worcester, Mass., said he wasn't surprised by the announcement, especially if Milacron was getting pressure from investors to sell."I don't expect business to change for Milacron," he said. "Hopefully it's a positive thing. We only wish the best for even the competitors in our industry."Bill Wood, Plastics News economics editor and founder of Mountaintop Economics & Research Inc., said the acquisition is "a pretty big deal.""I don't know of anybody bigger in the U.S. as a far as a machinery company for the plastics industry," he said of Milacron. Given Milacron's size and segment diversity in the U.S. plastics equipment market, Wood said he does not expect to see many deals like this in the future."This deal has clearly been in the works for a long time, but I don't really think these kinds of deals are going to be increasing," he said. "This might actually be the last one."SOURCE : https://www.plasticsnews.com/news/hillenbrand-purchase-unique-opportunity-milacron

Editor 2019-07-18