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Plastics Industry Puts Skills Gap in its Sights

By: Tony Deligio 17. September 2014

When you complete an article, sometimes you feel like everywhere you look news related to that topic is popping up.

 

In Plastics Technology’s September issue, I wrote about the so-called skills gap in manufacturing and what folks in plastics are doing to address it, so the whole topic is still very top of mind for me. Apparently it’s top of mind for other folks as well. On September 16, I received five press releases related in various ways to the skills gap, ranging from a Manufacturing Day celebration to machine donations to schools to plastics education online and in apps. If awareness of the skills gap really is everywhere, that’s a good thing for the plastics industry.

 

Toshiba Machine announced it will host students and their teachers from local high schools, community colleges and universities for its first annual Manufacturing Day celebration. On Oct. 3, more than 600 Manufacturing Day celebrations will take place across the U.S. For Toshiba, celebrating means helping the U.S. “secure its leadership position in the global manufacturing marketplace by inspiring the next generation of workers to pursue careers in the industry.”

 

Toshiba’s event will run from 10:00 am – 4:00 pm at its corporate headquarters in Elk Grove Village, Ill.  Guest speakers will include Michael Taylor, Senior Director, International Affairs and Trade, Society of the Plastics Industry (SPI) and Omar A. Ghrayeb, Associate Dean, Outreach and Undergraduate Programs, Northern Illinois University. Additional presentations at the event will come from Paulson Training Programs, RJG, Reiloy Westland and Yushin America.

 

SPI and Tooling U-SME launched a new online training program intended to close “the manufacturing skills gap in the plastics industry.” PlasticsU will provide a customized selection of courses and programs for a broad array of plastics related skills. SPI noted that the offerings range from a basic introduction to the most advanced studies, with courses including Interpreting Blueprints; Creating a Milling Program; Principles of Injection Molding; Measuring System Analysis; Rigging Inspection and Safety; and CNC Controls.

 

Milacron announced an expansion of its Education Partnership program, specifically shipping a Magna T Servo injection molding machine to Salt Lake Community College in support of its short-term intensive training program for injection molding. Milacron noted that it has more than 40 machines supporting learning institutions across the U.S.

 

The Salt Lake Community College molding lab currently features three machines, with room for five. The plastics program’s goal is to train up to 15 students every eight weeks. Milacron also noted that Penn State Erie, which offers an accredited plastics engineering technology degree, celebrates the 25th anniversary of its first graduating class in 2014. The multimillion dollar Penn State lab, which has equipment from Milacron and others, provides more than 125 students hands-on training every year.

 

Routsis Training announced the release of its new Injection Molding Reference Guide app for both Apple and Android devices. Routsis notes that the reference guide gives process techs the info they need to troubleshoot and establish a scientific molding process. The app also includes information regarding Routsis’ RightStart and SmartTech training, including video previews from actual training courses.

 

Finally, the first ever International Congress on Vocational and Professional Education and Training was held, an event described as a “global dialogue about the importance of a skilled workforce for economic competitiveness.”

 

Jim Wall, executive director of the National Institute for Metalworking Skills (NIMS) attended highlighting the NIMS’ Competency-Based Apprenticeship System. NIMS reported that the congress focused on “building a positive image of vocational training, supporting bilateral exchanges between the private sector and policymakers, and presenting best practices in companies and schools.”

 

Toshiba Opens Service Center in Mexico

By: Matthew H. Naitove 17. September 2014

Another indicator of the growing importance of Mexico to North American plastics manufacturing is the recent opening of the first Mexican service center by Toshiba Machine Co. America, based in Elk Grove Village, Ill. Located in the Nippon Express Guanajuato Logistics Center in Puerto Interior, Silao, Guanajuato, the new facility offers local service and support to injection molding and die casting customers throughout the country. Mexico has benefited from the “reshoring” trend as a competitive counterbalance to manufacturing in the Far East. “This is a thriving market for us,” says Toshiba Machine America general manager Tom McKevitt. Manager of the new service center is Robert Kinzel. Contact: +52 472-748-5400.

Helping PET Blow Molders Save Energy & Material

By: Matthew H. Naitove 17. September 2014

Two projects are under way at Plastic Technologies, Inc. (PTI), Holland, Ohio, a leader in PET package development. One is intended to help PET bottle makers reduce their energy costs by designing custom plans for processors. This involves a careful analysis of all bottle manufacturing stages at the customer. This includes preform and bottle production, supply and quality of compressed air, machine conditions and capabilities, blowing cycle review, oven setup, process development, and package performance validation. “Companies go out of their way to drive weight out of bottles, but they often overlook the significant amount of energy waste that occurs when running the equipment,” says Donald Miller, v.p. of technical services. “Depending on how inefficient energy usage is, this can be a gold mine of ‘found money’ for the company.”

 

A particular focus of PTI’s energy review is compressed-air usage. Miller says, “The key to creating a successful energy reduction program is to consider air delivery and air demand requirements at the same time. In the past, companies have tended to focus on these as separate areas and not in concert with one another. Using a systems approach is the key to optimizing operational improvements.”

 

Another new initiative by PTI is becoming the exclusive U.S. representative for several PET processing technologies developed by Toyo Seikan Co., Ltd. of Tokyo. One of the areas that the two companies will be working together on is new foamed PET bottle technology which produces lightweight containers with good barrier attributes and unusual visual and tactile properties. The companies will unveil more details about the new technology—and its potential impact on beverage packaging in the U.S.—in the coming months. They also will reveal other PET technologies to be marketed here.

Injection Molding, Auxiliaries Drive Plastics Equipment Market in Q2

16. September 2014

Record breaking auxiliary bookings, strong injection molding machine demand, and growth in twin-screw extruder orders pushed the value of shipments of primary plastics equipment to $299.3 million in the second quarter, 10% above the year-ago quarter.

 

The Society of the Plastics Industry's (SPI) Committee on Equipment Statistics' (CES) most recent report showed continued strength for the North American market, with the $299.3 million in shipments of reporting companies just slightly below the first quarter's $300.3 million result. So far in 2014, the total value of primary equipment shipments is running 10% ahead of 2013.

 

Injection molding machinery shipments were up 9 percent in the second quarter compared to last year, while shipments of single-screw extruders slipped 2 percent. The value of twin-screw extruder shipments jumped 63 percent, while blow molding machine shipment values slipped 2 percent.

 

The auxiliary equipment segment, including robotics, temperature control, and materials handling, totaled a record-breaking $108.0 million, representing a surge of 21 percent compared to the second quarter of 2013.

 

The CES also conducts a quarterly survey of plastics machinery suppliers, and  when asked about future market expectations, 90 percent of the respondents said they expect conditions to stay the same or even improve in the coming quarter, while 88 percent expect them to hold steady or get better during the next 12 months.

Capital Equipment Investment: To Lease or Borrow?

By: James Callari 16. September 2014

 

As the economy continues to improves, more processors are making capital investments to help them expand their current business and/or penetrate new markets. The question becomes, how should they finance this investment? It's a particularly relevant question around when processors start putting together their capital equipment budget for the upcoming year.

 

“When business owners and managers consider acquiring equipment, they often think of their payment option as a ‘lease versus buy’ decision,” states William G. Sutton, CAE, president and CEO, Equipment Leasing and Finance Association. “In any economic environment, when preserving owner or shareholder capital is an important goal, financing equipment through a lease or loan will enable your business to preserve its cash.

 

“Whether you finance equipment through a lease or loan, each has its advantages,” Sutton says. “In evaluating your options, it is important to look at each alternative to determine which will best balance usage, cash flow and your financial objectives.”

 

To help determine the most appropriate option, Sutton has compiled a list of 10 questions processors should ask themselves before proceeding: 

 

1. How long will the equipment be required?

 

“Generally speaking, if the length of time the equipment is expected to be used is short term (which usually means 36 months or less), leasing is likely the preferable option, “ he says. “Equipment expected to be used for longer than three years could be a candidate for either a lease or a loan.”

 

2.  What is the monthly budget for the equipment?

 

“As with any ongoing business expense, consider the monthly cost for a piece of equipment and how it fits into your budget," he states. In general, leasing will provide lower monthly payments.”

 

3. Will the equipment become obsolete while it is still needed for the operation?

 

Sutton notes, “Protection against obsolescence is one of the many benefits of equipment leasing, since the risk of obsolescence is assumed by the lessor. Certain lease financing programs allow for technology upgrades and/or replacements within the term of the lease contract.”

 

4.  Is the equipment going to be used for a specific contract or can it be used for other projects?

 

“Often, the business objective of equipment is for it to be revenue-producing. If a piece of equipment has limited use within a specific contract and won’t be used for other projects, it’s not ideal for it to be idle while you continue to make payments on it,” Sutton explains. “It makes sense to stop the equipment expense when the income from it ceases, which you can do with a lease.”

 

5. How much cash would be required up front for a lease and for a loan?

 

“Leasing can often provide 100% financing of the cost of the equipment as well as the costs for transportation, delivery, installation set-up, testing and training, and other deferred costs (e.g., sales tax),” states Sutton. “Loans usually require a down payment and don’t include the other cost benefits. Ask how much of a down payment is needed and assess the availability and desirability of allocating company capital for that down payment.”

 

6.  Can the company use the depreciation or would the company get a greater benefit from expensing the lease payments?

 

“The tax treatment of the financing arrangement is an important consideration in choosing between a lease and a loan,” Sutton says. “A loan provides you with the depreciation tax benefit; with a lease, the lessor owns the equipment and realizes the tax benefit, which is usually reflected in a lower monthly rent payment for your business as well as the ability to expense the payment. In many instances, if your business cannot use the tax benefit, it makes more sense to lease than to purchase through a loan because you can trade the depreciation to the lessor in exchange for better cash flow.”

 

7. How will a working capital facility be impacted?

 

“Many businesses have an aggregate line of credit through a bank that they can use for inventory purchases, improvements and other capital expenditures,” Sutton elaborates. “Depending on the lending covenants, it is often possible, as well as preferable, to preserve your bank working capital by leasing equipment through an equipment finance provider.”

 

8. How flexible does your business want the financing terms to be?

 

Notes Sutton, “A lease can provide greater flexibility, since it can be structured for a variety of contingencies, whereas with a loan, flexibility is subject to the lender’s rules. If your business has continuing use for the equipment at lease termination, extended rentals, purchase options, trade-ups and return options are available. The lease term allows your business to match all expenses to the term of the equipment’s use, including income tax expense, book expense and cash expense. Most importantly, as mentioned previously, the expense stops when the equipment is no longer required.”

 

9. Do you anticipate the need for additional equipment under your financing agreement?

 

“If your business is planning for growth, you can enter into a master lease that will allow you to acquire multiple pieces of equipment under multiple schedules with the same basic terms and conditions,” Sutton explains. “This provides greater convenience and flexibility than a conditional loan contract, which must be renegotiated for additional equipment acquisitions.”

 

10.   Who can help me evaluate what's best for my business?

 

“Whether you finance equipment through a lease or loan, each has its advantages. When making the decision between a lease and a loan, it is highly recommended that you consult with your accounting professional, as well as draw on the resources of your equipment financing provider to enable you to secure the best possible terms for your lease and/or loan,” Sutton says.

 

These are some of the key considerations that should go into the lease versus loan decision-making process. For a lease/loan comparison and online tools, click here




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