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Planning on Investing in Equipment? Best Be Decisive

By: James Callari 17. December 2014

Every year Gardner Business Media, the Cincinnati-based parent company of Plastics Technology, does research on what plastics processors plan to buy in the way of capital equipment in the year ahead. Within the next few weeks, we’ll have the full report of this study in the print pages of Plastics Technology, as well as posted on this website.

 

For now, let me share some thoughts with you as I peruse the manuscript, which was written by Steve Kline Jr., Gardner’s director of market intelligence.

 

My first reaction was that NPE ’15 could not have come at a better time. My second reaction, as I dug deeper into the analysis, was that processors need to be decisive in their buying plans if they have their sights set on something in particular this year.

 

Steve is projecting that processors will invest $5.4 billion on primary processing machinery, auxiliary equipment, and molds this year, a $17% uptick over what was laid out in 2014. As a processor, you might be tempted to respond to this with an ambivalent shrug. You might think something like: “So sales of robots are going to increase a lot in 2015. That’s nice, but I’m a molder; I don’t make or sell robots, I buy and use them. How does that impact me?”

 

It impacts you, because as Steve astutely pointed out, an increased demand for machinery will influence how long it will take you to accept delivery and ultimately commission your new product, whether you will be able to get your “first choice” to begin with, and perhaps what you’ll have to pay for it.

 

“Processors should expect longer delivery on equipment orders as the year progresses,” Steve explains. “When demand increases rapidly … suppliers may have a hard time ramping up production fast enough. As orders build up in the pipeline, delivery times typically grow longer and longer. Because a significant amount of processing equipment acquired in the U.S. is imported, shipping times from overseas can exacerbate the problem.”

 

He continues, “Equipment and mold prices are likely to rise during 2015. This is a supply-and-demand issue. When demand rises rapidly and builders cannot increase the supply as fast as demand is rising, the price of machines and molds tends to increase to balance things out.”

 

And last but not least: “The longer processors wait before pulling the trigger on an order next year, the more unlikely it is that they will be able to buy their first choice of equipment.”

 

Steve’s bottom line? If you are serious about making an investment in capital equipment, it might be better for you to act sooner rather than later. Over the 28 years I have covered this industry, I have heard time and again—from both processors and suppliers—about investment plans that have either been delayed or scaled back. But as business conditions among processors continue to improve, any delay could put you at a competitive disadvantage. In other words, there are reasons beyond delivery times and purchase price for you to act quickly.

 

 

Steve points out the U.S. monetary base is an excellent leading indicator of primary plastics processing equipment consumption. Historically, changes in the monetary base lead changes capital equipment consumption by 24 months on average, as the chart above indicates. The monetary base saw its peak rate of growth in the summer of 2014, which means processing equipment consumption should see accelerating growth through 2015 and possibly into 2016.

 

As Steve points out, most processors make investment decisions based on capacity utilization—how busy existing equipment is right now. Generally, the Gardner survey shows that the need to increase capacity has been the number one motivator for plants to buy new capital equipment. This finding has not changed in 25 years.

 

Capacity utilization is at its highest level since late 2007, and has been increasing at an accelerating rate, as the chart above shows. This is likely to continue, and based on the correlation between backlogs in our business index and capacity utilization, capacity utilization could reach 80% in 2015 for the first time since January 2007, and capacity utilization could average more than 80% for the first time since 2006

 

So am I recommending you come to NPE with your checkpoint and a purchase order in hand? Not necessarily. But think about having them in your pocket.

Get Ready for the Extrusion '15 Conference

By: James Callari 21. November 2014

If you are involved in extrusion as either a processor or supplier, it’s not too early to mark your calendar for Nov. 2-3, 2015. That’s when Plastics Technology will host the first-ever conference devoted to extrusion. The Extrusion 2015 Conference will take place on those dates in North Carolina at The Omni Charlotte Hotel. 

 

Of course, many other types of extrusion-related conferences have been held over the years. In fact, we at Plastics Technology have worked on quite a few. But these have been specific, focusing, for instance, on film/sheet; medical tubing; compounding; and biopolymers, to name a few.

 

There is a certain logic to organizing a conference along the boundaries of a very specific extrusion process, as there are pronounced differences among them. However, there are quite a few common elements as well. The objective of The Extrusion 2015 Conference is to combine the “specific” aspects of extrusion with the “general” ones.

 

Here’s how. The morning sessions on each day of this two-day event will be devoted to technical and business issues of interest to any type of extrusion processor. So there will be presentations on topics such as materials; additives; screw design; high-speed processing; energy efficiency; sustainability; filtration, blending, drying and conveying; process simulation; training; size reduction; recycling; resin characterization; foaming; and more.

 

On each afternoon, there will be concurrent breakout sessions devoted to three specific types of extrusion processes in which your business likely falls: Film/Sheet; Pipe, Profile, Tubing; and Compounding. In these sessions, presentations will dig deeper into topics such as barrier film; thin-gauge sheet; multi-lumen tubing; high-speed compounding; and more.

 

The plan is for The Extrusion 2015 Conferenced to be a yearly event modeled after the Molding Conference our parent company, Gardner Business Media, purchased last year from Executive Conference Management. Next year will mark the Molding conference’s 25-year anniversary.

 

We recognize you’re likely more pressed for time now than ever. We also know you have a lot of outside events competing for that time. And on top of that, next year is an NPE year. But our intention is to organize The Extrusion 2015 Conference in such a way so that it’s the only conference you’ll need to attend next year—and beyond—if your business is pumping hot polymer through a die to form a part.

 

In the months ahead, please be on the lookout in our magazine, this website, and in your own inbox for more information on this groundbreaking event. Or feel free to email me at jcallari@ptonline.com

So What’s a Plastics Pioneer?

By: James Callari 21. October 2014

 

This past weekend my wife and I made the five-hour trek from New Jersey to York, Maine to attend the meeting of the Plastics Pioneers Association (PPA), of which I am a member. (Full disclosure: I and fellow PPA inductee and Plastics Technology Executive Editor Matt Naitove make up the group’s publicity committee.)

 

Anyway, during the drive up in what was tantamount to a monsoon, I started to think about the first time I made that trip. It was four years ago, when I received my PPA induction pin. I reflected on the impressions I had of the PPA before I had become a member, and how much they have changed since.

 

Like any story, it’s best to start at the beginning. My timeline might be off a bit, but around the summer of 2011 I received a phone call from extrusion industry veteran Al Hodge. I’ve known Al for more than 20 years, so it wasn’t an extraordinary circumstance to receive a call from him. But I was surprised at what he wanted to talk about.

 

“How would you feel about becoming a member of the Plastics Pioneers Association?” Al asked. My first response was “Huh?” Now, I had heard of the PPA in my nearly 30 years in plastics, but didn’t envision myself as a fit.

 

As Al talked a bit about the group a variety of thoughts raced through my head. “Why would I, a 51 (at the time) year-old guy, join a ‘club’ of, well, ummm, much older people?” I don’t think I actually said that to Al, but I might have, as sometimes the filter between my brain and mouth malfunctions, However I put it, Al chuckled a bit, filled me in on some of what the PPA gets involved in, and I said yes. I think it was Al and Tim Womer who nominated me.

 

Shortly thereafter I received a very thick book in the mail, about as thick as the yellow pages used to be. It was The Who’s Who of the Plastics Pioneers Association Inc., the PPA's membership roster. I leafed through it, saw the names of members active, inactive, and no longer with us. I thought “Wow, this is an impressive group of people.” Many, in fact, have been inducted in the Plastics Hall of Fame.

 

So then, since I’d now become honored about the appointment as opposed to befuddled about it, I felt a little bragging was in order. I called a couple of friends in the industry, "young" old timers like me, and filled them in. Well, the jokes were relentless. Here’s one of the more tame ones: “Congrats. Every time you go to a meeting the average age will drop to 85.”

 

Undaunted, I fueled up and made the 300-mile journey to York to get my pin. There were a few other people inducted with me. I don’t remember all of them, but one was my friend Rick Shaffer, who used to run Netstal and before that Demag. Rick’s got a great sense of humor. “I used to think being inducted to the PPA was a great honor,” he said before a group of people, including me, at the cocktail reception. I knew the punch line was coming, and Rick delivered, chuckling, “Then I saw Jim Callari’s name on the list.”

 

Then I started attending meetings. I listened mostly at first, and quickly had an epiphany: These people do important stuff, the kind of stuff that's dedicated not only to preserving this great industry's past, but teeing up its future. They award scholarships; early this year they set up an endowment program with the University of Massachusetts-Lowell. They continue to award scholarships to individual students. As I reported in an editorial about a year ago, through the efforts of PPA long-timers Harry Greenwald and Glenn and Patsy Beall, the group established a virtual museum at Syracuse University.

 

But like many associations in this industry, PPA’s membership is starting to dwindle a bit. Many of the founding fathers of the industry that comprised the PPA membership roster since it was formed in 1944 have either passed away, retired, or are no longer involved. The “face” of the PPA is beginning to change: now that many of the entrepreneurs that made this industry great are gone, the newer (and potential) members are in positions within their company (be it sales, marketing, engineering, general management) that they say make it difficult for them to get involved in these kind of associations.

 

The way I look it, that’s a situation that cannot be allowed to perpetuate. This industry is in dire need of young blood, and work that the PPA does has helped keep such blood pursue careers in plastics. Case in point: in Maine over the weekend the group was introduced to Michael Magaletta, a U-Mass Lowell student with a 3.99 GPA who will graduate next May with a BS in plastics engineering. Michael was the first recipient of the PPA’s scholarship endowment, and after school will begin his professional career with a very well-known consumer products company based in New England. Michael spoke briefly, and said he would have had more difficulty in achieving in goal without the PPA's support. Michael wasn't alone; in Maine the group announced that it awarded scholarships to nine other students outside the U-Mass endowment program, and had increased its donation to the Plastivan program.

 

I'm off my soap box now, but promise me if Al Hodge, Tim Womer or anyone else from the PPA calls you and asks you about joining, don't say "Huh," forget about what you think you know about the organization, and consider getting involved.

SPE Extrusion Group Annnounces Two New Scholarships

By: James Callari 26. September 2014

The Extrusion Division of the Society of Plastics Engineers announced recently the establishment of two new scholarships for student seeks to pursue advanced education in polymers.

 

The Ed Steward Ed Steward Scholarship will be awarded to students selected by the SPE Extrusion Division’s Scholarship Review Panel. The Division will award scholarships as follows: Once each academic year, the Extrusion Division of SPE will have a goal to award at least one $2,500 scholarship to a student meeting the scholarship’s criteria listed below:

• Applicant must be or become a SPE Student Member and be active in the local Student Chapter if their university or college has such a chapter.

 

• Applicant must be attending (or high school senior applying to attend) a U.S. or Canadian college or university.

 

• Applicant must be an undergraduate student enrolled in, or high school senior applying to, an associate degree or technical degree program, who is committed to becoming a “hands-on” workers in the plastics industry – i.e. students who are dedicated to careers as plastics technicians or engineers.

 

Preference will be given to:

 

• Students pursuing a career in plastic or rubber extrusion processing.

 

• Students of exceptional merit enrolled at a university or college who are focusing on polymers or Plastics Engineering

Students pursuing an associates or bachelor’s degree in Mechanical, Chemical, or Manufacturing Engineering and focusing on a career in manufacturing involving plastics.

 

• High school seniors or students in their first year in an engineering program at a college or university;

• Students with an academic record indicating a 3.0 grade point average or higher who are in good academic standing;

 

Students who are awarded the Ed Steward scholarship are to submit a testimonial report back to the SPE Extrusion Division as to the benefit that they were given by receiving the scholarship from the Extrusion Division.

Ed Steward (photo) was a long-time member of the SPE Extrusion Division whose screw designs are still operating at plastics plants around the world. After a long-stint at Davis-Standard, Steward joined with Bill Kramer to co-found American Kuhne Corp., Ashaway, R.I., which is now part of Graham Engineering Corp. Steward passed away in 2011.

 

The scholarship will be funded by contributions from of $1200 from the Steward family; $1800 from SPE Extrusion Division; and $6000 from American Kuhne.

 

The Russell J. Gould Scholarship, meantime, will also be awarded to students selected by the SPE Extrusion Division’s Scholarship Review Panel. The Division will award scholarships as follows:

 

Once each academic year, the Extrusion Division of SPE will have a goal to award at least one $2,500 scholarship to a student meeting the scholarship’s criteria. The conditions are as follows:

 

• The applicant must be or become a SPE Student Member and be active in the local Student Chapter if their university or college has such a chapter.

 

• The applicant must be US or Canadian citizen;

 

Preference will be given to:

 

• Students pursuing a career in plastics, rubber or polymer processing.

 

• Students of exceptional merit enrolled at a university or college who are focusing on polymers or Plastics Engineering

 

• Students pursuing an associates or bachelor’s degree in Polymer, Materials Science or Plastics Engineering and focusing a career in manufacturing.

 

• Students in their second or third year in their degree program at a college or university;

 

• Students with an academic record indicating a 3.0 grade point average or higher who are in good academic standing.

 

• Students who are awarded the Russell J. Gould scholarship are to submit a testimonial report back to the SPE Extrusion Division as to the benefit that they were given by receiving the scholarship from the Extrusion Division.

Gould died last December. A long-time member of the Extrusion Division Board and editor of its newsletter, he was an internationally known inventor and consultant and won engineering awards for his distinguished work in the plastics industry.

 

For more information on either of these scholarships, click here.

New Initiative Aims At Workforce Development

By: James Callari 26. September 2014

The Society of the Plastics Industry (SPI) and the Society of Manufacturing Engineers (SME) Tooling U have announced the launch of a new online training program aimed at closing the manufacturing skills gap in the plastics industry. Administered by Tooling U-SME, PlasticsU will serve the plastics industry by providing formal online training tailored specifically for the industry’s challenges and needs. Tooling U-SME is considered a leader in providing workforce development and training to the manufacturing industry,

 

“Our industry has some of the best and brightest workers, operating top-of-the-line equipment and technology,” said Bill Carteaux, SPI's president and CEO. “Unfortunately, many of the technological advancements made recently are being held back by a growing manufacturing skills gap, which is why SPI partnered with Tooling U-SME to launch PlasticsU.”

 

He adds, “The plastics industry will not realize its full capacity for growth and production unless companies take an active approach to workforce development. PlasticsU offers these companies flexibility and convenience to make this process easy.”

 

As recently as 2013, a vast majority of U.S. manufacturing companies reported being challenged by a moderate shortage of qualified workers for skilled production, as reported by SME. Volume alone is no longer the sole solution to increased productivity. Highly technical and specialized skills are required not only to meet increased demand, but to maintain growth into the future.

 

“By instituting a training program, companies can ensure they remain competitive today and into the future,” said Jeannine Kunz, managing director of SME’s Workforce and Education. “Creating a well-trained workforce can help improve quality, cycle time, communications, reliability and safety, while reducing costs and downtime/rework.”

 

Because SPI represents and supports such a wide range of the companies throughout the entire plastics industry, it partnered with Tooling U-SME to develop PlasticsU and provide a customized selection of courses and programs for areas specific to as many stakeholders as possible. With levels ranging from a basic introduction to the most advanced studies, courses include Interpreting Blueprints; Creating a Milling Program; Principles of Injection Molding; Measuring System Analysis; Rigging Inspection and Safety; and CNC Controls: GE Fanuc, Haas and Mazak.

 

Click here to learn more about PlasticsU and to sign up.

 

In another somewhat related development, DME Company, a leading supplier of hot runners, mold bases and a variety of other mold components based in Madison Heights, Mich.,  has awarded a $1,000 DME Plastics University scholarship to a senior student at the University of Wisconsin-Platteville. Teng Yang (photo below), who hails from Oshkosh, Wis, received the scholarship for the fall 2014 semester at UW-Platteville. It is the second time Yang has been named a recipient of the scholarship. He is the second student to be awarded the DME Plastics University Scholarship twice since the program's inception.

 

Each year since 2008, DME has offered this scholarship program to help finance, encourage and support the future of qualified students who have interest and potential in moldmaking, plastics and related career fields.

 

“DME is committed to advancing training and education within the plastics industry by continuing to support the DME Plastics University Scholarship Program,” said Dean Froney, DME v.p. and GM. “As one of the preeminent leaders in the industry, it’s both our obligation and in our best interest to help develop and groom tomorrow’s moldmaking and plastics industry experts.”

 

o qualify for the scholarship, students must be enrolled in a plastics program at any accredited trade school or university with a two-year certificate, two-year associate or four-year bachelor’s degree program. Applicants who are enrolled in related coursework are also considered if they demonstrate a strong academic emphasis and interest in plastics.

 

Along with an application, students are required to submit a transcript, personal statement and recommendations for review. The DME Plastics University Scholarship Program selection committee considers a variety of factors including academic achievement, interest in the field and personal qualities to determine the winners.

 

DME and other major manufacturers continue an attempt to combat the trend of students shying away from manufacturing disciplines. With an aging population of skilled workers, the plastics industry is facing a major human resources challenge. The scholarship program is just one of the ways DME is taking action to support the ambition of college students who have shown interest in the plastics industry.

 

The company also offers grants and scholarships to its customers for continuing education, an extension of the popular DME Plastics University on that was created to aid new plastics industry students and professionals.

 

DME scholarship applications for the spring 2015 semester are available here.

 




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