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The Last 45 Years

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I have been in the Industrial Blow Molding Market for over 45 years. Most of this time has been in the machinery portion of the industry.

Every 10 years or so, there were tough times for one reason or another. Take a look at this cycle below:

1973/74:

Material/Gasoline shortages and claimed storage offshore on large ships drive up material cost.

Uniloy built molds for very lightweight bottles (milk) to survive.

1981:

New Machine Sales stopped. You could not even sell used machinery.

1990/1991:

Again Machine Sales stopped.

However, more new machines were sold in 1995 than any other years since the early 1960’s.

2000/2008:

There was almost a whole decade of the worst period ever and nearly 10 years in the making. The typical total USA market ranged from a low of 50 machines to a maximum of 150 machines a year. There were some used machines sold during this period.

Now the industry is fortunate to sell 10 new machines a year. There are a lot of used machines sold between 20 to 35 machines a year during this long period.

WHERE DO THE PRODUCERS FIT IN ?

What about the producers of Industrial Blow Molding parts? Just what are they doing?

Please see the following chart as researched and produced by Plastics News every November since 1994. My record keeping starts at year 1996.

PLASTICS NEWS REPORTS

YEAR

TOTAL SALES ($ BILLION)

RESPONDENTS

BOTTLES %

INDUSTRIAL %

EMPLOYEES

2008

16.9

148

77.6

22.4

N/A

2007

16.5

158

75.6

24.4

N/A

2006

16.1

164

74.6

25.4

N/A

2005

N/A

N/A

N/A

N/A

N/A

2004

13.5

175

71.7

28.3

N/A

2003

12.9

182

71

29

49,058

2002

12.6

174

71

29

47,885

2001

11.9

184

70.1

29.9

49,628

2000

11

193

72

28

50,027

1999

9.87

194

76

24

48,408

1998

N/A

N/A

N/A

N/A

N/A

1997

N/A

N/A

N/A

N/A

N/A

1996

3.39

189

81.27

18.73

42,672

You quickly see an increase in sales volume for every year including 2008. The respondents go from a high of 194 in 1999 to a low of 148 in 2008.

There have been a number of consolidations and some bankruptcies. The Industrial market ranges from a low of 18.7% in 1996 to a high of 29.9 in 2000 for the sales numbers shown on the charts.

These numbers do not include several large Captive Blow Molding Corporations. In most years, the same companies did not respond to this report.

We all know about the financial bliss bailout of the Big 3 Automotive USA car makers. If you look at the Plastics News List, you will see that there is a strong reliance upon the automotive market by USA producers. Of course, some of these companies also provide goods to the Japanese Automotive Companies doing business in the USA.

Look at these stats for companies doing work for the American Auto Parts Producers. Some of these companies only do automotive parts work. Other plants do various types of custom blow molding.

Companies Ranking
2 Top 10
5 Top 25
14 Top 50
25 Top 80
30+ Top 100

This is a total of 30% + of the top 100 companies that do work for the automotive builders in the USA.

If the Big 3 goes down where does this leave these companies? What is next for these plants?

I have listened to several options. Several blow molding companies have folded in the last 2 years. What about the machinery builders? Can they survive this mess?

Maybe Julie Brown of Plastech fame did get the last laugh at the BIG 3 PLUS with her bankrupted company.

Yes, I do remember when the USA Machinery Companies did not have any real available money. They still developed innovative machines and their customers were willing to take a chance to get a couple of years lead over their competitors.

They not only took the chance but actually were willing to fine tune the process and equipment.

Many of these small companies were very successful and the owners became millionaires and retired.

Those customers also demanded a machine that would be up to date for their current needs and options.

A couple of years ago, I visited a Chinese machine producer. The machine they were producing could not meet the needs of the USA processor and their specifications.

Even though the Chinese machine were inexpensive there were many missing basic items.

I made up a list of items about 4 or 5 pages long. This list was what the processor wanted/expected on the equipment when it arrived in his USA plant.

The Chinese machines did not have these items or components. I am sure that this would require much more costs to supply the Chinese machine as desired.

Perhaps, I have been in this business too long. However, I still have dreams that the USA can be very innovative and there are many opportunities to grow this business. There has not been any real development in techniques in a while.

The current design of PC controls leads the machine developments in the right direction. It is easy to understand and functions very efficiently.

Today’s machines are producing at a higher level of production. The parts and cycles are definitely more consistent. Older machines will not produce on the levels of today’s machines.

There are also energy savings to achieve every hour of production. The result is more money on the bottom line for the blow molder. Just ask and these savings can be justified.

Changeover times such as material and color changes can now be consistently done in the matter of one hour or less as compared to 8 hours or longer. This is money saved with more up time to raise the production yield level.

Modems back to the machinery builder’s plant assures more up time as the machine can be troubleshot in many cases without visiting the processors plant. This does work.

New machine payback is very rapid when yields and efficiencies are high. When did you last check how much it costs you to run your old machine? You will be surprised with the numbers.

Also, the machines are more flexible on the various types of parts, colors and materials that can be run on them.

Any thoughts? Look forward to hearing your comments. Just respond below.

Thanks

Robert S

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