Setting the global scene

(Published October 2007) The German plastics industry, including plastics processing, machinery and materials manufactruring and rubber industry, accounted for an estimated turnover of E87bn in 2006, employing some 430,000 people.

The industry has enjoyed a strong start to 2007. Plastics and rubber machinery makers report an 11% sales increase on the first half of 2006, plastics processors are reporting a 9.9% gain, and plastics materials producers 9.6% growth.

Plastics processors, with 276,000 employees and a total production value of €49.3bn, account for the largest part of the German plastics market in both people and value terms. Plastics material manufacturing employs almost 51,000 people and accounts for turnover of €22.2bn, while the rubber industry employs 73,000 people and generates output valued at €10.9bn.

German plastics and rubber machinery producers sold equipment – excluding moulds and dies, materials handling and priniting equipment – valued at €4.9bn in 2006, up by 5.5% on 2005. Exports, at a value of €3.6bn, accounted for more than 73% of the total machinery business – and explain why K is so important to the German plastics machinery sector.

At an industry briefing ahead of K 2007, Dr Reinhard Proske, president of the GKV plastics processors’ association said: “Germany is the strongest plastics location in Europe. Except in the building industry, that had worse performance in the second quarter than in the first quarter, use of plastics has grown markedly and continues to grow at a faster rate than the domestic economy”.

Looking ahead, Proske sees the light weight of plastics contributing to further growth on the back of increased concerns over energy consumption and carbon dioxide emissions.

The automotive industry is likely to remain a key market for the future. Plastics account for 15% of the total average weight of a modern car – equivalent to some 3,000 parts per vehicle. Proske claims that replacing a further 200 to 300 kg of conventional materials with 100 kg of plastics means a 750 litre reduction in fuel consumption over 150,000 km.

There are also opportunities in home insulation and packaging. He says in the latter area the weight of a pack has been cut by an average of 28% over the last 10 years, so packaging today accounts for less than 2% of packed product weight. That trend will continue.

Despite this growth, Proske says the industry faces challenges. The number of employees grew by 2% in the first half 2007, but the processing industry in particular is suffering from a shortage of trained professional staff. The EU’s REACH legislation is also of major concern – see page 47 for more information – and could threaten availability of some substances the plastics industry depends on.

Some threats come from the German government itself. Proske warns that the “Funktionsverlagerung” proposed tax on gains and potential gains made when German-based companies move production abroad “cannot function in an international market”. He warns such a move will hinder innovation and discourage investment in Germany.

Design theft and counterfeiting are a growing concern today, too. And not just for plastics product manufacturers. VDMA plastics and rubber machinery association managing director Thorsten Kühmann says production equipment is being increasingly copied by competitors, mostly in China but also elsewhere, prompting the launch of the Pro-Original campaign. The Italian plastics and rubber machinery producers association Assocomaplast has a similar campaign running to promote original Italian technology.

Using international reported data, the VDMA estimates the worldwide production value of core plastics machinery for 2006 amounted to €19.59bn (up 5.3% over 2005). Germany claims to lead the global market with a 24.9% share, but the Italian market has for the first time fallen behind China, which now accounts for 13.7%. Italian producers have fallen back to third place with a 12.4% share, leading the US share of 9.3% and Japan’s 8.8%.

According to data from Assocomaplast, the Italian manufacturers produced plastics and rubber machinery and equipment, including moulds, worth €3.85bn in 2006, up by 4% on the 2005 result of €3.7bn. Full sector breakdowns are only available for 2005, when the data shows injection moulding machinery accounted for 10% of value, extrusion 9.8% and blow moulding 4.7%. Moulds accounted for 22.9% of 2005 production.

It is not possible to make direct comparison between the Italian and German data due to the differing reporting mechanisms. However, the VDMA estimates that injection moulding machines and extruders accounted for 17.8% of 2006 production value, blow moulding machines 6.6%, foam machines 5.9%, compounding machines 3.8% and thermoforming machines 3.5%.

The VDMA estimates the world export trade in plastics machinery to amount to €14.4bn, and it says Chinese producers have also gained share here. China now accounts for 5.8% of the world export market, up from 4.5% in 2005. Germany’s share is marginally down from 25.0% to 24.9%. However, Japan, Italy and the US have seen bigger declines in their share – Japan to 12.8%, Italy 10.7% and US 7.0%.

Haitian, in particular, is becoming a force to reckon with in export markets. The company has long claimed to be the world’s largest injection moulding machine producer in volume terms. Haitian board member Professor Helmar Franz says the company believes it jumped in 2006 to number four position in value terms, overtaking Toshiba to sit behind Husky, Engel, and Krauss-Maffei.

Haitian claims to have produced 18,000 machines in 2006 and reports turnover up 20.6% for the first half of 2007. Around 30% of its sales are export, with the largest markets being south-east Asia at 27%, Eastern Europe at 26%, South America at 19%, and Middle East 14%. Western Europe accounted for 6% in 2006.

Franz says Haitian estimates the world injection machinery market at 98,000 machines in 2006. China accounted for 50,000 units, the rest of Asia 21,300, Europe 10,000 and the US 5,000. Haitian claims to have supplied 1,000 machines to Europe, supplying mainly to Italy, Turkey, Russia and Poland.