Sumitomo (SHI) Demag Plastics Machinery (Schwaig / Germany; www.sumitomo-shi-demag.de) has so far “succeeded in producing continuously over the entire year” despite the pandemic, according to Gerd Liebig, CEO of the German-Japanese injection moulding machinery manufacturer. He outlined the company’s business situation during a virtual version of its traditional press conference for “Fakuma”, a leading trade fair in Friedrichshafen / Germany that was cancelled due to the coronavirus pandemic.

Even with the economic downturn in plastics processing, which has plagued the industry since autumn 2018, the machine maker, with production plants in China and Germany, expects significant growth in incoming orders in 2020. From January to August 2020, orders increased 24% to EUR 183.7m, with the positive development mainly due to an extensive number of multiple machine orders from the packaging, medical technology and electronics sectors, Liebig explained (see Plasteurope.com of 31.08.2020).

“Order intake has been growing gradually since March and will result in an almost full capacity utilisation in the last four months of the year,” he told Plasteurope.com. Liebig conceded that the first quarter had been rather weak in terms of incoming orders and turnover, leaving sales 19% below the previous year. As a result, the chief executive said he expects a decrease of 12% by the end of the year. In 2019, the company achieved sales of EUR 283m. “I expect a decline in sales of around 25% for the entire industry this year,” he predicted.

The group was recently able to benefit from an increased demand for all-electric machines. The company said that 10 years ago, only one in five machines was fully electric. Now, the market share in Europe is 50% for small and medium clamping force sizes. The packaging industry is also increasingly ordering these machines, especially for applications with low and medium injection speeds. The company’s market share has increased significantly to 30% in the segment, the supplier noted.

In the meantime, more than 70,000 fully electric machines made in Japan and Germany have been delivered worldwide. Lately, the all-electric “IntElect” line is also being built in Chiba / Japan to improve global availability.

Although demand from the automotive industry has fallen by almost 70% this year, the company has by no means written off the sector. Large-scale investments are expected for electric mobility. E-cars need to become increasingly lighter, Liebig said. “For this reason, the share of plastics in these vehicles will increase from 8% to 11% within the next three years.”

By contrast, demand for medical technology solutions has increased by almost 50% this year, and the focus has been on applications for in-vitro diagnostics. The increasing need for substitution in the automotive industry and a continuing high demand for machinery from the packaging and medical technology sectors could lead to a slight improvement in demand for injection moulding machines next year; however, a complete rebound from the demand decline is not expected before 2024.

Thanks to a solidarity package approved by management and the works council at the two German sites in Wiehe and Schwaig, the machinery manufacturer so far has not needed to announce any redundancies. At the heart of the agreement are a voluntary bonus waiver for management and all non-tariff employees, and the introduction of temporary short-time work for all employees.

Since 2016, the supplier has invested almost EUR 20m to modernise machinery at the two German factories. The company is currently building a new lightweight construction warehouse with 1,600 m² of floor space in Schwaig.