A return to - something like - normal
ENGEL’s Chief Sales Officer Dr Christoph Steger welcomed a host of press and industry delegates to the Austria-based injection moulding machinery manufacturer’s booth during Fakuma 2021 in Friedrichshafen, Germany.
Steger began by welcoming everyone to the company’s first onsite press conference for what, to him, felt more like 20 years than two. The last time Steger had addressed such a gathering was at K 2019, before all such meetings went virtual. “Thank God,” he said. “We can now return to the real world here at Fakuma.”
Well-known for its ability to adapt to modern challenges, and for remaining abreast of the latest technological trends, ENGEL chose to maintain the digital element for this press conference, as EPPM joined hundreds of attendees in a virtual audience. “I'm only the sales officer,” Steger quipped, “so I have people here to support me in the event of any technical questions.”
He continued in an area more suited to his expertise by focusing on an economic overlook and market trends. The current economic situation, he continued, was on the one hand positive and strong following the pandemic: “We have recovered much faster than we thought and the recovery is ongoing, of course. We’re also catching up with what we missed before, but this does not mean that we have exorbitant growth over proportional growth." On the other hand, there is a high demand for injection moulding systems and the demand has been growing. "At the same time, we are also focusing on the right answers to the challenges that arise from climate change and the need for a circular economy for plastics, as well as for digitalisation – particularly in the automotive industry.”
These rank highly on the ENGEL agenda during Fakuma 2021 through both the tangible and virtual exhibits on display. “We have five machines at our booth,” Steger explained, “but we have also 25 machines and systems that we brought along that we can show on a virtual platform at our booth.”
Going on to discuss how well ENGEL is doing during this post-pandemic phase of recovery, Steger added: “We have been quite successful after the crisis … and we have made use of the crisis to prepare for this situation, to be ready. We can deal with this high demand [but] we don't know what the next six months will bring. We don't know how the world economy is going to change.”
Cautiously optimistic, Steger conceded that it remains difficult to provide a reliable outlook due to numerous risk factors that make it difficult to predict. As an example, he mentioned material and delivery bottlenecks, massive increases in raw material costs, and the cost of the semi-finished products required to produce machines. “The pandemic is not behind us yet … further mutations of the virus could change everything and, for this reason, it's very difficult to provide a reliable forecast.”
Market volatility
The markets have been becoming gradually more volatile for the past ten years, according to Steger, and therefore require a lot more flexibility now than in the past: “We have to be more flexible. Our customers and our suppliers have to be more flexible.”
Since 2018, ENGEL has invested more than €500m in its plants and facilities in an attempt to increase production efficiency. It has furthermore invested €70m in research and development since then. “It was really important to us to make use of the crisis to develop ourselves and to further continue our products.”
The automotive industry has bounced back very strongly, according to the CSO, with September, October and November of 2020 being very strong months for ENGEL, which is now committing itself to “interesting projects”, as Steger described them, with “ambitious goals” that focus on electromobility.
Many plans made by automotive industry manufacturers have gone awry as a result of the past 18 months, meaning that ENGEL’s customers may have to face shutting down facilities due to a lack of consumers buying traditional gas-powered vehicles. This will, in turn, result in storage and logistics issues, which will add to the overarching issue of market forecasting even more difficult.
Sustainability in the economy
Steger was more positive concerning the developments surrounding ENGEL’s injection moulding for packaging opportunities, however: “The packaging industry has been quite stable, and the demand has also been quite stable during the crisis. Sustainability, of course, is something that people have been aware of, but the focus has been less strong in other industries in packaging. The focus on plastic materials used in a sustainable way is definitely on working with new material combinations when it comes to recycling. When it comes to energy efficiency, ‘sustainability’ is again the buzzword.”
Choosing his words carefully, Steger added that, as a whole, the plastics packaging industry has benefited from the pandemic, citing the inability of people to go on holidays as the reason: “[We] had to return to [our] homes and so had money available that [we] usually would have spent on holidays or going to restaurants. [We] used that money for renovating homes or buy new toys and sports equipment. All of that led to a huge increase in the field of technical moulding, and we can still see significant growth in that segment. In the past fiscal year, it's been the biggest share of ENGEL’s sales volume ever, and we have really reached a level where we've never been before.”
It is again well-known that the majority of ENGEL’s focus is on the automotive industry, but moulding for packaging has “caught up”, as Steger put it, and he continues to expect good things for the business in the future.
E-Commerce
“E-commerce is something that we can't do without anymore,” Steger continued. “Teletronics is a really interesting segment because, over time, we talked about saturation levels in smart phones, but the latest smart phones are not the products that we had a few years ago. There has been a certain saturation in the market, which also applies to PCs or tablets – especially during the pandemic – but, of course, computers and tablets were a growing market segment. Particularly in Europe and North America, we have seen a strong growth driven by the increase of 5G technology paired with smart home applications that can control everything via a smartphone or tablet.
“5G is much more than just having faster Internet. 5G will enable us to do things we can only currently dream of. This will lead to investments worldwide and will act as a pushing factor for the telelectronics segment.”
To conclude, Steger addressed the medical industry, which was driven by short-term demands for Coronavirus testing equipment and other medical equipment in order for the world’s medical institutions to be able to handle the crisis. “These demands have now returned to normal levels – more or less – but this does not mean that growth has decreased.”
The medical field, Steger concluded, is continuing to increase as the world’s preferences return to more traditional, more typical medical devices, whether in the field of diabetes or respiratory diseases treatment, and other medical devices for operations that people couldn't undertake during the pandemic. It will therefore be interesting to learn over the next year or two exactly which certain demands have been triggered as a result of this return to something like normal.