Gondolas, growth and gaining momentum

At the recently held EUROMAP General Assembly in Venice, the member associations gave a positive outlook for Europe’s plastic and rubber machinery manufacturers; despite disappointing results from the BRIC countries.

Against the backdrop of the beautiful city of Venice, the landmark setting of the Hotel Danieli provided the meeting point for the 2015 General Assembly of EUROMAP – the European Association of Plastics and Rubber Machinery Manufacturers.

The setting housed a discussion as to the current, past and future state of business for almost 1,000 manufacturing companies in the nine EUROMAP member countries of Austria, France, Germany, Great Britain, Italy, Luxembourg, Spain, Switzerland and Turkey.

Together, the output of these nine member countries amounted to amounted to €13 billion (£9.6 billion) in 2014, a year-on-year increase of 1.9 percent. In the same period, global exports from EUROMAP countries rose by 1.6 percent to €9.7 billion (£7.2 billion). EUROMAP forecasts a two percent increase for the current year with output rising to €13.3 billion (£9.8 billion).

“We are meeting after three years in a very interesting moment, a period in which are sales and turnover are at their highest levels, but at the same time, there is an equally high level of geo-political uncertainties and pitfalls,” commented EUROMAP President, Luciano Anceschi.

The growth, however, was in spite of the fact that the predicted sales growth from the BRIC group of countries, namely Brazil, Russia, India and China, some years previously, had not come to fruition.

“The performance of those markets did not meet our, or our manufacturers’ expectations,” said Anceschi. “The shortfall mainly resulted from a slump in demand in Brazil and an even sharper drop in Russia. As for China, the plastics and rubber machinery industry’s development was uneven and needs to be closely monitored. India, on the other hand, is giving cause for optimism after a couple of years of declining exports.”

Holding its own

Helmut Heinson, EUROMAP Vice President, commented: “Overall, global output of plastics and rubber machinery reached 32.5 billion euro in 2014 with EUROMAP accounting for 40 percent of this total.

“Despite China’s share rising sharply over the past few years, EUROMAP managed to hold its own. The same applies to exports, with EUROMAP maintaining a market share of around 50 percent over the past five years.” Expanding, Heinson put this success down to the expertise of the European machinery manufacturers and the development of machines that were highly technical and precise.

“It takes a certain expertise to build machinery to the quality and performance level that we are offering, and it is exactly this expertise that creates our position in the marketplace,” he added. “We are not even the cheapest, yet we are selling machines. This is because the quality level is right, the flexibility is correct and our machines can be used for extremely high-level technical applications. This is our focus, this is our expertise, and this, to an extent, is what makes us successful in the Asian countries.”

Heinson acknowledged, however, that predictions suggest the technical level of machinery in countries such as China, Taiwan and Korea will increase in the next five to ten years, so that they too are able to provide machines for high-level applications.

“To that end, maybe what we have to learn is to provide products for the commodity market, so that both parts become equal. But, if that is the case, do we have the production facilities that can accommodate low cost commodity machines and, the other way round, does Asia have the facilities to make technical machines?” he asked.

Eastern Promise

This question provided the theme for further presentations looking at the opportunities for European machinery manufacturers in the Asian market.

Firstly, Dr. Peter Neumann, CEO of ENGEL, gave an overview of his company’s own attempt to penetrate the Chinese market with a presentation entitled ‘China: Opportunities for European high-end manufacturers in the middle segment’.

Explaining, Neumann said research that started in 2011 revealed the biggest opportunities for European machinery manufacturers in China were to be found in the mid-market segment. By capitalising on the demand from the country’s burgeoning middle classes for white goods and automotives, the company launched its spin-off ‘WINTEC’ machine in 2014 to provide “a more reliable alternative” to the low-end machines manufactured by local producers.

Despite only identifying Haitian as major competition in this sector in China, Neumann concluded his presentation by encouraging EUROMAP companies to consider entering this market. “China is certainly an important market for all Europeans,” Neumann said. “It is not just ENGEL that can compete in this market,  there is a great opportunity for many companies here.”

India: Adopting a similar approach?

In the last presentation of the Assembly, Rajesh Nath from VDMA India, gave an overview of how the changing economic environment in the country is lending itself to growing opportunities for overseas manufacturers.

The current Indian Prime Minister, whose party is the first to hold a majority in the country for 30 years, is keen to work on developing business relationships globally. “Things are looking brighter for the Indian economy,” explained Nath, highlighting the ‘Make in India’ campaign, amongst others, devised to boost manufacturing in the country.

For plastics machinery manufacturers, Nath said adopting a similar approach to the Chinese market might be advisable, as many manufacturers, particularly in the automotive sector, were looking for the quality of a foreign machine, whilst still being sensitive to price.