Sales of injection molding machines built by Sumitomo (SHI) Demag Plastics Machinery GmbH are forecast to surpass pre-pandemic levels and could reach an all-time high in 2021 as demand continues to increase for all-electric models.
The Schwaig, Germany-based company expects sales to hit 808 million euros if this year's trend continues.
Sumitomo (SHI) Demag sells about 7,000 presses annually and is the third largest injection molding machine builder in the world behind Haitian and Engel.
The medical and packaging markets comprise about two-thirds of sales and the electronics market has picked up, according to Sumitomo (SHI) Demag CEO Gerd Liebig.
"We are very close to the fight against the pandemic," Liebig said of the medical market. "We offer many solutions in the US, Europe and China for the whole range of possibilities for test for coronavirus and now the vaccination campaign. For customers in Europe, the main focus is pipette tips and we are very strong in this."
Medical and electronic processors prefer all-electric machines to avoid use of hydraulic oils and for energy efficiency.
"The market direction is to go to all-electric machines," Liebig said. "The ratio all over the world is increasing, particularly for medical and electronic. For the United States and Japan it's very high. In China, it's also now increasing."
In the electronic segment, half of Sumitomo (SHI) Demag' customers serve the automotive market and half produce building-related products, such as lighting, Liebig said.
"When these customers buy, they tend to buy a high number of machines," he added.
Meanwhile, the packaging market is under some pressure right now because of higher resin prices for materials like polypropylene and polyethylene. Liebig said the company is seeing some hesitation to invest.
"In packaging, the material price is very important," he said, noting this market dynamic could keep the company from setting an all-time highest sales rate.
If that's the case, sales would likely be about 800 million euros, which would be about the same as the 2018 record year.
Through the pandemic, Sumitomo (SHI) Demag has maintained a workforce of about 3,000 employees.
"So now it's possible to increase very quickly our production capacity," Liebig said.
He expects the move toward tethered caps to create new demand for the company.
"Customers are investing in molds. I see the trend. That will start the end of this year and it will influence the packaging industry in the next year," Liebig said. "We are No. 1 in packaging in the world. We are extremely strong in thin walls and the caps and closures."