‘Engel has sky-rocketed out of the crisis’, says CEO Engleder

Engel painted an optimistic picture for the current fiscal year at the press conference organised by the company ahead of its e-symposium 2021 event, on 21 June.

The Engel Group reported 1.1 billion euros in sales revenues for the fiscal year 20/21 - down 15% compared to the previous year, but, with an expected growth in the order of 20% for the current fiscal year, the company is well satisfied, said CSO Christoph Steger. “We have an order backlog not seen since 2018,” he added. “We still employ 6400 people at our locations and the demand for plastics remains strong and robust.”

With the outbreak of the Coronavirus pandemic last year, combined with an automotive industry that had already been subdued for the past two years, the outlook seemed bleak. In November, however, something changed, said Steger. Demand from the automotive industry picked up, due to the introduction of new drive technologies and solutions, making sustainable mobility the driver for transformation in this industry. Regardless of which alternative drive technology will prevail in the long term, the proportion of plastics in automobiles will continue to rise. Lightweight remains a key prerequisite for sustainable mobility and requires innovative injection moulding solutions.

“Carmakers needed time to adapt,” CEO Stefan Engleder pointed out. “Now everyone is launching new models, and all the OEMs are boosting their product lines.”

Sales in the packaging, electronics technical moulding and medical divisions were also on the rise, with 5G as a driver for the electronics business line, while for packaging, once again, this was clearly sustainability, Steger said.

Sustainability, he emphasised, is far more than a hype. “It is part of our identity,” he said.

The regional distribution of sales at the end of the 2020/2021 fiscal year clearly reflected the impact of the crisis. Europe contributed 45 percent of Group sales revenues, well below the previous year's share of 54 percent. The Americas accounted for 30 percent – compared to 25 percent the year before – and Asia for 23 percent, compared to 20 percent the year before.

"The Americas and Asia – and China in particular – were the first to see the economy pick up again, and strongly," noted Steger. "But meanwhile, Europe is also clearly back on track."

Challenges to overcome

The current volatility of the markets and materials shortages are just two of the factors that are creating uncertainty in the market.

According to Steger, plastics are and will remain the material of the future, as reflected in the strong and, above all, fast-growing demand. Nonetheless, the company must be prepared to be able to respond flexibly to developments.

"We have geared up for crises," added Engleder. ”Our global production network, and the stronger focus on decentralised expertise in sales, service and processing engineering help us to act in a versatile way."

And, while lockdowns in individual countries, and travel restrictions with quarantine rules continue to make daily business difficult, the biggest challenge at the moment is delivery bottlenecks in raw materials and components. Although Engel is able to ensure global delivery capability thanks to its international network of plants and the dual-sourcing strategy established several years ago, the cost gap is continuing to widen.

“Transportation costs are soaring, we’ve seen a 30% increase in casting costs and double digit rises in the drive systems costs. The supply situation will see us face a couple of challenges in the next few months", said Engleder. “The markets are overheated, and rising inflation is aggravating this effect. This will also have an impact on prices in machine manufacturing."

’Digitalisation is the enabler of sustainability’

As a supplier, Engel’s sustainability focus is directed at functioning as a strong partner for its customers, offering a portfolio of products to create sustainable solutions and playing a role in the materials circle. “We want to be a part of the circular economy,” said Engleder.

However: ”Sustainability only works with digitalisation,” he underlined.
”Digitalisation helps us to leverage the full potential of the injection moulding machine, and to make production more efficient and sustainable by doing so. If we genuinely make use of digitalisation, the CO2 reduction targets set by politicians will suddenly no longer seem impossible."

Engel ’s circular economy solutions are targeted at promoting Design for Recycling, for example through in-mould labelling; the development of machine assistant systems and solutions, such as its suite of IQ products; and the analysis of recycled materials.

“We’ve also developed a two-in-one solution in which we install an extruder upstream from the injection moulding machine, into which we continuously feed shredded plastic flakes or milled plastics from the grinders. The material is degassed, extruded and the output can be directly fed into the plasticising unit of the injection moulding machine. Because no regranulation step is needed, it is a highly energy-efficient process,” said Engleder.

Engel has also established a Digital Solutions Sales Team in which all sales activities for digital products and solutions from the inject 4.0 programme have been combined, giving customers a central contact for all topics relating to the digitalisation of injection moulding production.

Just do it

As both managing directors continued to stress, digitalisation is the enabler of sustainability, but it must also bring value for the customer. “It must provide a return on investment.” However, to gain benefit from the digital solutions available, converters need to make use of them, which may require a mindset change, said Engleder.

To start with, manufacturers need to establish transparency in their production processes, to identify where the biggest potential is. “If a converter uses a lot of recycled material, IQ weight control is low-hanging fruit,” he said.

Both Steger and Engleder agreed that the task may seem daunting. “But you have to start somewhere,”  - and they are confident that Engel’s products, technologies and solutions, are an excellent starting point.
“Together, we will master the challenges that lie ahead well,” Engleder concluded.