After two relatively lean years, major players are back on a strong growth track in most markets worldwide.
According to the Tire & Rubber Machinery Survey 2018 from European Rubber Journal, a sister publication of Rubber & Plastics News, 2017 saw a significant improvement in the business performance of the international tire and rubber machinery sector, with double-digit sales gains recorded by most manufacturers.
There was a 15.5 percent year-on-year increase in sales across the companies responding to ERJ's survey of suppliers of manufacturing equipment for the tire and rubber products industries.
Combined sales for the 36 repeat respondents totaled $3.77 billion, compared to $3.26 billion in the 2017 survey. Indeed, the gains reverse a downward trend seen over the last two years, which has included marked declines among many of the larger players.
Overall, the improved sales figures confirm the high levels of business optimism recorded in the 2017 survey when 76 percent of respondents said they planned to expand and 55 percent to upgrade/modernize their facilities. This buoyancy, however, may now have peaked, judging by the significant fall in the number of people ticking the latter option on the 2018 survey.
While there is little change at the top of the survey ranking by sales—with the HF Group (Harburg-Freudenberger Maschinenbau GmbH) holding on to the top position—the gap between HF and its closest rivals has narrowed, despite business growth of almost 10 percent at the German group.
With annual sales coming in more than 19 percent above prior-year levels, VMI has continued its steady push toward the top position in the rankings.
Then there is the resurgent Mesnac, which is clearly recovering from what had been a steady decline in business, since it took the top position in our ranking of machinery makers by sales in 2015.
Based on figures supplied by the Chinese Rubber Machinery Association, Mesnac sales lifted by a massive 58 percent in 2017. This compares to a fall of around 35 percent a year ago, suggesting recovery has taken hold among its customers, both in China and overseas.
The CRMA figures cover Mesnac rubber machinery business only. Figures from Mesnac for the group as a whole—including products other than rubber machinery—put the Qingdao, China-based group's sales for 2017 at $399 million, 40 percent higher than last year.
Overall, the Chinese rubber machinery sector contributed to the general upswing. Sales for 14 companies—for which CRMA provided figures both this year and last—rose 19 percent year-on-year to total $1.13 billion for 2017.
This suggests that there has been a significant return to growth among Chinese machinery producers after three fallow years following the imposition of tariffs on exports of tires from China, particularly to the U.S.
This year's survey again confirms the findings from 2017, when 42 percent of respondents identified China as a fast-growing region for their rubber machinery businesses. Optimism for the Chinese market has increased to a 46 percent rating among respondents this year.
By contrast, much of last year's positivity about prospects in North America seems to have dissipated. The region was rated as a fast-growing market by 46 percent of companies, compared to 73 percent a year ago. This is surprising given the recent project announcements in the U.S., and may reflect wider concerns about political and economic developments in North America.
Western Europe was identified as a fast-growing region by 42 percent of respondents, compared to just 38 percent for central and Eastern Europe—up respectively from 40 percent and 27 percent in 2017. Meanwhile, sentiment around the rubber machinery market in India, at 46 percent, came in just slightly above last year's level.
In terms of market sectors, the tire industry increased its position as showing the best prospects for business growth in 2018—up several points to a very dominant 75 percent in the 2018 survey.
Looking at some of the top players, Possehl Group—the parent of HF—reported a significant contribution to profitable growth by its 'elastomer plants' business unit in 2017.
The tire and rubber machinery business benefited from a "booming global automotive business," Lubeck, Germany-based Possehl said in its financial results.
VMI's parent group TKH, meanwhile, reported higher orders for its manufacturing systems sub-sector, which includes the tire and rubber machinery makers. Increased orders were driven by both the continued recovery in order intake from China and growth in the market share among the top-five tire manufacturers, TKH reported in its 2017 results.
"The share of engineering increased significantly because we sold a relatively high number of newly developed machines … and due to client-specific developments for the top-five tire manufacturers," TKH said.
Looking forward, the Dutch group said higher orders combined with new machines and the increased penetration among the major tire makers "will require a relatively high level of engineering activity, but also offer (prospects) for growth."
View from Japan
Ahead of its full-year financial results, Kobe Steel expects a significant year-on-year increase in annual sales, company executives said in an interview at the recent TTE trade show in Hanover, Germany.
Kobe Steel sees markets for its tire and rubber machinery recovering in China, stable in Europe and "positive" in North America, reported Hiroki Toyoizumi, sales and marketing manager, industrial machinery, of Kobe Steel's Machinery business unit.
Another robust performance was seen in Turkey, where Uzer Makina is this year set to increase the number of production plants from two to four.
The expansion projects will see Uzer Makina separate its production of tire-curing molds and tire-curing presses by moving manufacture of the latter machines into a plant beside its headquarters site in Kocaeli.
Uzer Makina said that it also had acquired its fourth plant, located in Aksaray, Turkey, which will be used mainly for maintenance activities.
At Rodolfo Comerio, business is currently running at a higher level than last year, according to Nicola Fedele, the Italian company's sales manager.
The rubber market, he added, was "stable earlier last year but now is going up. At the start of last year, we discussed and defined many technical specifications with customers, and now they are ready to finalize the order."
Asked about regional market trends, Fedele said: "Europe was positive last year, with many customers requiring new solutions, new machines ... we received many orders from northern and eastern European countries."
The Chinese market, he said, was "a little bit slow" last year, maybe because of tariffs. But he added "now they are starting to come back into the market and we have many inquiries from China."
Carter Brothers, meanwhile, reported that the company is relocating its manufacturing operations to a more modern and larger facility.
"The move will allow us to increase production and offer new products, the Rochdale, England-based company said in comments provided with its 2018 survey form.
Pelmar Engineering said India and Sri Lanka now are coming back as important markets, while growth in Thailand had subsided. Central America looked set to become the No. 1 growth market for 2018, and turnover in the region is expected to increase by more than 25 percent this year, the company said.
"We are expanding our engineering and upgrade capabilities, which will require additional space and manpower," Pelmar said. The company added that it also is in negotiations to acquire two plants related to the tire and rubber industry.