Even before the coronavirus started to impact the global economy, the market for tire and rubber machinery was showing signs of strain due to factors such as trade protectionism and a decline in the automotive sector.
Comparing figures for rubber machinery companies that supplied sales figures for the European Rubber Journal Machinery Survey both this year and in 2019 shows a decline of 3.6 percent to $3.08 billion, compared with $3.19 billion last year.
While the decline is quite modest, allied to the basically flat sales recorded last year, the results of this year's survey mark a continuation of a slowdown from the impressive rebound recorded two years ago.
There were mixed signals from China, with combined total sales for the 10 companies supplying data—via the Chinese Rubber Machinery Association—for both this year's and last year's survey coming in 3.2 percent lower at $816.5 million.
On the other hand, the CRMA pegged total sales for the Chinese rubber machinery sector at $1.55 billion, nearly 11 percent higher than the equivalent figure supplied a year ago.
Excluding Chinese companies from this like-for-like comparison shows a 3.1 percent year-on-year decline in sales, to $2.13 billion, for survey respondents based in all other world regions.
Sales for European Union-based tire and rubber machinery makers marginally increased, to just above $1.57 billion this year, after being just under that figure a year ago.
Stable on top
There was a stable look to the ranking by sales of the major tire and rubber machinery manufacturers, with the leading players firmly entrenched in their respective table positions of the last few years.
HF Group maintained a firm grip on the top position, with sales in line with its prior-year figures after currency effects are factored in, though it was in marked contrast to the 15.5 percent growth posted last year.
It is worth noting, however, that the steady sales performance at the Hamburg, Germany-based group was despite the sale of HF's rubber extrusion business to Troester last May.
Sales at rival VMI were, likewise, stable, with the slight dip in its figure essentially due to the different average euro-to-dollar conversion rates for 2019 and 2018 used in the survey.
The Dutch group, therefore, remains in close pursuit of the top slot in the global ranking.
Also maintaining the pressure on HF is one-time table-topper Mesnac, which grew sales by 4.5 percent in 2019 to $271 million, according to the figures supplied by the CRMA. Indeed, group-wide sales, including non-machinery items, grew 12.3 percent to $420.8 million in 2019, Mesnac's own figures show.
Of the two Japanese heavyweights, a flat sales performance by Kobe Steel was enough to extend the gap between it and fifth-place Mitsubishi Heavy Industries, which posted a 23.8 percent decline in revenues for last year.
Just a little further down the table, equipment makers reporting significantly higher sales in 2019 included: Safe-Run Machinery (+11 percent), Cimcorp (+61 percent), Doublestar Mechanical (+22 percent), Marangoni Meccanica (+36 percent) and Gislotica (+35 percent).
Given the clouds over the global economy—not the least of which are international trade barriers and the automotive-market decline–business confidence among respondents to the ERJ survey remains surprisingly high.
Investment intentions also strengthened. Of the companies completing the survey, 84.6 percent said they planned to expand in the next 12 months, while 61.5 percent intended to upgrade facilities during that time frame. Meanwhile, 38.5 percent of companies anticipated making acquisitions of some kind in the coming year.
A good part of that investment, if realized, is likely to be directed to serving the market in India, which was identified as a fast-growing market region by 63.2 percent of respondents, up from 50 percent a year ago.
The Western European market received the same positive rating by 47.4 percent of companies, a slightly higher level than in last year's survey.
Long-time powerhouse China was rated among the fastest growing regions by just 31.6 percent of respondents to this year's poll. This rating was, though, slightly up on the level recorded in 2019.
The Central and Eastern Europe region garnered a rating of 42.1 percent in our 2020 survey, almost matching its solid showing in last year's survey. North America, likewise, registered as a strong market for 47.4 percent of respondents in 2020, up by more than 2 points on 2019.
But perhaps the standout metric in this year's ERJ Machinery Survey is the slump in business confidence among suppliers of rubber processing machinery to the automotive components market.
Asked to identify the strongest industry market sectors for their equipment, just 5 percent of respondents selected the automotive parts sector, compared to 30 and 32 percent in 2019 and 2018, respectively.
On the other hand, business confidence is being shored up by the tire manufacturing industry. Despite the widely reported pressures on tire makers, this sector was rated as the strongest growing market by 79 percent of respondents, up from 70 percent last year.
Another useful marker is business sentiment toward the general rubber goods sector. This market was rated highly by 37 percent of respondents in this year's survey, down from 40 percent a year ago.
Among recent business developments likely to impact future global machinery rankings is the spinoff from the Marangoni Group of off-road-tire machinery supplier Marangoni Meccanica, and its recapitalization, backed by several financial investors.
Rovereto, Italy-based Marangoni Meccanica has set about delivering orders from major tire companies and drawing up future plans, said new CEO Riccardo Mastronardi, formerly of McKinsey and Italian scooter brand Piaggio.
Another significant move saw Troester acquire HF Group's extrusion technology business last May for an undisclosed figure. The acquired unit will continue to be based in Hamburg and all employees transferred to Troester.
"The rubber extrusion business has changed significantly in recent years with customers increasingly asking for complete lines and turnkey solutions," said Joern Seevers, HF Group managing director. "HF Extrusion's technical equipment and scope as well as their international network complement Troester's current portfolio."
Elsewhere, 4JET Group has acquired Hennecke Systems' TIS tires and wheels testing-systems business. The unit is focused on industrial image processing and optical 2D and 3D inspection of tire treads, sidewalls, rims and mounted wheels.
The acquisition enhances our portfolio for the traceability of tires," said Robert Hillmann, managing director of 4JET Technologies. "No matter if DOT code, QR code or other features, we can identify every tire in a reliable way and provide the basis for Industry 4.0 in the tire and wheel industry."