Packaging Machinery Shines at Pack Expo 2000

In this show report, you'll see some of the latest packaging equipment advances. E-commerce increases demand for cartoning equipment.

Packaging Machinery Shines at Pack Expo 2000

Packaging machinery growth rates are moderate but steady. Cartoning equipment sales reflect increases in e-commerce.

by Clyde E. Witt, executive editor

The packaging industry’s biennial extravaganza, PackExpo, always introduces the newest in machine designs, function and strategies.

Pack Expo 2000 was no exception. Activity on the show floor was brisk, demonstrating healthy activity in the packaging industry.

Packaging machinery has been on a long up-curve and that couldn’t make manufacturers happier. According to the Packaging Machinery Manufacturers Institute’s (PMMI) recent Quarterly Market Trend Report, total bookings of packaging machinery increased 2.7 percent during the second quarter of 2000, and that upward trend is expected to continue.

According to the report, the moderation rate at which new orders were placed followed a flourish of activity in the first quarter.

Another report, this from the Freedonia Group, Packaging Machinery — Private Companies Report, indicates that private companies play a significant role in the $5 billion U.S. packaging machinery industry. Each of six private firms generates packaging machinery sales over $75 million. Two of these firms, Barry-Wehmiller and Crown Simplimatic, have worldwide packaging machinery sales of at least $200 million and are among the five leading U.S. packaging machinery producers overall.

In addition, 12 other private companies have total corporate sales of more than $75 million; however most of these firms have substantial packaging material and other manufacturing operations.

More than 500 private companies manufacture packaging machinery in the U.S. This high rate of participation is supported by the wide range of products (more than 100 types of machines, as well as machine parts) and the diversity of applications. Due to the range of products, few packaging machinery companies (public or private) supply anything approaching a complete line of products, and, thus, the market is fairly fragmented.

According to the Freedonia Group study, U.S. packaging machinery demand is forecast to rise five percent annually to $6.4 billion in 2004. Continuing demand for more efficient machinery, coupled with technological and performance improvements, a healthy replacement market and an increase in labeling regulations, will spur growth.

Technological improvements include the increasing use of microprocessor controls and touch screen interfaces, improved compatibility of specific machines, increased output levels and multi-functional machines.

It is expected that machinery shipments will lag demand growth, advancing four percent annually through 2004, as the U.S. trade gap continues to widen.

Role of used equipment

E-commerce has taught companies that the packaging line must be flexible and scaleable. Many are learning that the best way to achieve these goals is by renting or buying used equipment.

"With a new product you want to be first on the retail shelf," says Rich Frain, founder, The Frain Group, a company that’s been in the used machinery business for two decades. He says the customer can have the production line up and running on used equipment while the OEM is building the new machinery.

Another advantage of choosing used equipment — at least temporarily — says Frain, is that it gives the customer an opportunity to try various brands before he buys.

"Another ideal rental scenario," he says, "is the company that wants to test market a product and make sure it’s a success before wrapping up large amounts of capital in new machinery."

The Web

Another area of activity for packaging manufacturers is the Internet. More companies are finding commodity products that sell well on-line. An example is Sealed Air Corporation. At PackExpo it was discussing purchases through its Web site of Instapak Quick, a new void-fill product ideal for small and mid-sized companies that need protective cushion packaging.

For more information on the transport packaging market, go to PMMI’s Web site at www.pmmi.org. MHM

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