Companies supplying equipment for packagings are finding themselves grappling with precisely the same pressures as their customers in an increasingly integrated marketplace
Ask any UK manufacturer what market forces are currently putting the greatest pressure on its profit margins and the answer is unanimous - the strength of sterling. The valves, fitting and handling equipment industry is, like the rest of the industrial packaging industry, becoming increasingly global in nature as its customers do the same. Producers in the UK must be able to supply companies not only in the rest of Europe but often throughout the world.
Mark Newton, general manager of the Essex, UK-based LMK Engineering, says the adverse exchange rate is reducing business opportunities for his company in Europe and it is looking to expand into new markets elsewhere to offset this. Jean-Frédéric Frot, marketing director at Fort Vale Engineering, says the strength of sterling is the biggest challenge it faces. "To ensure we remain competitive," explains Frot, "we are continuing with our investment in automatic machinery and we have a permanent product development and production costs review programme in place".
Fort Vale, which offers a complete range of equipment for most types of metallic intermediate bulk container (IBCs), clamped and bolted manlids, pressure and vacuum safety relief valves, discharge ball valves and butterfly valves specifically adapted to fit IBCs and adaptors and fittings for tank to hose connections, is confident that a significant part of existing drum traffic will be replaced by IBCs and takes comfort in this. "We supply the 'upper end' of the market in terms of quality and performance," says Frot. "We feel this section of the market will carry on growing at an interesting rate and intend to follow our customers' requirements closely to ensure that we develop our products to help them improve their overall efficiency." Testament to this intention is the recent completion of a new lost wax casting foundry on its premises in Lancashire; the introduction of robot welding systems for the manlid manufacture; and the introduction of a new type of butterfly discharge valve, the Twistdisc.
LMK Engineering recently introduced some innovative new products of its own - a flexible heating jacket for drums and IBCs of most dimensions and induction heaters for drums. Water repellent, resistant to water vapour and non-halogen flame retardant, the jackets have an adjustable thermostat ranging from 0°C to 180°C and are suitable for plastics, fibre and metal 25 to 205-litre containers. They can also be custom made. Its Thermosafe induction drum heater for hazardous areas is the only induction drum heater approved by British Approvals Service for Electrical Equipment in Flammable Atmospheres (Baseefa) for use in zones 1 and 2.
According to Newton, the company has also experienced a higher turnover this year than in the past two years. This, he says, is largely attributable to new business generated from the company website. LMK has reportedly adapted its business plan to accommodate forecast growth.
Ellen Cartlidge, office services manager at Newson Gale, also admits the foreign exchange rate is the biggest factor affecting profit margins. Despite this, the Nottingham-based company reported a "steady increase" in overall sales which, thanks to a new self-testing static grounding clamp, is expected to increase in the next six months and throughout 2002. The newly designed and patented Bond-Rite helps prevent static-caused fires and explosions by continually testing its connection to drums, containers and other mobile plants. It has been developed to enable static bonding connections to be continually checked and verified in flammable atmospheres. International safety standards dictate that static grounding and bonding clamps are required wherever mobile or portable conductive plant items such as drums, containers or vessels are used in hazardous areas. As these often have coated surfaces there is a tendency to compound in use due to build-up of further insulating layers. According to Cartlidge, these conditions can easily impair the effectiveness of the static-grounding clamp selected, but it is virtually impossible to know this just from visual inspection. She explains, "Bond-Rite combines the benefits of a purpose-designed grounding clamp with self-contained monitoring electronics and feedback via visual indication. The Bond-Rite continuously tests its own connection and verifies when a low resistance static dissipation path is achieved." Suitable for most hazardous area static grounding applications, Newson Gale claims the Bond-Rite enhances safety and security across the whole plant.
Like Fort Vale, Empteezy, the Scottish producer of sump pallets and steel and plastics bunded storage units, predicts a growth in the use of IBCs over drums and plans to continue to ensure it has "the products to suit the market," says marketing manager Andrew Lawrence. To ensure all its products continue to meet all current and impending guidelines and regulations its new rotational moulding plant recently became an ISO14001-certified manufacturer.
Michael Hughes, technical director of Dorset-based ChemSafe Containers says he sees the IBC market increasing as tanker/bulk requirements decrease. "We envisage introducing new products to reflect the changing market," he says. The company already produces GF or Seal Tite valves for IBCs and quick-release camlock couplings and plans to roll out Seal Tite threaded couplings soon.
The company claims it has experienced continued growth in 2001 due to increasing business in many markets in which it is involved - mainly chemicals, oil and food industries in the UK and certain EU countries. "Future changes will occur for reliable multi-trip IBCs," Hughes predicts. "There are always new opportunities for new targets and we will continue to develop them."
Francis Ward supplies cap taps, pouring spouts, closed discharge systems, hand discharge pumps, cap spanners and thread adaptors to a predominantly UK customer base. Commercial manager Jonathan Wurr says the company is currently opening distributorships and partnerships in Europe, Australia and US.
The climate on the other side of the Atlantic is a very different one to that currently being experienced in the UK. Specifically, US producers are not in the same predicament with regards to an unfavourable exchange rate as their UK counterparts. According to Howard Z Skolnik, president of Skolnik Industries, the biggest issue facing manufacturers in North America is the proliferation of mergers, acquisitions, buy-outs and take-overs in the packaging industry which have left few small companies unscathed by management changes. The Chicago-based producer of dangerous goods containers considers adapting to change a positive growth characteristic. Skolnik Industries, he says, continues to adapt and evolve as a niche packaging manufacturer serving the global marketplace.
"Unlike most manufacturers which are focusing on down-sizing their product range or altering their management style," Skolnik explains, "We are taking the reverse path of the trend." Among some of these new products and benefits is expansion of its container types to offer carbon, stainless, galvanized and plasti-coated steel containers in 5, 8, 10, 16, 20, 30, 55, 85, 96 and 110 US gallon capacities (19, 30, 38, 60, 76, 114, 208, 322, 363 and 419 litres).
With harmonisation of multimodal regulations in progress, Skolnik offers assistance in regulatory research. Responding to total asset-tracking requirements for dangerous goods, radio frequency identification data (RFID) tracking capabilities will be introduced to monitor and validate inventory and proper disposal. In late 2001, Skolnik will introduce the Test Wizard - a software program designed specifically for testing compliance of dangerous goods containers.
"Good things come in small companies," proclaims Skolnik. "They can respond quickly to sudden market opportunities, they are able to quickly modify procedures to meet individual customer requirements, and the employees of small businesses generally are more able to go to extremes for their customers."
Tim Girard, managing director at Girard Equipment, believes "one change that is obviously looming in the US" is the phasing out of lead as a relief mechanism on pressure relief caps. After 40 years producing a cap which contains a lead-based fusible material, Girard Equipment, with help from various metal IBC producers, has developed a fusible cap which does not employ the use of lead.
Girard Equipment also manufactures pressure and vacuum relief devices for IBCs. "We are the leading producer of a heat sensitive relief valve commonly referred to as a 'fusible cap' that allows for emergency venting of the container should there be a fire," explains Girard. "The valve has received particular attention from chemical shippers who produce high purity chemicals in need of a valve that will relieve the internal pressures of the tank, both pressure and vacuum, while being capable of being hermetically sealed and employing the use of barrier/tamper-evident cargo seals."
German producer of rubber seals for plastics and metal open-top drums, Leeser Gummiprofile, finds its profits affected largely by the price of all oil-related materials, which have increased in the past two years. It also reports the cost of the polymers it uses has increased too. "As Leeser has a very active strategy for saving overall costs we do not face too serious a problem concerning this matter," says Ferry van de Pasch, sales manager at the company. "We have had a similar commercial performance this year to 2000 but, like the rest of the European economy, expect slightly lower results during the second half of the year."
Supplying the drum, automotive, building, lighting and electronics industries mainly in Europe, but also the US, Russia and Africa, Leeser has plans to target eastern Europe and the UK for further development in the next two years. "We see further standardisation in the drum market, which we have foreseen and standardised excellent sponge rubber seals in all sizes in anticipation," van de Pasch says.
Despite its customers' markets developing in similar ways at comparable rates throughout the world, developments in the industrial packaging equipment sector are very much dependent on the geographical location of the company. While, in the UK, companies are battling unfavourable exchange rates, in the US the biggest threat to a producer is being taken over by a bigger producer.