German plastics equipment sector resurgent in 2010 - VDMA

The VMDA, the body representing the German machinery and industrial equipment makers, said orders for the plastics and rubber industries had doubled between September 2009 and June 2010.

In the first half of the year, orders from customers within Germany were up by 26 per cent, while demand from abroad climbed by 117 per cent. Orders from the Euro area showed an increase of 51 per cent, said the association.

"No one could have foreseen the 85 per cent jump in orders recorded by the industry in the first six months of the year; it is a truly remarkable performance that gives grounds for optimism,"​ said Ulrich Reifenhäuser, chairman of the Plastics and Rubber Machinery Association.

Packaging​

The upward trend includes machinery for the plastic packaging sector – although the boost here has been less pronounced than in the automotive and construction industries, which were hardest hit by the recent economic recession, VDMA managing director Thorsten Kuehmann told FoodProductionDaily.com.

“Plastic packaging machinery has followed the positive trend – but just not to the same degree,”​ he added. “Consumer packaging did not see such a deep decline and has therefore not experienced the same jump as the other two major industries in this sector.”​

The volume of orders in-hand has also expanded substantially and now stands at 6.3 months, compared with just 4 months this time last year.

Sales lag​

While orders are booming, the picture for sales is mixed with revenue “lagging behind”. ​Total year-on-year sales for H1 2010 dropped by three per cent and sales from within Germany fell by almost a quarter. However, sales to customers outside Germany rose by seven per cent, with those to the Euro area up by four per cent, said the VDMA.

“The relatively high level of domestic sales during the same period last year explains the 23 per cent decline this time around​,” said Kuehmann.

The fact that final payment for machinery naturally lags behind orders, means that sales from the first six months of the year represents lower order activity for the second half of 2009, he explained. Sales figure in H2 2010 are therefore expected to bounce back given the turnaround in orders in January to June.

“In the light of the marked rise in incoming orders, we expect sales to grow by 11 per cent by the end of the year,”​ he said.

Outlook​

The association said a sense of optimism had returned to the industry given that “demand for German machinery is up very sharply in all sales regions”. ​The number of firms citing a lack of orders as a problem has fallen by 66 per cent and job losses in the sector have also decreased.

The VDMA said the forthcoming K 2010 trade show was being seen as an opportunity by domestic companies to cement the sense that the recovery was progressing strongly.

“German manufacturers are looking to the leading international trade fair for the plastics and rubber industry for confirmation that the growth rates of the last few months are not simply the result of pent-up demand but reflect a solid volume of business that is set to stabilise based on regional cycles,”​ said Reifenhäuser.