Hot runner suppliers: the heat is on

Surveying the state of North America’s hot runner industry is a bit like hearing a good news/bad news joke.

One the plus side, hot runner systems are finally becoming a mainstream product. Processors realize the technology can dramatically improve the quality and profitability of their molded parts, especially in high-volume, cost-sensitive products. And with the average use rate of hot runners in industrialized countries at only 25 to 35 per cent of molds, and much less in developing nations, there is still considerable potential for growth.

On the other hand, the industry is being buffeted by such forces as rising steel prices, growing pressure for on-time delivery, and increased competition from both new domestic shops and top-notch Asian moldmakers.

ECONOMIC CHALLENGES

As with every other Canadian manufacturing segment, the rise of the Canadian loonie is affecting hot runner suppliers — a difficulty coupled with the rising price of steel. “The inflated dollar certainly causes a problem when quoting projects,” said Joachim Neumann, president of J-Tech Hot Runner Inc. “Steel prices are also going up, which translates into one more expense eating away at profits.”

Neumann’s comments are echoed by Robert Butcher, national sales manager with Hasco America Inc. “Both issues definitely factor into our day-to-day operations,” he said. “We’re trying to add value to compensate for this, but the reality is that neither the dollar nor the price of steel is going to change anytime soon, and our industry has to get used to this.”

CROWDED MARKET

Historically, processors have never lacked for good hot runner suppliers to choose from. “The hot runner industry is very mature; there’s about 40 manufacturers selling viable systems that work well, with good heat profiles, and excellent performance characteristics,” said Hasco’s Robert Butcher.

Nowadays, though, the ranks are swelling, as new domestic and offshore suppliers look to take advantage of the growing demand. “A lot of the tooling coming into North America is equipped with hot runner systems built by offshore manufacturers, which can be very hard to counter,” Butcher said. “If we try to sell to Asian counterparts, they have restrictions and tariffs in place; whereas if they sell back to us, it’s a wide open market.”

Most North American suppliers seem confident of being able to beat overseas competition, however. “The difficulties they face in providing proper service and support is a barrier preventing offshore competition from really breaking into North America,” said Mike Brostedt, director of market development at Gammaflux L. P.

As for new domestic competition, it remains to be seen if these upstart companies constitute a serious, long-term threat to the more established players. “A lot of the new domestic hot runner manufacturers don’t last long,” said Hasco’s Robert Butcher. “They’re testing the market, and may only last for a year or two.” Established suppliers have an edge in this regard, he continued, because processors run the risk, when purchasing from unproven manufacturers, of not being able to get replacement parts a few years down the road.

designed specifically for the processing starch-based resins such as PLA, which are hypersensitive to temperature and degrade easily. “Until now, molders have been getting by with special order stainless steel parts to meet their needs,” said Bob Ameel, global business manager, hot runner systems. “Eco-Smart allows processors to optimize their molding and have better quality parts and less rejects due to heat and flow issues.”

High cavitation and stack mold applications are becoming the area of focus for Alba Enterprises, which the company views as offering good possibilities for future growth. “We have a lot of experience with stack molds in particular, and we want to bring that to our customers,” said company president Tony Brusca.

Incoe Corporation is collaborating with Beaumont Technologies to set itself apart. “Working with Beaumont allows us to incorporate melt management technology within our hot runner systems, giving us opportunities outside our core markets,” said John Blundy, vice president of business development with Incoe.

GOING GLOBAL

Some hot runner manufacturers are able to counter global pricing pressure with global manufacturing bases. For example, Mold-Masters Ltd. recently added manufacturing capacity in its Germany and China facilities. Incoe Corporation opened a subsidiary in Shanghai, China in December 2006, fully equipped to serve the domestic market there, the company said. And Husky Injection Molding Systems has integrated its line of Altanium controllers with its worldwide hot runner manufacturing operations in Shenzhen, China and Luxembourg, Germany.

Smaller hot runner suppliers are venturing into this territory, as well. “We’re trying to penetrate the European market by simply going there and visiting prospective clients, and also by working directly with end users in Europe,” said Harald Schmidt, president of Mold Hotrunner Solutions Inc. “Within the past year, we’ve switched our pattern of exporting from 75 per cent to the U. S., to 75 per cent to Europe.”

Such a strategy is not risk-free, however. “It’s not always easy to find a trustworthy partner,” said J-Tech Hot Runner’s Joachim Neumann. The company, which also represents hot runner supplier Yudo in Canada, recently made available both a new six-drop multi-tip nozzle and a low profile edge gate nozzle, but Neumann has concerns about protecting the technology. “We’re anxious to make products available overseas, but are worried about the possibility of our ideas being stolen.”

GUARANTEEING IT

Increasing warranty coverage is yet another tactic for attracting customers. For example, Gammaflux recently announced a five-year warranty program on its LEC and TTC hot runner temperature controller lines. The LEC is offered with 2-, 6-and 12-zone enclosures and features a modular design for control card removal, addition or replacement; the TTC is designed for molding applications up to 640 zones.

Mold-Masters used the recent K-2007 show in Germany to unveil a 10-year warranty on its hot runners. “We wanted to make a clear statement about our confidence in the performance and reliability of our products,” said company president Jonathan Fischer.

CPL

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Resource List

Acetronic Industrial Controls Inc. (Mississauga, Ont.); www.acetronic.com; 1-800-803-8871

Alba Enterprises Inc. (Rancho Cucamongo, Calif.); www.albaent.com; 1-800-432-6653

D-M-E of Canada Ltd. (Mississauga, Ont.); www.dme.net; 1-800-387-6600

Gammaflux L. P. (Sterling, Va.); www.gammaflux.com;

Control Solutions (Brampton, Ont.); 905-458-8382

Hasco Canada (Toronto); www.hasco.com; 416-293-5044

Husky Injection Molding Systems (Bolton, Ont.); www.husky.ca; 905-951-5000

Incoe Corporation (Troy, Mich.); www.incoe.com; 248-616-0220

J-Tech Hot Runner Inc. (Caledon, Ont.); www.jtechhotrunner.com; 519-927-1067

Mold Hotrunner Solutions Inc. (Georgetown, Ont.); 905-873-1954

Mold-Masters Limited (Georgetown, Ont.); www.moldmasters.com; 905-877-0185

PCS Company (Woodbridge, Ont.); www.pcscompany.com; 800-465-4944