Moldmaking Report: The 2009 moldmaking survey: Just the facts
Here's a question: why bother taking surveys?
Here’s a question: why bother taking surveys?
The short answer is that, since long before European explorers began mapping the New World, the practice has been recognized as one of the best ways of gathering, displaying and comparing information.
The first Canadian Plastics Moldmaking Survey has these goals in mind: to give you, the reader, a look at some of the broad characteristics of Canada’s moldmaking industry, while also setting a standard against which data from future surveys can be measured to track changes over time.
We all know that the past year has been a rough one for the plastics industry, and that the moldmakers have taken their share of the lumps. Hopefully, the survey results will give a useful snapshot, including both the good and the bad, of where some of Canada’s moldmakers are today.
Before getting into some of the actual survey results, it’s important to understand the size and scope of the respondents. To begin, almost 100% of respondents are located in Ontario: 48% are in the Windsor area, 20% in Toronto, 35% situated throughout the rest of Ontario, and the remaining 5% in Quebec.
When asked how many employees work at their plant, the answers varied from five to 250 people. Almost 50% of respondents are with firms that employ between 20 to 50 workers.
The vast majority of respondents — 85% — manufacture molds and dies for injection molding applications. Forty per cent also made die cast molds, 30% also work on compression/transfer molds, and another 30% on structural foam molds.
Despite the well-known troubles facing the automotive industry, the responses suggest that it’s still a huge source of business for the vast majority of moldmakers: eighty-five per cent of respondents said that they manufacture molds for auto parts suppliers. Equally, 85% also made molds for consumer goods and housewares. One-half supply molds for appliances, 35% for sporting good products, and 30% for toys. Thirty per cent report doing work for the rapidly growing medical parts market, 15% for the aerospace industry, 15% for the electrical parts market, and 10% for the packaging industry. Twenty per cent reported making molds either for the construction, lawn equipment, lawn and garden, or alternative energy markets.
All of the respondents offer custom machining, 86.7% have an EDM facility, 86.7% offer mold repair and/or mold cleaning services, 66.7% offer mold prototyping, 60% have mold polishing capabilities, 53.3% offer CNC duplicating, 53.3% perform engraving works, and 26.7% do in-house mold testing and/or tryouts.
Asked to describe the current state of the MTDM industry, respondents gave a variety of answers. Slightly more than 10% described business conditions as “good”, almost 15.8% described it as “fair”, almost 31.6% called it “poor”, and 42.1% described it as “bad”. Perhaps not surprisingly, none of the respondents described their business as “excellent”.
The numbers took a slightly more positive turn on the question of business expectations for the next 12 months. While none of the respondents expected excellent business, 21.1% hoped for good conditions, 36.8% for poor conditions, and only 5.3% predicted a “bad” forecast.
These answers can help explain machine utilization rates. Asked for their average machine utilization rate for the past 12 months, none of the respondents reported using all of their equipment. Almost 11% of respondents reported using between 90-70% of their machinery, roughly one-half said that they used between 69-50%, roughly 22% used between 49-30%, and about 17% said that they utilized less than 30% of their equipment.
Not surprisingly, the global economic meltdown has had an effect on quotations for new business among our respondents. Only 5.3% of respondents said that they have had substantially more new quotes this year than last year. Twenty-six per cent of those surveyed reported a moderate increase compared with last year, while 16% reported the same or slightly lower levels than last year. Almost 37%, however, said that the number of their quotations was down substantially from 12 months ago.
According to 52% of the respondents, less than 10% of the jobs that they have quoted on are expected to result in new contracts. At the other end of the spectrum, 10% of respondents reported a 50% or better success rate when quoting for new business. The remaining respondents fell in between these two groups.
When it comes to buying new moldmaking machinery, the respondents were clear…and the results aren’t good for machinery sales firms. The vast majority of respondents — almost 90% — said that they have no plans to buy any new equipment in the next 12 months. Slightly more than 55% of respondents, meanwhile, have acquired new equipment within the past 12 months.
Understandably, money to spend on employee training seems to be scarce nowadays: 46.7% of respondents said that their shops devoted just 1% of annual budgeted expenses for training. Twenty per cent of respondents reported having no expenses at all set aside for training, meanwhile, while 13% have budgeted 4% or more of their plant’s expenses for this purpose.
Thirty-three per cent of the respondents are with facilities that have budgeted 4% or more of annual expenses for R&D, 26.7% of respondents have set aside 2% of annual expenses for R&D, 20% have budgeted 1% for R&D, and 20% reported having no money budgeted in this area.
When it comes to formally implemented policies and programs, however, most respondents aren’t scrimping. Almost 70% reported having safety programs at their facility, 46.2% follow preventative or predictive maintenance programs, 30% have training programs, and another 30% are with shops that have adopted cost reduction policies.
For years now, we’ve been hearing that a key to business prosperity is in building relationships with foreign companies. Is this message getting through to Canada’s moldmakers? According to the respondents, almost 54% do not yet have a business presence outside of Canada. Thirty per cent have a presence of some kind in China, while 15.4% have connections in the U.S.
Of these foreign connections, 21.4% have of respondents have joint ventures with a local firm, 7.1% operate a manufacturing facility, 7.1% have a sales office, and 7.1% have at least a “working relationship” with a foreign firm.
Of the respondents that do not have a presence outside of Canada, 90% have no plans to initiate one within the next two years. But this isn’t to say that they don’t do business with foreign firms at all; almost 54% of respondents said that they purchase and/or fine-tune molds manufactured in China.