The World of Film
Canadian blown film processors serve markets which are, to an engineer, bifurcated, to an economist, segmented, and to a psychiatrist, schizophrenic. Few processes encompass both high throughput commo...
Canadian blown film processors serve markets which are, to an engineer, bifurcated, to an economist, segmented, and to a psychiatrist, schizophrenic. Few processes encompass both high throughput commodity manufacturing and advanced technology, value-added specialty products. From trash bags to surgically implantable materials, making products cost-efficiently in this sector requires the right technology, and the right management of that technology. In some regions of Europe and Asia, air rings, auto width controls, internal bubble cooling and integrated process control are standard; while Canadian processors have been slower to adopt these quality and productivity enhancing features.
Although film operations are still heavily influenced by regional and local production and marketing issues, new global players that rely on highly automated equipment could take the lead in high volume, value-added markets.
ASIA: ON THE MOVE
Asia’s surprising economic recovery is, from a film perspective, driven by both export and domestic markets. Packaging is the most important film market in Asia, as in the West, and affordable products with higher barrier properties are emerging. Their advanced properties limit food spoilage for markets with both poor transportation infrastructures and increasing demand for fresh foods with Western quality standards. Multi-layer film blown on North American and European equipment is the norm for this market. At the entry level, however, local equipment manufacturers dominate commodity film manufacturing.
With a general lack of trained operating personnel and exponential growth in many markets, “upgrade” often means a move to heavily automated, high-end equipment which shortens the learning curve when switching to more demanding applications. One equipment manufacturer contacted by Canadian Plastics contrasted the difference in marketing equipment in Asia compared to Canada: “When we go to Asia, they want the best. They don’t care about the price.”
The Japanese commitment to technology remains consistent despite poor economic growth, but the most ominous trend is emerging in China and South East Asia where processors are buying leading edge equipment in quantity. Much of that capacity anticipates significant domestic demand growth, but should the regional Asian markets cool, the new players will likely move to an even heavier emphasis on exports, with inevitable pricing consequences for this continent.
EUROPE: ADVANCED TECHNOLOGY EQUIPMENT FOR SOPHISTICATED MARKETS
European demand for advanced film products is very strong, as pressures on packagers to reduce mass are emerging due to stringent recycling and product stewardship regulation. The downgaging required to reduce packaging mass has a coincidental cost benefit to end users in the retail sector. European processors are delivering thinner, stiffer and flatter films with multiple layer lines and sophisticated process control systems. The situation in Europe adds other regulatory and standardization issues to the competitive mix. Worker safety regulations, for example, are a significant factor in the decision to upgrade to automated roll handling equipment, although the global trend towards larger, heavier rolls also forces the issue for many high-output processors. Tightening CE and other standards regimes are another impetus to automate, as is the shortage of skilled operators, despite the traditional willingness of European industry and governments to implement apprenticeship and training programs.
Labour issues aren’t exclusive to European processors, but another factor not commonly seen in North America is the high cost of electric power.
Battenfeld Gloucester’s group product manager for blown film, David Beddus, describes a typical energy efficiency issue: “They (film processors) carefully weigh the cost of producing chilled air for air ring and IBC (internal bubble cooling) use against the production advantage of the extra film output. Similarly, grooved feed extruders are more favored in Europe due to their higher efficiency in feeding hard pellets, though this advantage should be balanced against the grooved machine’s difficulty in processing reclaim fluff.”
Power is relatively expensive in Europe, but economic union and the move towards deregulation likely will put downward pressure on pricing in the long term. Even in the unlikely outcome of energy price parity with North America, energy efficiency will play a part in European blown film technology issues.
THE AMERICAS: SOUTH OF NAFTA
In the Americas, the regions south of the NAFTA triad operate with unique challenges. With smaller, geographically isolated regional markets, Latin and South America’s film processing sector takes an alternate approach toward cost/performance issues. Coextrusion is much less prevalent than in North America, and tends to be limited to three layers, leaving many processors with a difficult problem: the need to provide low-cost product with advanced barrier properties.
Processors in the region have adapted by developing unique resin blends to provide good properties from fewer layers. Costs, however, are higher, since heavier loadings of barrier resin are required compared to coextruded products of similar performance. Labour cost advantages can do little to compensate as increasing automation in competing regions limits the labour component of processor overheads. As a result, margins suffer.
Ready availability of specialty resins is also an issue in many regions of Central and South America. The move to extensive coextrusion is accelerating, as export markets, notably North America, demand higher performance and greater consistency in film products.
NAFTA REGION: CANADA BEHIND
North American blown film processors are confronted by competitive, technology-savvy European sources and by fast-rising Asian and New World processors. Battenfeld Gloucester’s David Beddus has observed a split in North American processing practice based on the added value of the film product: “In North America, manufacturing practices are heading in two directions. One is towards versatile equipment for short production runs of high value specialty films. The other direction is towards faster, wider lines for higher productivity”.
While the need for increased productivity is self-evident, the ability of Canadian processors to keep pace with the rate of technological change south of the border is a pressing issue.
Macro Engineering president Mirek Planeta is among many who see the Canadian blown film community as lagging behind in the technology race: “In my opinion, we don’t really have many leading edge film producers in Canada. Most (of the market) is single, with some people getting into coextrusion.” Planeta sees the writing on the wall for processors who ignore the coextrusion trend: “They really have to get ready for US and European companies who are producing seven to nine layer coextrusions with absolutely flat, wrinkle-free film with excellent gauge control. Today, to be leading edge, you need a minimum of a seven-layer die. You also need absolutely flat film, with less than plus or minus five per cent gauge control. Future growth is definitely in coextrusion and specialty films.”
With traditional Canadian difficulties in raising capital, the insulating effect of a 68-cent dollar, good margins, stable growth as well as simple inertia, there are reasons for a “wait and see” attitude. As blown film processing becomes increasingly complex, however, changes in any of the economic fundamentals may erode margins rapidly and leave processors with a very steep learning curve and little time to adopt leading edge technology. High-output Canadian operations are less likely to slip behind global best practices, but as Philip Kwok, vice-president, worldwide sales for Brampton Engineering explains: “In Europe and some parts of Asia, air rings, auto width controls, internal bubble cooling systems and integrated process control are considered standard, while in Canada they’re not yet recognized for their major contr
ibutions to improving quality and productivity.”
Advanced gravimetric blending systems, AC drives for blowers, take-off equipment and winders, as well as new screw and die designs can offer double-digit output rate improvement, although the ability of smaller processors to afford these technologies is a crucial survival issue. The result will be rationalization in the processor community, with the small commodity producer hanging on by serving specialized, local markets.
EQUIPMENT A LA CARTE
As the processing community de-emphasizes the broad range supplier in favour of increasing specialization, the equipment side will increasingly apply the same principle by sourcing components and sub-assemblies from specialist firms. The turnkey upscale line of the future will likely contain technologies derived from a global supplier base, sold and serviced through firms which will evolve from machinery manufacturers to system integrators. Brampton, Ontario-based Future Design, for example, supplies air rings and bubble control equipment to OEM’s such as Reifenhauser, in addition to the firm’s traditional end-user products. Peter Giddings, Canadian sales manager for Future Design, sees this trend expanding: “The Europeans in particular are going to automotive style manufacturing — they’ll buy component parts and assemble.” The advantage of specialization for companies such as Future Design are clear, yet the real winners ultimately will be the processor community. As more equipment suppliers become system assemblers and integrators, the “critical mass” of detail expertise necessary for new suppliers to enter the market should drop, adding downward pricing pressure on existing manufacturers. As Peter Giddings summarizes: “The old saying goes, it’s about pounds on the ground. You’re not selling bubbles, frost lines, or lay-flat, you’re selling pounds on the ground. And it had better be good quality stuff. It’s as simple as that.”