ERJ Machinery Survey 2023 - Powering through

Overall, the value of sales among suppliers of rubber and tire processing/manufacturing equipment participating in this year’s ERJ Machinery Survey remained on a par with the level recorded last year.

In a like-for-like comparison, total sales among respondents to the survey both this year and in 2022 reached $3130.6 million, representing a year-on-year increase of just 0.5% – a far cry from the growth rate of over 20% recorded last year.

The flat market scenario identified in this year’s survey reflected challenges around global economic and geopolitical developments, such as the impact of Russia’s continuing war on Ukraine, as well as the – now lifted – Covid lockdowns in China.

Among other significant factors, the increased strength of the US dollar took the shine off the performance of many rubber & tire machinery suppliers – currency effects turning year-on-year gains for many respondents into year-on-year declines.

European-based companies registered a 3.0% year-on-year increase in sales to $1,425.2 million in the 2023 survey, so that the global market share of companies based in Europe including Turkey edged up one percentage point to 45.5% (see table p20).

At $1,379.7 million, sales among China-based rubber and tire equipment makers that responded to the survey this year and last, fell by 3.0%, data from the China Rubber Machinery Association shows.

Hence, the global market pendulum moved the other way for Chinese manufacturers, whose 44.1% share of recorded sales was a marked reverse from 45.7% of last’s year’s total.

Fastest growing regions

As in previous years, respondents were asked to identify the fastest growing geographic market regions for their businesses. The question provided one of the most eye-catching statistics in this year’s survey: China slumping to a rating of 15%, compared to 40% a year ago.

This business sentiment clearly tracks the impact of the Covid pandemic and related restrictions in China, which was given a similarly low rating in our 2021 survey.

Considering the on-going impacts of high energy costs and the Ukraine crisis, Western Europe fared surprisingly well in the 2023 survey: rated a fast-growing market by 48% of respondents, up four percentage points on a year ago. More predictably perhaps, Central/Eastern Europe dipped in the ratings, to 48% from the prior-year 56%.

Despite a strong dollar, meanwhile, North America strengthened its reputation as a safe-haven for growth, kicking on with a rating of 63% – up from 48% and 50% in the 2022 and 2021 ERJ Machinery Surveys respectively.

Asked to identify their strongest end-product market sectors, machinery makers again gave a high rating for the tire manufacturing sector – at 70% almost matching its very strong 2022 level.

The automotive components industry also fared well with a three percentage-point rise in its score to 19%. This contrasted to reduced ratings for the industrial parts sector – to 19% from 24% in 2022 – and, more worryingly, general rubber goods, which was rated as a strong-growth market by just 18% of companies, down from 40% a year ago.

Strong expectations

With regard to companies’ plans for the next 12 months, the survey detected a degree of pull-back regarding investment intentions, compared to the high levels recorded over the last two years (see table below).

Nevertheless, many rubber and tire machinery makers can clearly see beyond the current pressures impacting their markets.

Companies with plans to ‘expand’ and/or ‘upgrade/modernise’ over the coming year included: Comerio Ercole, HF, Herbert Tire Tooling, Leonhard Breitenbach, LWB Steinl, Mitsubishi Heavy Industries, Prodicon, REP, Rocky-Ichimaru, Safe-Run, Troester, Uzer Makina and Z-Laser.

These positive options were, likewise, ticked by Sinoarp and VMI, with both companies also indicating plans to ‘build’ on the ERJ Machinery Survey 2023 form, while US-based French Oil Mill Machinery also noted plans to ‘acquire’.

At Italian tire machinery specialist Marangoni, meanwhile, plans for the next 12 months include ‘expand’, ‘acquire’, ‘upgrade/modernise and ‘consolidate’.

Also in expansion mode, Austrian-based rubber moulding machinery maker Maplan listed “open a subsidiary in India” as part of its plans for the year ahead.

For its part, Cimcorp, which supplies factory automation systems to the tire industry is eyeing opportunities as “new factory placements in North Africa, Europe, and the USA are growing fast.”

French-based Spoolex, meanwhile, is targeting “continuous investment in R&D for new machinery and new remote-assistance services and tools (virtual reality, simulators...).”

Israel-based Pelmar is mulling a notably broad set of options for its rubber machinery activities, selecting ‘expand’, ‘acquire’, ‘divest’ and ‘upgrade/modernise’ on the survey form.

Pelmar is also “interested in the development of specialised individual [units] and complete lines, dedicated to improvement of production systems and reduction of waste and scrap [as well as in] joint ventures. “

Another player in expansion and acquisition mode is Italian calendering equipment manufacturer Rodolfo Comerio, which listed a project “to expand our plant 2 to extend laboratory center” in its survey response.

Rodolfo’s plans tally with its reporting of strong growth prospects in almost every global region, including in the tire, automotive components, industrial parts, general rubber goods and aerospace industries.