PALLETIZING, DEPALLETIZING, AND PALLET UNITIZING MACHINERY

Transcription

1 Packaging Machinery Shipments & Outlook Study PALLETIZING, DEPALLETIZING, AND PALLET UNITIZING MACHINERY Definition: Machinery used for the palletizing and depalletizing as well as pallet unitizing of cases, bags, and other containers. Pallet unitizing includes both film (stretch wrap) and non-film (banding, shrink, adhesive, etc.) type machines. Segmented by: Conventional Palletizers/Depalletizers for Cases; Conventional Palletizers/Depalletizers for Non-Case, e.g., bags and pails; Robotic Palletizers/Depalletizers; Pallet Unitizing Stretch Wrap Machinery; and Pallet Unitizing All Other Machinery. Integral palletizer/unitizer combinations are recorded as palletizers. 7.8% Share of Total Industry $ Volume ANOTHER YEAR OF DOUBLE-DIGIT GROWTH U.S. shipments of palletizing/depalletizing and pallet unitizing machinery increased at a rate of percent in 2005 to an estimated $452 million (Table 41). The gain, which followed another year of double-digit growth in 2004, offered confirmation of the fact that the rebound from two consecutive years of decline (2002 and 2003) was still in play. In so doing, it further reinforced the reputation of palletizing and unitizing machinery as being one of the industry's most growthoriented categories; for prior to 2002, it claimed status as having produced the longest run of above-average growth among all others during the past decade. In similar fashion to the prior year's results, the 2005 increase was achieved by a combination of both higher shipments to domestic market customers and an increase in export billings. While exports rose $7 million (+19.4 percent) to $43 million, domestic market billings increased +9.4 percent or $35 million to $409 million. Domestic demand has been responsible for most of the industry's recent gains and clearly the preponderant share of annual dollar volume, which measured at 90.5 percent in The order backlog as of 12/31/05 stood at $131 million, up from $99 million at the close of The $131million was equivalent to 29 percent of the 2005 shipment total. 11-YEAR GROWTH TREND As Figure 65 indicates, shipment growth of palletizing and unitizing machinery had been positive every year from 1995 through 2001, and during most of that period it surpassed the growth of the packaging machinery industry as a whole In accommodating the widespread emphasis placed on downstream packaging operations during the late 1990s and into the 2000s, reflecting end-users' quest to improve productivity, reduce labor costs, and especially to conform to ergonomic standards, machinery manufacturers remained active in advancing palletizer/ unitizer technology with a steady stream of new model introductions. The pattern of consecutive annual growth was broken in 2002 and 2003 as many projects were held up and capital spending frozen. But the two-year lull produced a condition of pent-up demand whose release was reflected in the double-digit growth recorded in 2004 and BASIS FOR THE DATA - THE SURVEY'S RESULTS Shipment data and estimates for 52 companies identified as manufacturers of palletizing/depalletizing and pallet unitizing machinery were used in developing the dollar-volume projections. Tabulation of complete questionnaire data was based on input from 36 compa-

2 Palletizing Machinery 119 FIGURE 65 ANNUAL GROWTH OF U.S. PALLETIZING AND PALLET UNITIZING MACHINERY SHIPMENTS COMPARED WITH TOTAL U.S. PACKAGING MACHINERY SHIPMENT GROWTH % 18% 17.2% 16.6% 16% 14% 12% 11.1% 10.2% U.S. Palletizing and Unitizing Machinery Shipments % Change 1 8% 6% 4% 7.5% 6.1% 3.2% Total U.S. Packaging Machinery Shipments 2% 1.3% -2% -4% -6% % -4.6% -8% -1 nies. A summary of the survey's composition and associated secondary research is presented in Table 42 at the end of the section. The projected value of shipments attributed to the 52 companies amounted to an estimated $362 million, of which the fully participating PMMI members represented $245.3 million. The data measuring the proportion of palletizer/unitizer manufacturers reporting an increase in 2005 shipments versus those with a decline are reflective of the percent net increase in billings. The bar chart of Figure 66 shows that an overwhelming majority of manufacturers (7) recorded higher total palletizer/unitizer shipments in 2005 versus 19 percent with a decline and 11 percent with no change. The positive breadth is logically similar to the breakdown of 7-16% - 14% reported for 2004 when growth was percent. And for a second consecutive year, virtually all manufacturers of stretch-wrap-unitizer machinery reported an increase in shipments. The overall category data ranged from a low of -100 percent (decline to $0 shipments) to a high of +575 percent (increase), the latter reported by a manufacturer whose 2004 shipments were less than $500 thousand. The arithmetic mean of the percent-change data was percent and the median percent growth. (Please bear in mind that the arithmetic mean is based on manufacturers' growth rates irrespective of dollar volume, whereas the final growth numbers are weighted according to dollar volume.) The average value of manufacturers' shipments for the category - especially for manufacturers of stretch wrap unitizers - is skewed to the high side by data from several manufacturers whose reported machinery billings were unusually large. The impact of their high billings on the totals is illustrated by the large difference between the average and median shipments (per manufacturer) listed in Table 40. SHIPMENTS BY TYPE OF MACHINERY A summary of dollar and unit shipments, exports, and order backlog for each of the five principal kinds of machinery within this category is presented in Table 41. Shipments of conventional case palletizers,

3 Packaging Machinery Shipments & Outlook Study TABLE 40 Average And Median Dollar Values Of 2005 Palletizing Machinery Shipments (Shipments Per Manufacturer Based On Survey Data) 2005 Shipments Machinery Average Median Total Palletizing/Depalletizing and Pallet Unitizing Machinery Conventional Palletizers and Depalletizers Case Conventional Palletizers and Depalletizers Non-Case Robotic Palletizers Pallet Unitizing Machinery Stretch Wrap Pallet Unitizing Machinery All Other Types US$ Millions which until recently had accounted for the largest share of the annual palletizer/unitizer dollar volume, but now rank second, increased percent in 2005 to an estimated $127 million from $115 million in Despite the boost from two consecutive increases (in 2004 and 2005), the value has yet to return to the $133 million figure reported for 2002, reflecting the impact of a few factors on the sub-category's performance. (1) After several years of heavy build-up, the conventional case palletizer market has become very mature as evidenced by discounting, considerable price pressure, eroding margins, and ironically, the infusion of several additional manufacturers. (2) Robotic machines have been seriously encroaching on the lower-speed sector of the market (currently up to 30 cases per minute), and have also begun gradual penetration of the above 30 cpm mid-range as well. Lines are clearly becoming faster. In addition to the conventional high speed range, case palletizer manufacturers have been also concentrating on producing more custom-designed machines with special options in all speed range categories. With regard to the aggregate dollar volume, it is worth noting that all of the growth was generated by higher shipments to the U.S. domestic market, which at $121 million, was up by TABLE 41 U.S Palletizing, Depalletizing, and Pallet Unitizing Machinery Shipments, Exports, And Order Backlog By Type Of Machinery PERCENT CHANGE TOTAL Industry In $ Shipments Unit U.S. Order BACKLOG 2005 Shipments 2005 Vs Shipments EXPORTS 12/31/05 Machinery ($ Millions) (%) (#) ($ Millions) ($ Millions) Conventional Palletizers and Depalletizers Case Conventional Palletizers and Depalletizers Non-Case Robotic Palletizers and Depalletizers All Pallet Unitizing Machinery Stretch Wrap , Pallet Unitizing Machinery All Other Types N.A.* Negl. Negl. Total Category N.A.* * Insufficient data on unit quantity for the all other category prevented a projection of the unit volume.

4 Palletizing Machinery 121 FIGURE 66 PERCENT OF COMPANIES REPORTING AN INCREASE, DECREASE, AND NO CHANGE IN PALLETIZING AND PALLET UNITIZING MACHINERY SHIPMENTS 2005 VERSUS 2004 Total Palletizers and Unitizers 11% 19% 7 % Reporting Increase Case Palletizers 8% 31% 61% % Reporting Decrease Non-Case Palletizers 43% 57% % Reporting No Change Robotic Palletizers 6% 11% 83% Unitizers Stretch Wrap 10 Unitizers All Other percent, while exports at $6 million were down -40 percent for the year. The level of business appears to have strengthened during the latter half of 2005 as evidenced by the size of the order backlog. As of 12/31/05 it stood at $46 million, equivalent to 36.2 percent of total shipments and up percent compared with year-end In contrast to the favorable growth number posted by case palletizers, shipments of palletizers for non-case applications essentially involving bags, bales, pales, drums, totes, etc. fell in 2005 by nearly -15 percent to an estimated $74 million. The decline, which followed a temporary +11 percent growth spurt in 2004, signaled a return to the below-par performance of the prior two years. And although the volume of business was growing before the period, the growth was being achieved at a decelerated pace. (Shipments were up percent in 1997, percent in 1998, +8.1 percent in 1999, +1.5 percent in 2000 and +1.2 percent in 2001.) Much of the growth has been stimulated by end-users' focus on improving productivity and conforming to worker safety and ergonomic requirements, especially involving 50-pound bags. Nevertheless, a portion of that potential volume has been usurped by robotic palletizers. Some of the more dynamic applications (for both conventional and robotic palletizers) involve garden chemicals, fertilizers, agriculture seed, cement, aggregate, pet food, and bird seed among others. Of all the kinds of machinery covered in this report, robotic palletizers are arguably the most dynamic in terms of their immediate- and long-term growth potential. U.S. shipments of robotic palletizers and depalletizers shot ahead by percent in 2005 to an estimated $110 million. Though up by only +7.6 percent in 2004, robotic palletizer shipments have nonetheless recorded explosive growth in recent years, with a percent gain in 2003, percent in 2001 and percent in It is important to note that this is the sixth year that robotic palletizers are broken out as a separate sub-category; for until 2000, they had been defined as part of the aggregate case and non-

5 Packaging Machinery Shipments & Outlook Study case palletizer shipment data. The change was made in recognition of the significant impact that robot technology has exerted on the palletizing and depalletizing machinery category as a whole. The emergence of robotics as a dynamic alternative to conventional packaging machinery technology has been energized by the increase in efficiency, productivity, and especially multifaceted versatility that robotic palletizers deliver. Though growth had initially been restrained by the relative slowness of speed in the earlier versions compared with conventional palletizers, improvements in speed capabilities of newer models, together with more affordable pricing, have clearly helped to further their market penetration. They are currently concentrated in the range of 30 cases per minute and below; however, inroads are continually being made toward faster speeds. Irrespective of speed, however, they have the distinct advantage over conventional units of being able to handle three lines at once. Evidence of the progress being made by robotics is reflected in the recent decline of conventional non-case palletizer shipments attributed largely to the market encroachment by robotics. Based on a nearly consistent growth track over the past decade, stretch-wrap pallet-unitizing machinery has emerged as the leader in terms of annual shipment dollar volume, having topped conventional case palletizers (which had been historically dominant) for the third consecutive year. As Table 41 indicates, the value of stretch-wrap unitizers grew +4.7 percent in 2005 to an estimated $135 million, following a percent increase in The growth was attributed to both higher shipments to U.S. domestic customers (to $115 million) and to an increase in exports (to $20 million). It is worth pointing out that the dollar volume was based on a quantity of 7,318 units shipped, which included both the large fully-automated systems as well as small semi-automatic units priced at less than $5,000. Therefore, while the average price per-unitshipped stood at $18,447 in 2005, the more common fully-automated units ranged in price from $161,000 to over $420,000. It is also important to note sales of integral palletizer/unitizer combinations, which, for purposes of definition, are counted as palletizers, have been on the increase. TRENDS, FACTORS, AND DEVELOPMENTS The following summary contains what are believed to be the most important trends, factors and developments that influenced the palletizer/unitizer market in Positive Trends, Factors, and Developments A. Continued strength of U.S. domestic market demand in general Most of the growth recorded in 2005 was generated by increased shipments to the U.S. domestic market. The forward momentum resulted in large part from strong fundamentals of the U.S. economy, which in turn encouraged end-users to invest in new equipment based on sustained market confidence. "Favorable market conditions from the good economy plus our intensified marketing efforts were responsible for our increase." "Customers finally released capital." "Many projects that had been on hold were approved." B. Considerably faster growth of robotic palletizer shipments With an increase of nearly +55 percent ($39 million) to $110 million in 2005, robotic palletizers gained further strength in their dynamic penetration of the market. "We saw more customers interested in robotics this year than ever before." "Benefited from trend shifting from conventional to robotic technology." C. Measurably increased demand from the food and beverage products markets Shipments of palletizing and unitizing machinery attributed to food and beverage product applications increased substantially in According to projections, the share of business credited to the food products segment rose to 31 percent of the total up from 24 percent in The change represented an increase of nearly $32 million to $140 million or percent. At the same time, the beverage segment's share rose to 29 percent from 26 percent in 2004, for an equivalent jump of roughly $14 million in value (+11.5%) to $131 million. Much of the increase was attributable to significant gains in capacity utilization, which prompted needs for additional equipment. "Good amount of quotes and orders from food customers following Pack Expo"

6 Palletizing Machinery 123 D. Unwavering emphasis on end-of-line automation End-of-line packaging has arguably been one of packaging's more labor intense operations. In recent years, therefore, customers added fully automatic or semi automatic palletizers and/or unitizers where none had been before or upgraded from semi-automated to fully automated machinery while justifying spending on an ROI basis. E. Further technological improvements and advanced machine design Manufacturers of conventional in-line palletizers have been actively introducing meaningful improvements to their lines, which include: increased speeds to over 200 cases per minute, smaller footprints, greater flexibility, more versatility (e.g., different size packages, pallet travel, discharge, etc.), and user-friendly controls. "We introduced several new lines of equipment, which generated interest and produced orders." and unitizer demand have benefited from the progressive increase in the number and variety of large bagged products appearing in supermarkets, DIY stores and hardware stores. Included among the more prominent product categories are: seed, fertilizer, cement, pet food, charcoal, aggregate, pesticide and herbicide, feed and chemicals, among others. Negative Trends, Factors, and Developments A. Further industry consolidation B. Intensified price competition C. More outsourcing of production by customers to overseas manufacturers D. Continued high demand for rebuilt machinery at the expense of new-unit sales F. Greater diversity in stretch-film unitizer demand Sales of stretch wrap unitizers have been growing both vertically and horizontally throughout most market segments. In response to market demand, manufacturers have been expanding their lines to accommodate a wider diversity of applications ranging from small portable units for semi-automatic requirements in low-volume shops to the large fullyautomated unitizing systems required by high speed, high volume packaging operations. G. Positive effects of higher capacity utilization Further reductions in excess capacity in general manufacturing compelled more customers to add packaging lines in 2005, thereby requiring new machines to accommodate the expansions. H. Further stimulus from large customers' specialized requirements Demand for palletizing and unitizing machinery continued to be influenced by the specialized needs of major retail chains, superstores and dollar stores regarding the kinds and sizes of packages end-users must provide. Consequently, end users have been installing palletizers capable of handling the increased variety of both small and large cases, crates, trays, and other packages with the ability to changeover quickly. I. Increased demand linked to large bag palletizing requirements Both palletizer (especially robotic) PALLETIZER/DEPALLETIZER AND UNITIZER SHIPMENTS BY TYPE OF CUSTOMER Approximately 70 percent of the palletizer/depalletizer and pallet unitizer dollar shipments in 2005 resulted from sales made to end-users, either directly or through manufacturers' representatives up from 69 percent in 2004, 60 percent in 2003 and 66 percent in Of the balance, 28 percent was derived from sales through distributors, down from 39 percent in 2003, and 33 percent in The trend toward more direct/manufacturers' rep representation appears to be due to the growing complexity of the machines being sold and to the need for more technical expertise, especially for those with robotics. In general, palletizer/depalletizer shipments are skewed heavily toward end-user-direct business and conversely, unitizer shipments more toward sales through distributors. Roughly two percent of the shipment dollar volume was derived from sales to other machinery manufacturers; although it is likely that a gray area may exist in the robotics category where certain of the manufacturers of purely robotic equipment sell their machinery directly to packaging machinery manufacturers. (Note: To avoid skewing the projection by double counting, shipments by manufacturers of purely robotic systems sold to palletizer manufacturers for incorporation into their equipment are not included in the final numbers.)

7 Packaging Machinery Shipments & Outlook Study FIGURE 67 U.S PALLETIZING AND PALLET UNITIZING MACHINERY SHIPMENTS BY MARKET SEGMENT (Percent of Total Dollar Value) Consumer Durable Goods 1 Printers, Converters, and All Other 4% Foods 31% Durables 5% Chemicals 8% Hardware,Auto, Industrial 4% Toiletries and Pharmaceuticals 9% Beverages 29% FIGURE 68 HISTORICAL TREND OF MARKET SEGMENT BREAKDOWN FOR U.S. PALLETIZING AND PALLET UNITIZING MACHINERY (As a Percentage of Total Dollar Shipments) 35% Percentage of Total Shipments 3 25% 2 15% 1 Foods Beverages Toiletries and Pharmaceuticals Hardware/Auto/Industrial Chemicals Paper and Other Non-Durables 5% Consumer Durable Goods Printers/Converters/All Other

8 Palletizing Machinery 125 PALLETIZER/DEPALLETIZER AND UNITIZER SHIPMENTS BY MARKET SEGMENT The pie chart of Figure 67 presents an approximate breakdown of 2005 palletizer and unitizer shipments by principal market segment, and Figure 68 traces the most recent seven-year history of the individual market segments' respective shares. As indicated, the food products segment was responsible for 31 percent of the industry's total volume of shipments for the year, up sharply from 24 percent in It is important to point out that the prior year's decline in share of shipments to 24 percent from 29 percent in 2003 was a transitory occurrence, considering that food product applications have traditionally been responsible for the leading share of annual shipment dollar volume. The beverage products segment also rose in prominence from a 26 percent share of the volume in 2004 to 29 percent in 2005, reflecting the benefits of large turnkey project activity. G. Continued heavy positive influence of specialized packaging requirements from large retailers and superstores generating needs for more advanced equipment capable of greater flexibility Factors Possibly Limiting Growth A. Potential effects of higher interest rates and oil prices leading to economic slowdown B. Greater than anticipated rate of industry consolidation C. Intensified competition from imported machinery D. More end-users outsourcing to manufacturing operations abroad E. Intensified new-unit competition from rebuilt machinery PALLETIZING/DEPALLETIZING AND PALLET UNITIZING MACHINERY FORECASTS As shown in Figure 69, shipments of palletizers and pallet unitizers are forecast to grow at a cumulative annual rate of 2.7 percent over the next three years, from an estimated $452 million in 2005 to $490 million by 2008 (in constant 2005 dollars.) The following summary lists the key elements behind the forecast: SURVEY PARTICIPATION AND COMPANY SECONDARY RESEARCH Table 42 summarizes the participation and methodology of data collection for the survey phase of the study, and the associated company research. The Case for Growth A. Sustained, albeit uneven growth of the U.S. economy 2006 through 2008 (Please see Macroeconomic Assumptions.) B. Accelerated momentum in growth of robotic palletizer shipments C. Continued end-user focus on downstream automation as a means of lower labor costs D. Increased sales of more economy-priced models advancing unit quantity volume E. Expected improvement in export demand F. High rate of upgrade activity in response to further advances in technology

9 Packaging Machinery Shipments & Outlook Study FIGURE 69 FORECAST OF U.S. PALLETIZER/DEPALLETIZER AND PALLET UNITIZER SHIPMENTS (Constant 2005 Dollars) $ Millions TABLE 42 Survey Participation And Company Secondary Research (Palletizing, Depalletizing, and Pallet Unitizing Machinery Manufacturers) Status Number of Companies PMMI Members Completed The Questionnaire 36 Company Shipment Estimates Developed Through Secondary Research 16 Total Companies 52