PACKAGING MARKETS REPORTING DIFFICULT TIMES IN 1ST QTR ’09!
For most equipment manufacturers the start of 2009 has been a continuation of an extremely difficult 4th quarter. The economic downturn has been tough on most and cruel to many. Some manufacturers have simply folded, while others are restructuring or slashing spending to help get through this difficult period. Weak consumer demand for goods is reducing the immediate need to purchase new packaging equipment, and the ones that are looking for new machinery are having more trouble getting financing for these capital expenditures. The result is that for packaging equipment manufacturers 25% to 50% lower 1st quarter yr-over-yr sales results are very common in the packaging industry. As an example, here are a couple of publicly traded packaging companies and the difficulties they are reporting in their most recent financial reports.
Krones Inc., the large Equipment Systems provider, recently announced that sales orders for the first quarter of 09 were down 32% with sales revenues down 19%. In fact Krones also warned that customers are wary about investing in new equipment and those that are investing are having a difficult time getting financing from the financial markets for their projects. They have announced the termination of 800 temporary and contract workers for this year. They do not rule out the potential that 09 results could be negative.
Read Krones interim report for the 1st Qtr. 2009 here
MJ Maillis Group, which manufactures strap, tape, shrink, and stretch wrapping equipment and materials, reported an after tax loss of 42.9 Million Euro($59 million USD) last year (ending Dec 31,2008), compared to a loss of 36 million Euro in 2007. They mention in their report that the last 4 months of 2008 were very difficult (sales down 27.6% year over year in 4th qtr) and it would continue in the first quarter this year. They were anticipating a bottom in the negative sales trend in qtr 1 of this year with a reversal happening after that. They noted that layoffs were made across the board including at their Wulftec stretch and strap equipment manufacturing facility in Canada.
Difficult times are not restricted to the manufacturers. Distributors are feeling the heat also. International Paper noted in its 1st quarter earnings report that its wholly owned distribution business, XPEDX, reported an operating loss of $7 million, down from the $26 million gain posted in the fourth quarter of 2008. Weakened paper and packaging volumes and lower margins were partly offset by favorable cost reductions.
Successful Product Launches And Improving Distribution Network Drive Success!
Firmly Settled Into Our New 50,000 Sq. Ft. Facility, Phoenix Continues To Broaden Its Product Line And Manufacturing Capability
While other companies shrink or lock down the hatches to ride out this economic storm, Phoenix/CAPS continues on its growth plan set up 18 months ago. , increasing our manufacturing capability, and rolling out our distributor program continues to be our focus moving forward in 2009.
While competitors try to boost sales by switching their focus and watering down their engineering and R&D departments to focus on different products like strapping equipment, case erectors, palletizers or shrink machines, Phoenix has stayed focused on stretch packaging equipment. It is because of this focus that Phoenix can adapt their product line to meet the customer’s application instead of asking the customer to adapt his application to meet a standard machine like many competitor’s attempt to do.
With approx 40,000 sq. ft of manufacturing space now in full operation and another 10,000 sq ft of engineering and office space we are well positioned to meet the demands of a growing distribution group.
We know it isn’t about us. Growth comes with a quality distributor network. If we support our distributors by meeting their customer’s requirements with quality equipment and at a competitive price, then they will be succesful. If our distributors are successful, then Phoenix is successful. Being pro-active in creating opportunities for our distributors is critical during these difficult times. We are growing our distributors sales during this tough economic period and we will be ready for explosive growth when the economy catches its breath. Rest assured, Phoenix will be ready when it does.
You are probably throwing more than 50% of your stretch film out the door without even knowing it. More than 75% of stretch wrap equipment we have tested is performing below acceptable levels, resulting in tens of thousands of dollars in wasted stretch film
Did you know that proper prestretching of the film is required to change the stretch film properties that create the Film Force, Film Tension, and Film Strength required to hold your product together during shipping?
Without this, the stretch film cannot perform the task required. Just because a stretch wrap machine is running does not mean it is working. Although it might be applying stretch film to the load, that doesn’t mean it is prestretching the stretch film and creating all the properties in the stretch film required to hold your pallet together during transport. We provide a simple on-line tool that can test the efficiency of your stretch wrapper, you can find the ” stretch film efficency test tool here“
The PRRA is a revolutionary design that uses a unique wrapping ring concept.
Because of its ability to start and stop the cycle anywhere on the load, the Phoenix PRRA rotary ring pallet wrapper reduces stretch film cost drastically when compared to conventional rotary arm and turntable style wrappers. The PRRA Rotary Ring style wrapper is able to start at the bottom of a load and finish at the top without having to return back down to the clamp fixed at the conveyor. This means that you can save an extra 30+ feet of stretch film while still applying the same required load retention wraps. The result is thousands of dollars in annual film savings compared to all conventional wrappers
Learn more about the features of the PRRA-2100
As an engineering driven stretch wrapper company, we don’t have advertising gurus sitting around coming up with ingenious ideas like “Winter Blitz, Employee Rebate or Roll Back the Prices”.
So there are no “Blow up Gorillas” or “Price is right” beauties (We just aren’t smart enough) BUT….. WE DO HAVE A $ 1,500 REBATE ON ALL STRETCH WRAPPER MACHINES!
So take advantage of our slick campaign to buy what you need…Contact Us Now
A number of upgrades have been recently implemented to the complete range of Phoenix stretch wrapper products. One of these upgrades is that all Phoenix semi-automatic stretch wrappers and fully automatic stretch wrappers are controlled using Allen Bradley variable frequency drives for all motors. From our entry level wrapper right up to the high speed automatics, the BALDOR motors are now all controlled using ALLEN BRADLEY Powerflex VFDs. VFD control provides accurate and increased flexibility of the motor and eliminate the problematic DC control boards and the maintenance issues associated with DC motors. Unlike DC motors which can be difficult to locate, AC motors are readily available worldwide.
Allen Bradley components are predominantly used throughout the Phoenix product line. The simplicity, maintenance improvements and control capabilities are improved dramatically and make this upgrade to our lineup a big hit with our customers worldwide. We are sure that this readily available name brand will simplify after sales support for our customers.