market analysis | Europe
estimated 5% wholly-owned by capital from outside Europe. However, these investments can often be quite significant so may represent a much greater share in terms of value. North American companies have traditionally been
the most active within European injection moulding, followed by Japanese-owned operations. While these two countries continue to account for the majority of non-European ownership, there has been a notable volume of investment from other Asian countries in recent times. Foreign ownership of European injection moulding
Above: The scale of Lego’s production plant at Nyíregyháza in Hungary is exceptional – the average European moulding site operates 16 machines
publicly-owned but, as the majority operate from more than one location, they account for about 7% of the moulding sites in total. These businesses also typically represent some of the larger groups within European injection moulding and will account for a much greater share in terms of turnover and output. The decline in their number reflects some rationalisation and reorganisation within the businesses to enhance shareholder value in a difficult economic environment. There have also been few, if any, IPOs for businesses involving injection moulding in recent years. Fewer than 50 injection moulding companies are
considered to be majority-owned by private equity, which is also a reduction on the 2009 figure. While they account for less than 2% of the moulding sites in total, these companies are often multi-sited with a particular market specialisation so tend to have a higher impor- tance in terms of value. Private equity funding may also support a considerable proportion of the companies labelled as privately or publicly-owned through a minority shareholding or an investment that is not publicly reported.
Independent players The nature of the injection moulding process, however, is such that it is primarily exploited by small, independ- ent, entrepreneurial businesses that serve a wide variety of manufacturing activity. This small-scale nature of the European industry is further illustrated through analysis of multi-site operations. AMI’s data shows more than 7,800 companies operate as single sites under private, public or private equity ownership. Only 110 companies operate five sites or more, and fewer than 30 companies operate more than 10 injection moulding sites in Europe. Ownership of the European injection moulding
industry also largely resides within Europe, with only an 16 INJECTION WORLD | January/February 2015
operations is also often understated because many companies, particularly those from the Far East, tend to invest in Europe via a minority shareholding in a European concern. Investments of this type are not accounted for in the previous analysis.
Rounding up In summary, since 2007 the injection moulding industry in Europe has been through a deep recession from which it is yet to fully recover in terms of polymer demand. However, recovery in value terms has been faster due to higher material costs and the realisation of added-value opportunities. The value of the industry is forecast to continue to grow but the rate of growth will vary across the different market sectors served. Intense competition, increasing customer pressures, fluctuating raw material costs and increasing energy and labour costs will combine to maintain pressure on profitability. The number of companies involved in injection moulding in Europe will also continue to decline, but the industry structure will remain substan- tially more fragmented than any other area of plastics processing.
This article is based on AMI Consulting’s new in-depth report “The future of the European injection moulding industry”, which provides a detailed analysis of this market in terms of the value, size (in terms of polymer consumption) and structure by key market served (including packaging, automotive, electrical etc). It reports industry trends from the last market peak in 2007 through to 2013/4 and provides forecasts to 2018. More about the report details can be found here. Alternatively, contact report author Sylvia Tabero. Tel: +44 (0)117 9249442; Email:
sat@amiplastics.com
For more information about AMI’s database of injection moulders, contact Regine Futter. Email:
rf@amiplastics.com or visit AMI’s website
www.amiplastics.com
www.injectionworld.com
PHOTO: LEGO GROUP
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