PLASTICS AND RUBBER PROCESSING MACHINES: turnover and orders are growing

PLASTICS AND RUBBER PROCESSING MACHINES,**all indicators good for the first half year: turnover and orders aregrowing

A positive trend for plastics and rubber processing machinery in the firsthalf of 2021 announced by the trade association AMAPLAST: the latestmid-year survey conducted by the MECS Statistical Study Center records*double-digit

growth in both turnover and orders*, consolidating the climate of renewedfaith in the sector after the long and difficult period of the pandemic.With respect to January-June 2020, turnover has increased by *+11%*.Domestic machines sales have remained high while demand abroad principallyregards replacement parts.

Companies have also witnessed a *clear improvement in their order books* inthe first six months of 2021, recording *+46%* with respect to the previousyear. The recovery is mainly driven by the major commissions for plants byItalian customers (with an impressive +134% in the last quarter alone) butthere is also a very positive trend in orders from abroad, both formachinery and for replacement parts (+58%). Given this trend an average of6.4 months of production are already assured.

The rebound in the domestic market thus confirms a *greater propensity forinvestment* by Italian companies, partially thanks to incentives (taxcredits for modernizing systems and investing in Industry 4.0) provided byindustrial policy plans.

All four major sectors for plastics and rubber processing machines continueto show lively performance. Medical, packaging, and automotive inparticular show signs of growth that should be confirmed in the comingmonths while the construction industry has stabilized.

Uncertainties still remain regarding the spread of the Delta variant andconcern is still high about *high raw materials prices* and their relativescarcity, factors which lengthen average delivery times and compressmargins.

Also contributing to tensions is the unabated *rise in sea freight rates*,which have reached record levels. Logistic difficulties and *increasingshipping prices* are seen in all geographical areas and the trend maycontinue through the summer, since demand generally increases in thisseason.

The MECS Study Center has completed its *National Statistical Survey*,conducted for the first time in organic form among Italian manufacturers ofplastics and rubber processing machinery, equipment, and moulds.

The general picture is of a sector that produced revenues of *3.74 billioneuros in 2020*, with nearly *76% of the total from exports*, confirming thehistorical *emphasis on exports by companies in the industry*. The nearly350 companies surveyed, employing just over 13,000 people, are mainlyconcentrated in Lombardy (55%), Emilia-Romagna (15%), and Veneto (13%).Most of them are small companies: 74% bring in less than 10 million eurosin revenues, with an aggregate value that does not reach a quarter of thetotal and less emphasis on exports. In parallel, large companies, whileonly representing 26% of the total by number, generate 77% of the turnoverand reach export quotas above 85%.

The greater level of detail in the survey with respect to its predecessorsalso makes it possible to identify the shares of production by applicationand technology.

The first indicator shows that *packaging is the main outlet market* forItalian manufacturers, and more specifically food packaging (30% ofturnover), followed by other packaging segments (approximately 12%);automotive absorbs 19% of production, and construction 11%; medical,agriculture, electronics/electrotechnics, and other applications followingin decreasing order with shares ranging from 4% to 2%.

As for machinery types, we observe that the category of the *extruders*,with 17% of the total, represents the largest core of turnover for thesector; they are followed by *auxiliaries* at 12%, *injection mouldingmachines* at 11%, and *blow-moulding machines* at nearly 7%. Recovery andrecycling lines and the macro-category of rubber processing machines eachapproach a share of 6%.