We are focusing on PET converters who are looking for a strategic advantage

Goeke:  Although our range of industry leading product brands is large and wide ranging, they all exist in the same “plastics arena” with the exception of CIMCOOL, which although an outsider still has customers in mould making. At Milacron, our focus is plastics, we live, eat, sleep and breathe plastics just like our customers. All of our product brand technologies have some overlap in technology and expertise.

Goeke:  As we are a publically traded company, we don’t get into details about our individual businesses. However, I can say that in 2016, our APPT business finished with approx. 675 million USD in sales and our MDCS business finished with approx. 400 million USD in sales. Our fluids business, which has a large number of sales outside of the plastics industry finished with 115 million USD in sales.  

Goeke:  Global annual growth has been tempered by global economic conditions and a move from CSD to more consumer health aware choices. The growth of products and packaging in today’s PET market is driving lower volume solutions from 96 cavities and down. Asia Pacific is the fastest growing market and has seen volume growth for PET bottles at a five year average of approximately 5%, representing 30% - 40% of the global machine installments. Europe and the Americas are flat with a 0 – 1% growth rate and with an aging machine population. Here, older equipment is being replaced with new and some older assets are being shifted to Latin America. Cavitations is the highest in NA as it is a large homogeneous market compared to Europe or Latin America. Africa and Eurasia are seeing a growth rate of approximately 6%, however these regions represent 15% of the global beverage unit volumes. The PET preform market is yielding a global annual growth rate in the range of 5% to 7%.

For our EBM business, which is significant in the dairy market, the market is differentiated not so much by region as it is by consumption habits of the particular region and the preference for fresh milk versus LSL milk. In markets, like the US, Mexico, UK, South Africa, Australia, Middle East and parts of Asia, where there is significant consumption of fresh milk, there is tendency for larger, handle-ware containers to meet the consumer demand — something that cannot be accomplished cost effectively on ISBM PET. And, in those situations, such containers are made using HDPE, processors and dairies tend to HDPE for smaller, single serve applications as well. In other markets, where consumption is not as significant, per capita, the choice tends to be PET for smaller containers that provide LSL properties.

Goeke:  Let us start with Klear Can - Milacron’s Klear Can truly is a game-changer. It is immediately available to leading-edge food companies dedicated to being at the forefront of groundbreaking innovation and to delivering new value- added product experiences to consumers. The Klear Can allows brand owners the opportunity to provide consumers a window into their high quality ingredients. Klear Can is an innovative technology in food packaging and definitely an alternative to metal cans for fruits, vegetables, soups, meats, and other products. In fact, the Klear Can is the first truly transformational innovation in the canned food preservation industry’s nearly 200-year history. In Q2 we will see the first commercial Klear Can launch so you will actually see the product on the shelves in Asia.  We need to mention the light weight of the can at 26 g; 36 % lighter than a metal can, the fact it is recyclable and microwavable, it can be produced in the most challenging geographic areas and tropical conditions seamlessly, a lower carbon footprint to that of other plastic cans, and the thin wall is retortable to temperatures up to 130°C without panelling due to the patented technology and the thin wall produces great contact clarity of the contents over the often thicker walled competitor’s plastic cans. Let us go ahead with coffee capsules. Consumer adaption of coffee capsules has been a global phenomenon. As consumer acceptance took off the concern over the recyclability became an important issue. Milacron saw an opportunity with our Kortec technology. The Kortec technology enables the capsules to be 100 percent recyclable. The key benefit of the injection moulded coffee pod is the ability to mould-in features that replace the addition of filters and other costly components. It also eliminates the need for a second moulding process, scrap, assembly costs and part weight. Most single-use coffee capsules are thermoformed from polystyrene, and are not recyclable. Coffee capsules made by the Kortec process are made of polypropylene. We need to mention the variety of moulding options on Milacron’s flagship high performance Ferromatik IMM platform. We offer stack tools up to 32+32 cavitations, single face 64 cavity tools, and upgrade options, where existing assets can be utilised to reduce capital investment. With multiple high cavitation systems installed and running, Milacron provides a proven technology in this market segment. Milacron also offers processing and part design development programs to prove out applications, shelf life and assure barrier placement working hand-in-hand with our customers. These product trials assure success and provide pre-production validation of all applications. Then we can talk about our PET Systems. Milacron launched its offering in the preform moulding market with the M-PET 300: a new servo-hydraulic PET system at NPE 2015. The Milacron M-PET system combines key components across Milacron’s product portfolio – machines, clamps, injection unit, end-of-arm tooling, hot runner, mould and robots – as a single solution. The M-PET series offers leading edge performance and low energy consumption plus new options for post mould handling at an attractive price-to-performance ratio. The system operates with Milacron’s Preform Tooling, as well as existing industry tooling solutions. The system is supported by Milacron’s single-source capability and global aftermarket support. We need to mention that this is not new to Milacron; we are factually the pioneer of PET preform moulding. We have re-entered the market with existing technologies, proven and configured to process PET preforms – both co-injection and mono-layer applications, offering a full turnkey solution. Our niche is custom applications where our iCOOL and iFLOW mould technologies will provide a notable cycle and part quality advantage through enhanced cooling and flow characteristics that are complimentary to PET applications. Our PET systems are fully supported through remote monitoring services, enhanced service contracts, and Milacron’s aftermarket network. Our promise is throughput, uptime and part quality. Let us talk about Blow Moulding. The new Uniloy All-Electric Shuttle Blow Moulding Machine was launched at K 2016. Manufactured in Milacron’s brand new, state of the art facility in Policka, Czech Republic, the NEW Uniloy All-Electric Shuttle machine specializes in the production of bottles, containers and technical parts from 100 ml up to 20 liters. This machine represents the first model of the NEW M-Series, 3^rd generation of Uniloy’s successful All-Electric Shuttle blow moulding machines. The new M-Series provides the benefits of all-electric, modular design, simplified and reliable components, reduced operating costs, and is clean room friendly without sacrificing performance. The new Uniloy M-Series Shuttle can process virtually all commercial resins enabling you to produce everything from tiny cosmetic containers to large industrial packaging and offers guaranteed production time, minimized downtime, lower maintenance costs, easy operation and consistent product quality. Uniloy has long been known as the premier supplier of intermittend, reciprocating screw blow moulding technology - “Recip” - famous for lightweight HDPE handle and non-handle-ware technology. Then Uniloy, on the Recip platform, has pioneered “clean blow” which means blowing containers with sterile air and sealing in the mould and “three layer” in white-black-white. The “Clean Blow” technology is gaining popularity world-wide for extended shelf, with or without the WBW and, when coupled with the WBW technology, the shelf life is even more significant. The real advantage for our Uniloy customers is adding capacity to address new markets by simply employing a technology for which they have significant confidence and experience for both shelf stable and extended ‘date code’ for fresh milk. Last but not least there is our closure system hot runner business. Mold-Masters’ hot runner SPRINT recently launched new “Color Change Tips” at K 2016. The new tips are engineered to far exceed the performance of similar competitive systems. The new SPRINT color change tip improves color change by up to 47% (vs. a standard gate tip). These new gating tips are available immediately as a standard package for all SPRINT systems and are compatible with the current tip as replacements. Mold-Masters’ SPRINT closure hot runners are engineered for speed. SPRINT is available in hot and valve gate solutions engineered for lightning-fast cycles, color changes, optimal part quality and greater durability for maximum uptime, while dramatically reducing overhead.

Goeke:  We are seeing sales traction and success within our current installations. Our PET systems offer advantages to our customers through flexibility in operator process controls, low energy consumption, tooling technologies, post moulding options, and cycle advantages. This development has leveraged the advanced technologies offered by Milacron and packaged them into a viable, and very competitive PET offering. If PET converters are looking for a new high output solution that supports custom applications or lower volume applications that are cost effective and reliable, they would be remise to not inquire into this dynamic platform offering.

Goeke:  We are focusing on PET converters who are looking for a strategic advantage. It is reasonable to say that many lower volume and specialty beverages are now available requiring lower cavitation, lower cost, and more flexible manufacturing solutions. This demand must be supported by flexible and low cost to operate and maintain turnkey PET systems; this is exactly what Milacron has to offer. This approach is enhanced through our tooling conversion and refurbishment programme which applies to competitor tooling. This is where Milacron demonstrates true range supported by affordable aftermarket support that advantages our customers.

Goeke:  Our customers continue to provide us with positive feedback and note that Milacron’s PET systems are the quietest, easily maintained, and impressive regarding low energy consumption based on the electrification of the system. Another key feature is the low cost to run a Milacron PET system. Aside from low energy, our systems utilise standard technology reducing the number of special higher cost parts - no servo valves are used - which also ensures parts availability.

Goeke:  We anticipate positive acceptance of our PET systems at a global level. The PET market needs a great alternative to the current industry leaders and our PET systems are positioned to fill this gap. Customized, lower volume applications for non CSD applications is where the market is heading. Water, read-to-drink teas, juices and dairy products are all on our radar. With our advanced and high cavitations co-injection PET technologies we are optimistic that we are fulfilling the needs to the market growth space.

Goeke:  As mentioned, with our electrified approach and toggle clamp platform, our PET systems will provide up to a 25% energy advantage over our competition. Our systems have aggressive dry cycles - for example, our M-PET 300 machine dry cycles at 1.6s, and our systems are quiet running at approximately 78db, and our post moulding options offer a wide range of flexibility to our customers. The fact that we can accommodate many competitor’s tools, and provide complete family mould offerings again introduces flexibility and efficiencies. Our Mosaic control platform introduces ease of set-up for the operator and remote monitoring provides assurance that Milacron can troubleshoot and support if necessary. With generous access to the moulding area of the machine from both operator and non-operator sides, tooling changes are fast and safe. This applies to both mono layer and co-injection PET system platforms.

Goeke:  Milacron is positioned as a global player in the PET market space with product offerings providing solutions for any PET application. We cover from 2 to 160 cavity tools with multiple clamp and injection unit sizes to suit throughput and application. We have systems to support custom moulding needs, lower volume needs and lab applications. We are priced to win and back our systems and technology with a Global team of expert Service Engineers and Aftermarket support.

Goeke:  The introduction of our M-PET 300 Co-Injection PET system with a 72 cavity tool was a great success. Milacron can produce up to 144 cavity solutions if necessary. This system houses our Kortec technology on a Ferromatik based platform. All of the benefits previously mentioned apply to this system including a fully electrified B injection unit which provides shot and screw position accuracy needed for optimized barrier placement.

Goeke:  Klear Can as well as co-injected preforms. The Kortec technologies have been successfully doing this for many years and there are many systems operating globally. Our M-PET systems have the ability to be outfitted with state of the art co-injection hot runner system and co-injection nozzles featuring Kortec technologies. Co-injection allows the simultaneous injection of two materials in the same mould cavity to produce a barrier solution. Our established, German designed, Ferromatik-Series machine platform provides our customers with a reliable injection moulding platform that introduces speed and efficiency to our industry leading co-injection hot runner technology. The system is designed to co-inject a bottle grade PET skin with an oxygen barrier core. The combination of these materials provide the mechanical properties and clarity needed for a PET container with an oxygen barrier to extend shelf life. Due to the simultaneous injection of both materials, there is no fill time penalty and the system is capable of running at monolayer cycle times.

Goeke:  This technology has applications globally in food, beverage and even buckets.

Goeke:  We are working with a number of customers on projects that anticipate multi-layer products/containers that will provide barrier and product contact advantages on Milacron’s injection blow technologies that would not have been possible prior to the acquisition of Kortec. The precision of Kortec technology, in terms of delivering very precise layers with a broad range of materials is something that we fully anticipate to have many pharmaceutical and medical applications. The Chinese are very aggressive in the area of injection blow moulding - particularly on price - especially in their own market. But world wide we have not encountered Chinese manufacturers as significant competition in that we compete in a different market and calling on customers that see Milacron as able to provide a different value proposition.

Goeke:  First of all, the synergies we are able to generate within the blow moulding business of Milacron are significant with a broad range of products and technologies: injection blow, continuous and intermittent extrusion, accumulator head, moulds and tooling along with an extensive global network of aftermarket parts, service and training support positions us well for the global market and a vast array of technologies. Then, when you realizse that the business unit folds in nicely with Milacron’s other plastics processing technologies - injection, extrusion, Kortec, Mold-Masters, DME and more, we have the opportunity to provide customer value unlike our competition.

Goeke:  Unrivaled global and local sales, support and service teams. Milacron’s product selection in injection, extrusion and blow moulding, co-injection, hot runners, process control systems and mould components goes well beyond the customers’ initial purchase. We have a vast array of aftermarket capabilities including preventative and traditional service and repairs, spare and replacement parts, and retrofits and rebuilds. We recently revamped our aftermarket offering structure. Customers can expect expanded language capabilities, faster response times to inquiries and service requests. An additional 21 field service technicians have been hired in North America bringing the total to 45 in order to better serve customers. The European One Milacron Customer Care Center houses a multilingual team of 32 customer service agents supporting Ferromatik injection moulding machinery, Uniloy blow moulding, DME mould supplies and CIMCOOL fluid technologies in 11 languages. We have invested over 25 million USD into our aftermarket service and parts offerings to serve our customers entire lifecycle over the last 12 months. These investments have driven double-digit growth over the past year. We’re ensuring Milacron has adequate feet on the ground, hands on the machines and having the right part at the right time to ensure our customers machines are running at peak performance levels.

Goeke:  No major comments here except that any changes made will impact all businesses in the US and abroad and we will adapt as required.

Goeke:  Milacron is on a growth trajectory being supported by both our core and new products. By 2020 I would anticipate that many of our products that are new now (like Klear Can) will have a strong hold in the industry all over the world.