With the prestigious green-field projects of cigarette manufacturers being far and few these days, and with major capital investments often being put on hold or shelved altogether, manufacturers of secondary machinery are counting their options.
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And options there are plenty. Strategic alliances between companies, sharing mutual expertise and maximising synergies, is one of them. Recent months have seen some major announcements. Hauni Maschinenbau and Key Technology signed an OEM (original equipment manufacturer) agreement in September 2009. Wolfgang Benz, executive vice president tobacco division at Hauni, commented: "Hauni complements Key's product line with a portfolio that includes machines and systems for every processing step." Nico Waxweiler, member of the board at Luxembourg-based Imatec, a manufacturer of customised equipment, mainly in the packaging sector, proudly admitted to a triple strike in co-operations - one in July 2009, with Cymco of Belgium, a specialist for weighing and dosing cut tobacco, and just a month later, with Germany's Emkon, a machinery manufacturer with considerable packaging expertise, especially in the RYO/MYO segment, and thirdly with a new joint venture in Indonesia.
Less new equipment
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The present drop in orders for new machinery is partly due to the overall economic situation, but one of the major reasons stated has been the concentration of large cigarette manufacturers, looking to streamline and standardise their equipment pool, which is good news for the preferred supplier but can lead to a complete loss of equipment sales for other manufacturers. Basically, three things have happened here for the makers of secondary machinery. For some, this form of globalisation has opened the door to communicating directly with the headquarters of the multinationals and the global decision makers; however, for others it means working through more layers of decision makers, making the sign-off process more intricate. Others have profited from the fact that the market for updates, retrofits, rebuilding and overhauling of existing machines has increased considerably. Some manufacturers are not too unhappy about this situation, as the supply of spare parts and assistance provides higher margins than the ultra-competitive prices for new installations. And thirdly, it has boosted innovation, sometimes radical, as a ticket for survival. Cigarette manufacturers are constantly looking at improving efficiency, reliability and cost structures. This challenge has proven a tremendous opportunity for suppliers of innovative "add-on" machinery with built-in compatibility to existing lines, even from other manufacturers. The integration of innovations into existing machines is a growing business. The past few years have seen a spate of new products, with new, better and less expensive materials being used, also for spare parts, as well as machines with lower maintenance requirements.
Speed and multiples
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The market trend is gradually consolidating into two segments, the sophisticated high-end market, where the major brands focus on machines for high-speed and high-volume production, and the small to medium flexible segment, for multiple short runs, quick line changes and short downtimes. A number of industry people have secretly commented that life could become a squeeze for some of the medium-sized machinery manufacturers in the future. All other things being equal, only the major machinery suppliers will be able to fund the horrendous research costs involved in developing the "big solutions", and small manufacturers will continue to have the benefit of low overheads, leaving medium-sized companies somewhere in the middle. But, tobacco is a resilient plant, and so are the tobacco industry and its suppliers. Far from being overtly pessimistic, specialisation is seen as key to the future by many European manufacturers. China remains a big unknown in the equation and could be looking at a different approach: diversification. As a Chinese philosopher once said, "Man with only one chopstick go hungry quickly." The Xuchang Tobacco Machinery Company, with its staff of 1,100, is the backbone of tobacco machinery in China and manufactures a variety of machinery. As the majority of customers are small to medium-sized, much of the machinery is geared to lower speeds of 5,000 cigarettes per minute. The ZJ114 is the star performer, robust and flexible. But, as a spokesman for Xuchang told TJI, the company has great ambitions and intends to expand its market share outside the home market, with Asia being first in line. To be successful, Xuchang is also looking at expanding its product range and product functions to cater to the big cigarette factories. Maybe an interesting partner for future alliances?
Where are the markets?
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Asia, Asia, Asia, end of article. Well, not quite. Europe and the US may be stagnant or slightly declining markets, but this is where the multinational cigarette companies have established their centres of excellence. It is where the demand for new machinery is determined, where new ideas are evaluated, machinery specifications laid down and extensive product trials are run. The hurdles are steep, yet once a product has passed with flying colours, the rewards are high - multiple orders worldwide. Of course, this does not mean one can neglect local representation, on the contrary, the two go hand in hand. So it came as no surprise when Imatec announced its joint venture in Indonesia, Imatechno, in August 2009. Compared with the cigarette market, the situation is a bit more predictable for Dutch company Ensa Machine Bouw, a major supplier of machinery to the cigar industry. While cigar sales have slumped over the past years in some of the major markets (see "Cigars under a cloud" on page 82 of this issue), they are still holding up fairly well. The concentration of cigar companies has not been as pronounced as in the cigarette industry, it is still largely the same people, just with different business cards. The cigar machinery business is more evenly spread globally and not as heavily Asia-focused.
The highlights 2009
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By all accounts 2009 was a good year for innovative ideas and products, not to forget customised solutions. As Penka Manolova, marketing manager of Aiger, told TJI, it has had an extremely busy year, with a number of special filter projects, some trend-setting work on reducing acetate consumption in filter production, the development of modular combining machines for producing multi-segment filters and - the highlight of its year - a development project for inserting flavoured capsules into filters at a speed so far unattained by any other machine. And filter making solutions are not the only passion at Aiger, said Manolova, designing packaging solutions is another one. Its most recent solution, the wallet pack plus, has just been patented in the US, and a number of patents are pending. The Heinen Köhl line-up for highlights 2009 includes the FAS flavour application system. As Thomas Scheuer, sales manager at Heinen Köhl, proudly told TJI, "The FAS has taken the market by storm." The FAS is a modular unit for applying flavours to cigarette makers, filter makers or paper, either as a single or twin track version. Flexibility, ease of handling and foolproof safety back-up are all major product features. According to the company, it is compatible with all makes.
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Hauni has launched a double pack for the 2009 highlights. Their new KAG 3 maker feeder pays tribute to increasing diversification, with more frequent brand changes and smaller blend volumes. In addition to the KAG 3's flexibility, the main feature is the gentle treatment of tobacco, the company claims. The non-pneumatic solution, Hauni said, helped avoid degradation and preserve the quality of the tobacco. The second Hauni highlight is the BD bobbin depalletiser, where two bobbin loaders get their bobbins automatically from a gripper straight off the pallet. This ensures a rapid and dependable supply of cigarette paper, tipping and plugwrap bobbins, which is especially useful on high-speed lines and makes life considerably easier for the operator, the company said. The BD can also be connected to automatic guided vehicles or linked to the customer's central materials management system. Highlights for 2009 at Emkon were the new series of high-speed pouch packers, the Emkon Speed 180 and the Emkon Flex 120, as well as the new Emkon Strike 200 flexible parceller (see box on page 69). The Speed 180 is the world's first ever pouch packer to run at speeds of 180 pouches per minute, the company claims. The Flex 120 offers a speed of 120 pouches per minute, still pretty fast, and can combine high-speed packaging with various pouch formats, filling weights, bag widths and materials. The modular design allows upgrading of options, such as booklet feeders or promo add-ons, at any time (see also TJI 3/2009). Imatec's nominee for the highlight 2009 is its RYO-MYO packaging line, which includes handling of the tobacco, dosing and weighing of the tobacco portions, filling pouches and ending up with a palletised product. Their pouch-making machine, the PMA 120, can also manufacture empty pouches as well biodegradable tobacco pouches. At Italy's Sasib, nomination for the 2009 highlight was an intriguing one: either its Alfa Ram 500 packs-per-minute soft cup packing line or its new company premises. In the end, the attractive modern architecture won.
What to expect in future?
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Martijn van de Ven, managing director at Ensa Machine Bouw, has a full programme ahead. It is developing a cigar over-rolling machine named Mide which can run 100 double lengths per minute, corresponding to 200 cigars. Another machine is being developed for complete cigars and will run at 60 cigars per minute. Ensa has also patented a glue system which decreases the amount of glue needed and applies the glue at just the right position. This results in higher output and less moisture in the cigars. The exact positioning of the glue also means the machines become less contaminated. Sasib is working on the introduction of its new Cube Line, a high-speed making/packing line suitable for small and large manufacturers alike. The Aiger Group has dedicated a major budget to research and development for the next three years and is focusing on filter-making technology and novel packaging to meet, and even create, new trends. Imatec is looking at the packaging of conical cigarettes, Emkon has some trendsetting RYO/MYO packaging in the pipeline and Xuchang may come up with some surprises in 2010, not to forget all the other creative minds in the machinery industry. 2009 has been a more than interesting year so far, and 2010 looks equally promising. Enditem
