Window and Door — June/July 2012
Change Language:
Industry Taking Steps to Retool
John Swanson

Manufacturers may be ready to invest in new equipment again

Window and door manufacturers are retooling, with equipment suppliers reporting more activity of late. New machinery purchases are still limited by the wide availability of used equipment – and many companies remain cautious about the market outlook – but investment in production operations appear to be on the rise.

Opinions are definitely mixed on how big that increase may be. "We see increasing strength across the board – among larger customers and among smaller customers," reports Morgan Donohue, VP of sales and marketing at Erdman Automation Corp. "The market is definitely stronger this year than last year. We've seen a pick-up in both inquiries and actual orders."

"We have noticed a significant increase in equipment orders and quoting activity over the past several months, specifically to IG manufacturers and window companies making IG," reports Jay Campbell, sales manager/ residential and commercial products, Billco Manufacturing Co.

Other suppliers are more cautious. "The market for machinery with door and window manufacturers is still very lean," says Stephan W. Waltman, VP of marketing communications at Stiles Machinery Inc. Pointing to continued weakness in the housing market, he adds, "I expect all our door and window customers are still struggling."

"We are definitely seeing interest, but the purse strings are still closed in most cases," reports Mike Biffl, national sales manager at Stürtz Machinery. "Independently-owned manufacturers are more inclined to invest now, but the investor-backed companies seem to be remaining in a holding pattern until there is some steady increase in business volume."

"We are seeing an uptick in interest and inquiries, but that doesn't necessarily mean companies are going to start buying new machines again," states Joe Shaheen, director of sales and marketing at GED Integrated Solutions. "We see the equipment market continuing on its challenging pace. We believe many people are looking ahead and trying to get a feeling for what's out there."

REFURBISHMENT

There is some demand and some capital available, Shaheen continues, but much of that is going into refurbishing and rebuilding machines. "Many manufacturers have equipment that's sitting on the sidelines. They're starting to develop new product lines, but they want to adapt and retool machines where they can."

"One of the challenges in the equipment market today is the unfortunate, numerous plant closures across the country," Campbell agrees. "This has resulted in manufacturers consolidating existing equipment and a surplus of used equipment in the market. Obviously, this has an impact on selling new machines."

"Retrofits and rebuilds continue to be the bulk of the volume we are seeing," Biffl reports. "Equipment orders are somewhat limited to replacement of old, worn out machines."

"Looking at the U.S. market for the next several years, we don't see that situation changing too much," Shaheen says. "When manufacturers set up new lines, it's likely that we'll see scenarios where there will be a mix of refurbished and new machines to complete the lines."

Donohue, however, sees the situation changing. Retooling and refurbishment have been the main story for equipment suppliers for the past three years. It's still part of the business, but it's becoming less important. "More manufacturers," he asserts, "are ready to invest in the new."

NEW PRODUCTS

"The majority of new investments are coming from fabricators that are introducing new products to the market," suggests Chris Cooper, senior sales engineer at Joseph Machine Co. He describes the overall market as fragile still, but points to a strong first quarter in 2012. Specifically, Cooper sees more companies buying new machines to produce vinyl windows and doors for the commercial market.

Greg Godbout of Rangate Inc. reports that wood window and door makers are not in a mode to buy new machinery, but many are looking at new tooling. The investments they are making in cutting tools are "a sign that the market is in first stages of growth," he says. "Companies are willing to invest in developing new products."

Both Cooper and Godbout suggest at least some of the new windows and doors under development are designed to meet or exceed more stringent performance criteria. Shaheen also points to new codes and product criteria – most specifically upcoming changes in Energy Star--impacting product demand, and eventually impacting machinery demand (see sidebar). "We're seeing people looking at designs that give them the option for triple glazing." Not many companies are ready to embrace triples fully yet, at least in the U.S., but a real change will come when Energy Star requires triples, he predicts.

There was much discussion about the need for triplepane capabilities a year or two ago, but that has faded, Erdman's Donohue states. "It's probably in the back of the mind for a lot of customers, but it's not something they're talking about a lot."

UPGRADING OPERATIONS

When the new construction and remodeling/replacement markets were booming, window and door manufacturers purchased equipment simply to expand capacity. That is rarely the main goal these days, most suppliers agree, but other traditional reasons to invest – increased efficiency, enhanced quality and reduced labor – remain true for companies today.

"The manufacturers who are investing right now are trying to improve efficiency," says Stürtz's Biffl. "In many cases, labor forces have been trimmed due to reduced manufacturing requirements. The companies that have the foresight and the financial wherewithal to invest right now want to streamline operations to avoid hiring large numbers of employees as soon as there is a spike in business." The supplier of vinyl fabricating equipment sees manufacturers wanting to accommodate growth in demand without growing their labor force.

"Businesses continue to do more with less," Billco's Campbell states. "We have seen additional demand for machinery that minimizes maintenance costs and overall operating costs." Some are purchasing more automated solutions to lower labor costs as well, he adds.

The unemployment rate may be fairly high nationally, but finding qualified workers is still a challenge for many manufacturers, Erdman's Donohue states. In some towns and some regions, particularly where the economy has recovered more, it is difficult to compete with other industries, he notes.

Donohue notes two other factors for the increase in demand. First, it's been a long time since many manufacturers have made capital investments. Machines are wear ing out. Manufacturers can't afford to put off reinvesting any longer. Second, he suggests, more companies see the value in the quality and consistency that machines can deliver.

Joseph Machine's Cooper offers a similar perspective. Manufacturers understand they need to keep their products cost competitive and give their customers higher quality. They also need the flexibility to handle such changes as new hardware options that are being introduced.

In the woodworking end of the business, the most popular machinery discussions concern CNC machines, automatic sanding and automatic finishing, reports Stiles' Waltman. "These tend to have the greatest impact on cost and quality." He also points to the importance of flexibility, noting that companies purchasing machinery today are doing so to change their processes from volume to velocity. "Mass manufacturers are burdened with older technology," he states. "New equipment allows them to respond to market demands of special production in quantities of one."

Looking ahead, all these suppliers report continued efforts to develop new manufacturing technologies, with flexibility, ease of maintenance, reduced labor, and increased quality all cited as goals. They also agree that at least some window and door manufacturers are gearing up for market recovery. "Over the next 12 to 18 months, our biggest opportunities will be with companies who are strong in their markets and hope to grow their market share," Biffl concludes. "The manufacturers who are open to investing now in a slow economy will come out the other side with an edge on the manufacturers who were more conservative and have taken the 'wait-and-see' approach."

New Options Emerge in IG Equipment

Last year, GED Integrated Systems introduced the Automated Tri-Lite Assembly System, an automated line for producing triple-glazed units at a competitive cost. Featuring unique capabilities such as "touchless" handling of the center lite of the triple-lite IG, the line has received positive reviews throughout the industry, reports the company's Joe Shaheen.

"Everybody in the industry has been very impressed. People came to see it at the GlassBuild show last year, and they are going to see the beta line that's up and running," he says. "Everyone says it's a great step forward in technology."

However, there's "absolute hesitation" in the U.S. to make that kind of investment, he continues. "For most manufacturers, it will be hard to justify the line until the demand for triples is there." That won't happen until codes or Energy Star require that level of performance.

Right now, GED sees the Environmental Protection Agency moving to a .27 U-factor requirement for the next Energy Star update, expected to take effect in 2014. As that U-factor number gets closer to .25 or lower, more manufacturers will move seriously into triples production, Shaheen says. That is happening in Canada, he notes, but in the U.S, the shift hasn't started yet.

For most manufacturers making triples, such units account for 3 percent to 5 percent of their production, he says. Noting that the GED line is designed to integrate production of duals and triples, Shaheen expects that once companies start seeing demand for 10 to 15 percent of their production to be triples, an investment in such equipment will be more easily justified. "We still think there's a great opportunity with the Atlas line," he concludes. "We're just not quite there yet."

Erdman Automation, on the other hand, sees now as the right time for its new line of IG equipment. It has developed a new modular system designed to bring the benefits of automation to companies with lower volume needs, Donohue reports. For production of units using flexible spacer, the system is designed to produce about 400 units in an 8-hour shift with two people, and also costs less than most other automated IG lines on the market, he notes.

Donohue sees an untapped niche for the equipment, as lower volume IG producers have been looking for higher levels of automation, but had no alternatives. "The industry increasingly sees the value of automation. People appreciate the consistency, the quality. They see the payback," he continues.

The new line will be unveiled at GlassBuild America, scheduled for September in Las Vegas.

"The companies that have the foresight and the financial wherewithal to invest right now want to streamline operations to avoid hiring large numbers of employees as soon as there is a spike in business."
VIEW ALL ARTICLES
Message
SEND