Research on the potential market share for multi-axis solutions in packaging

To arrive at an estimation of the future, and how to find numbers that could define the markets for the multi-axis products in the packaging machinery, the existing research data has to be modified carefully but with expectations to find out how much the revenues could be in a certain sector and country. In the MPYB research the total machinery production in Europe is divided into machinery business fields, as shown in table 2. The revenues in table 2 for 2008, 2009 and 2010 are genuine and after 2010 they are based on predictions with estimated CAGR. Packaging machinery is highlighted in light green. First, the revenues in MPYB were examined after 2010 for the first half of 2011 with the result that the economy seemed to have risen slowly but in November 2011, MPYB updated the estimation. The first prediction for 2011 and years onwards from that point showed that the recovery was slow but the update at the end of 2011 made some corrections to the numbers. One essential point was that it looked as if Italy was going to take first position in the packaging machinery business in Europe, but the update saw the position fall back to second place after Germany.

Table 2. European production of Machinery. [14]

European Production of Machinery

Revenues (€M) 2008 to 2015

Machine Type 2008 2009 2010 2011 2012 2013 2014 2015 CAGR 10 - 15

Agricultural Machinery 29202,6 23042,5 25407,2 27692,9 29099,1 30225,5 31214,4 32214,5 4,9%

Food & Bev & Tobacco Machinery 21742,1 17869,8 19999,7 22019,9 23371,0 24560,2 25660,9 26791,0 6,0%

Furnaces & Furnace Burners 4774,2 4043,4 4480,3 4891,5 5150,0 5364,3 5552,8 5739,7 5,1%

Machine Tools 25922,6 18052,0 20048,9 22124,8 23156,4 23979,9 24674,8 25310,5 4,8%

Materials Handling 62053,0 49425,2 54620,8 59914,7 63460,6 66529,2 69282,4 72090,4 5,7%

Packaging Machinery 14934,3 12148,9 13544,9 14824,3 15590,1 16202,5 16732,4 17259,2 5,0%

Paper & Paperboard Machinery 9748,4 7335,0 8051,7 8743,6 9176,6 9524,6 9814,4 10104,1 4,6%

Printing Machinery 10084,8 7589,9 8411,1 9108,5 9503,0 9810,8 10048,2 10284,9 4,1%

Robotics 2683,1 1897,2 2083,4 2260,8 2360,1 2433,0 2491,9 2546,4 4,1%

Rubber & Plastics Machinery 13584,9 10070,8 11160,2 12131,6 12681,6 13105,3 13446,3 13775,7 4,3%

Semiconductor Machinery 4369,5 2912,7 3927,7 4302,1 4676,4 4852,5 5035,6 5379,4 6,5%

Textile Machinery 12395,3 8991,6 9841,4 10632,3 11044,1 11354,7 11606,9 11845,4 3,8%

Woodworking Machinery 6925,0 4929,6 5485,1 5984,3 6274,0 6502,3 6700,1 6894,7 4,7%

Other Machinery 152575,2 120687,6 132721,0 144608,8 152298,9 158652,8 164190,7 169638,0 5,0%

Revenues (€ M) 370 995 288 996 319 783 349 240 367 842 383 098 396 452 409 874 5,1%

Table 3 represents the total markets for automation products in Europe. The category of Other Machinery has the largest share with an annual 6 093 Million Euros in revenues for automation products. The Other Machinery category contents in the business sector includes the following machine types; Commercial HVAC, Commercial, Service, Etc., Electronics & Electronics Assembly, Flat Panel Display, Medical & Scientific, Metalworking (Excluding machine Tools), Mining and Oil & Gas.

The second biggest share in automation products in European machine manufacturing is held by Machine Tools with almost 3 000 Million Euros in annual revenues which is followed by Food, Beverage & Tobacco Machinery with 2 811,8 Million Euros and Materials Handling with 2 745,4 Million Euros. The fifth biggest (fourth individual sector if Other Machinery is not taken into consideration) share is held by Packaging Machinery with 2 594,1 Million Euros and 11,0 %.

The aforementioned machine types are clearly the highest in revenues. The second largest sector after packaging is Rubber & Plastics Machinery with 1 586,5 million

Euros in revenues being only a little more than half of the packaging sector. The update in MPYB in November 2011 did not change the figures for automation or any other products inside the Machine type sector.

Table 3. The European Market for Automation Products in Machinery in 2010. [14]

The European Market for Automation Products in Machinery in 2010

(Millions of €)

Machine Type Automation Market % Share

Agricultural Machinery 508,2 2,2%

Food, Beverage & Tobacco Machinery 2811,8 12,0%

Furances & Furnace Burners 62,7 0,3%

Machine Tools 2988,1 12,7%

Materials Handling 2745,4 11,7%

Packaging Machinery 2594,1 11,0%

Paper & Paperboard Machinery 611,9 2,6%

Printing Machinery 1000,9 4,3%

Robotics 468,8 2,0%

Rubber & Plastics Machinery 1585,6 6,7%

Semiconductor Machinery 443,5 1,9%

Textile Machinery 1141,6 4,9%

Woodworking Machinery 455,3 1,9%

Other Machinery 6093,1 25,9%

Revenues (€ M) 23511,0 100 %

In the theory section, the automation share was divided into different sectors with the share in Euros and percentages for certain sectors in packaging machinery production, which are based on OACE categorization. MPYB divides the automation sector in a different way, and for further investigation these two ways are combined. The reason being that OACE’s genuine numbers end at 2007 and from then onwards, the revenues are based on predictions. Usually predictions provide a good starting point for closer examination but after 2007, Europe and actually the whole global economy have suffered a great recession, which turned the production curves steeply downwards and this was not taken into consideration when the predictions were made.

Pictures 21 and 22 represent the automation categorization under packaging machinery between OACE and MPYB research. The category definition in picture 22 is also a

general definition for the automation of all the machinery types examined in MPYB, for example for Agricultural machinery, Robotics and every other type mentioned in table 3. Picture 21 is the definition according to OACE which divides automation into five different groups where MPYB has done the same with six groups in picture 22.

Picture 21. Packaging machinery automation definition according to OACE.

Picture 22. Packaging machinery automation definition according to the MPYB.

Packaging machinery - Automation

PLC Motor Drives Visualisation

Components Motion Control Other Automation Equipment

Packaging machinery - Automation

Motors & Drives

Mechanics for electric drive

systems

Hydraulics

Automation and Motion Control

Products

Pneumatics

Linear & Rotary Handling Equipmen

As mentioned previously, OACE gives genuine numbers in revenues only up to the year 2007, which was followed by the great recession beginning at the end of 2008. MPYB genuine numbers are valid up to 2010 and the predictions were updated in November 2011. From then onwards the numbers for further examination are taken from the MPYB but the categorization for automation components is according to the OACE definition. For 2007 packaging machinery production, OACE states that the total production in EMEA was up to 13,8 Billion Euros and the prediction for 2008 was 14,6 Billion (CAGR 5,9%). According to table 2, production in Europe in the packaging machinery business was 14,9 Billion Euros in 2008 showing that the economy has been rising fast; exceeding even the OACE predictions. To verify that these two studies can be combined, the comparison is made with the annual revenues in the packaging machinery production business. The only defect in the comparison is that OACE handles EMEA where the MPYB states revenues only from Europe. With the lack of newer research for a deeper analysis in the packaging business, further predictions have to be made using as up-to-date revenues as possible and existing data for the share of automation components.

The share in packaging production for the Middle East & Africa is relatively small because the OACE prediction for 2008 for the Middle East & Africa is 200 M€. The total share in percentages is 1,37 %;

While the MPYB only looks at production in Europe, the share for the Middle East &

Africa has no great part in the total production in packaging machinery. In OACE research, a certain component share in percentages in a machine is an average of the total production, which reduces the value of missing Middle East & Africa. The research (OACE) does not explain how the component share occurs by country, only the averages per sector are available. In the later part of this thesis, the Middle East and Africa, as well as every non-European country are ignored.