The economic crisis visibly impacted 2009 and also hit Engel hard in the fiscal year 2010. However, targeted measures helped to absorb most of the impact. New products and services, financing concepts and investment support for customers, accompanied by innovative sales activities and strategies are already driving an upswing at Engel that will lead to growth of more than 35 percent in the new fiscal year.Engel is planning strong growth of 35 percent worldwide for the fiscal year 2010/11. Now that Engel's market share on the continents has grown to a historic peak, receipts of orders are stabilising at a higher level. The production facilities in Korea and China are already working at full capacity. The utilisation rates at the Austrian facilities are developing also very positively, mainly due to the reactivation of the European Market and the market launch of new attractive products like the Engel duo pico and e-max machine series and the Engel viper robot series.
Willingness to invest in capital goods is extremely low in times of crisis. Last year, existing machine capacities of the manufacturers were not fully utilised, which thus led to the postponement or cancellation of investments in new machinery. The crisis was clearly felt in the demand for injection moulding machines and hit this branch of industry extremely hard. Engel's business year was also characterised by a massive drop in demand for injection moulding machines.
This highly recessive development started in some eastern European countries in the spring of 2008 and is still continuing in some countries, e.g. in Scandinavia. The initial signs of the crisis were identified in Poland in May 2008. At the end of the year, many regional economies collapsed. Sweden was one of the last countries in Europe to be hit by the crisis in March 2009. By now, some regional economies have recovered (e.g. Russia, Poland or Austria). There were very few markets (such as Brazil) in which the economic crisis and its effect on the demand for injection moulding machines had virtually no impact.
Since October, the signs of a recovery of the economic situation in general have been pronounced. However, stabilisation is still uncertain.
All told, the injection moulding market in Europe collapsed by about 50 percent from 2008 to 2009. Standard machines and the Automotive and Technical Moulding market segments in particular were most severely affected by the downward cycle. While the standard machine segment plummeted by around 70 percent, the demand for injection moulding machines in the Automotive market segment dropped by around two thirds, and by about half in Technical Moulding. The Medical and Packaging segments were far less severely affected by the crisis: demand for injection moulding machines dropped by about one third here
The difficult economic situation worldwide hit Engel hard. However, Engel responded with numerous internal, sales and product policy related measures to successfully compensate for the subdued level of incoming orders. In addition to a shorter working week (between April and November 2009), deferment agreements and sabbaticals, it was mainly due to boosting global sales activities and to a number of innovative solutions in our product portfolio and in our system solution provider business that we were able to substantially mitigate the effect of the crisis.
