Piovan is ready for growth: PMM Insight

John Erkert, Piovan’s regional CEO for North America, expects the plastics industry economy to accelerate in 2025.  

Piovan is world’s biggest supplier of auxiliary equipment to the plastics industry. The Italian-based company had revenue from its polymer related businesses of $574.4 million in 2023, with $333.9 million coming from North American sales. Its brands include UnaDyn, Conair, Doteco and Thermal Care.

In this PMM Insight interview, Erkert said there has been increased interest in Piovan products since NPE but not a bump in sales. He said uncertainty in the economy caused by the U.S. presidential election is currently holding back sales. 

He also predicted more manufacturing of Piovan products in North America in the future. 

Erkert is responsible for the Piovan Group’s North America region. He has been a leader of group companies for more than 29 years, including serving as CFO of Rapid Granulator, IPEG Group, and Piovan Group North America and was COO before being promoted to CEO of the North America Region. 

Before coming to the group, Erkert spent nine years as a CPA with KPMG and one year with RSM. He received his BS in Business Administration and Accountancy from MacMurray College and his MBA from Northern Illinois University.  

He was also an adjunct assistant professor in the MBA program at Rockford University.  He sits on several companies’ fiduciary board of directors. 

If you enjoyed this interview, check out our recent chat with Conair President Jason Ganim, and subscribe to PMM Insight on your favorite podcast app.

Transcript

PMM: Hello. Welcome to PMM Insight, a Plastics Machinery & Manufacturing podcast. This is an episode of PMM in Person, where we talk to the most interesting players in the plastics industry. I am your host, Ron Shinn, editor of PMM. Our guest today is John Erkert, the Piovan Group's regional Chief Executive Officer for North America. John was named to the role in May. He has nearly 30 years of experience with companies that are now part of the Piovan Group, and was Chief Operating Officer before being named CEO. Piovan purchased Universal Dynamics in 2008 to establish a major presence in North America. It moved UnaDyn into a new factory building in 2017 and acquired Conair in 2021. Thank you, John, for speaking with PMM today. 

Erkert: You are welcome.  

PMM: So the first question, do all of the Piovan brands in North America, including Piovan UnaDyn, Conair, Doteco, Pelletron and Thermal Care report to you?  

Erkert: Yes, they do. All Piovan Group North America entities and brands are within my responsibility, and that includes the Piovan brand equipment that we sell in Canada and Mexico. So our North American region represents over half of the Group's revenues. 

PMM: Approximately how many employees does Piovan now have in North America? 

Erkert: We have approximately 700 employees in North America, and we are by far the largest auxiliary equipment manufacturer in our markets in the world. We're larger in North America than some competitors are in the entire world. 

PMM: So Piovan Group itself is currently being acquired by Automation Systems S.p.A., an Italian private equity investor. Do you expect that will change how Piovan operates in North America?  

Erkert: Well, I think it should accelerate growth internally and through acquisitions based on a long-term buy and build strategy to create value for our customers. Nicola Piovan remains our chairman, and he's the third generation of the family in the company and is still a large shareholder, and Filippo Zuppichin remains our CEO, leading the company. 

PMM: Are there plans to consolidate any Piovan operations in North America to take advantage of economy of scale? 

Erkert: Well, as you mentioned, the acquisition of the IPEG companies happened in 2021 to 2022 and some of these efforts started almost immediately. Our brands operate autonomously. As you can tell, we have lots of different brands in North America and in the world, but we do take advantage of the economies of scale for procurement and also the benefits of sharing technology, developing products and testing. And we already had a shared service strategy under IPEG in North America, and we continue that strategy today because that serves as a platform for us for future brand acquisitions. So we've built this infrastructure in North America to be able to support the brands and to enlarge the family. 

PMM: How do you see the plastics machinery and equipment market in North America now, and then let's say in the next 12 months?  

Erkert: Well, I believe that the market has been decelerating from the expansion in the 2022 to 2023 years, and that the change in momentum will soon swing to acceleration in 2025. Capacity utilization by our customers and the plastics industry has been ticking down in 2024 but final demand of their products is rising and is very strong, and so expansion, I believe, will bounce back in 2025. 

PMM: That's good to hear. So what are Piovan’s strengths in the North American market? 

Erkert: Well, I would say each one of our brands has a strong name and strong recognition of that name in the industry, and we have very strong leadership and management teams in each one of the companies. So building upon their strengths, their brand recognition, their ability to compete for business, their competitive advantages, those are things that we can continue to do to strengthen the company and also to expand. And outside of plastics, to some extent which we have done as a group, into food and beverage, enhancing the film business, enhancing recycling, the powder business, and especially the aftermarket business. 

PMM: Have you seen any bump in sales from NPE? 

Erkert: We have seen a nice increase in activity. It is a presidential election year, and so we do see some caution from people buying products, but the amount of interest in the products that we introduced at NPE for all the brands has been very high. I think processors are very excited about the benefits of AI technology in auxiliary equipment and other equipment. They also like complete system solutions, saving energy, available service agreements and equipment designed to help overcome the shortage of skilled workers. So we've seen a lot of interest from Conair, from Piovan, from UnaDyn, from Thermal Care, Pelletron, Doteco and all of the products that we exhibited at NPE, where people are really interested in the technology, and they're interested in companies who are part of a larger group that has the scale to develop these things. So if you're asking, has that turned into lots of increased orders. It certainly has turned into orders. But going back to the beginning, I would say, being a presidential election year and some of the uncertainty with the economy, I don't think that it's going to be a record year for anybody in 2024. 

PMM: Conair is your biggest brand in North America. How has incorporating that into the Piovan Group helped your customers, or how has it impacted your customers in North America?  

Erkert: Conair has a very solid foundation in the North American market. The breadth of their equipment offering, the experienced staff and the capabilities of Conair are unmatched. The customer base for Conair has been built over the last 68 years, I believe, since it was 1956 when it was founded. But all of our brands offer customers solutions that best meet their needs. So what it does in having this basket of brands for the Piovan Group is some companies may like the Piovan legacy products and design through Italy or through UnaDyn or through Doteco or some of the other companies that were part of the Piovan Group. Some customers like what Conair has been doing for the last 68 years. Some customers like to buy their heat transfer and their water products from Thermal Care, and some customers like to buy their dedusters and conveying systems from Pelletron. So I think having Conair in that family of brands allows the Piovan Group to leverage R&D, to leverage ideas about how the products work, even if they're designed differently by the different brands, and it allows a lot of cross branded collaboration without jeopardizing the legacy and the history and all the designs that have been built in the individual brands like Conair and like Piovan.  

PMM: I know that across all of your brands, you do a lot of manufacturing in the U.S., but you also still bring in products from Italy and elsewhere that Piovan manufactures, don't you? 

Erkert: We do bring in some equipment from Italy for the UnaDyn product. We do have some equipment from Italy that we utilize in the Conair product, but the vast majority of the equipment that's sold in North America is assembled in our North American factories. So we have fabrication in Niles. Illinois, for Thermal Care. We have fabrication for UnaDyn and Piovan products in Fredericksburg, Virginia. We have capabilities and fabrication for Conair downstream extrusion equipment in our Pinconning, Michigan, facility. And we have our main Conair manufacturing facility located in Franklin, Pennsylvania, and we also have our office in Lancaster, Pennsylvania for Pelletron, which is not fabrication. It is more light assembly and more of an office and engineering design facility, as well as our office in Toronto for Piovan Canada, and in Carreter for Piovan Mexico. Conair as well, has some foreign subsidiaries in Asia and in Mexico and a joint venture in India. And Pelletron has a sales office in Germany.  

So those aren't production facilities, per se, but we try to make the products for the region, in the region. So the strategy isn't to make everything in Italy and sell it in North America or in Asia or in South America. It's to make things in Brazil for South America. It's to make things in our plants in North America for North America, it's to make things in Asia for Asia. There are products that come from Italy, and, in fact, Piovan UnaDyn and Piovan branded products. We're implementing more and more of those in the Fredericksburg facility of Piovan UnaDyn today, because it's a good design, and people like the Piovan design, and so we're integrating some of that into UnaDyn's products. 

PMM: Assuming the plastics industry economy picks up in the next year or two, I would assume we're going to be seeing even more manufacturing in North America? 

Erkert: Well, if you research Piovan Group, you'll notice they're very vertically integrated, and we, as the legacy of IPEG with Conair and Thermal Care and Pelletron, we were not that vertically integrated. So I would say the prospects are very bright that we continue to vertically integrate in the North American region, to make more and more of our products, to expand our supply chain, strengthen our supply chain, and do more and more in North America. 

PMM: When I visit plastics processors, one of the things I almost always come away with is that while they say that they are interested in the newest technology, like artificial intelligence, for example, that you brought up a little bit ago, but when it comes down to it, they buy machinery and then only use a small part of the technology they've got sitting on the plant floor. In fact, in many cases, I think companies tend to over buy based on what they really need. But you mentioned that at NPE, there was sort of excitement over things like AI and some of the latest bells and whistles. Could you talk just a little more about that? 

Erkert: You know, it is one of those things where customers of all kinds of industries, and even consumers demand certain things and then they pay for them, and they don't even use them, or they don't understand them. But it's our job in each one of our brands to educate the customers on how they can leverage this technology so that they can be more efficient, and so that they have not only the right equipment, but they have a partner who has the wisdom and the ability to be a true partner to help them implement this technology. So absolutely, we like to do that. And we do it through AI and smart conveying, smart controls. We do it with smart granulators. I'm not a product expert, so I can't tell you, for Conair, for Piovan, for Thermal Care, what each one of those technologies is. But we definitely talk to our customers and show our customers, and there were many customers going, for example, through the Conair booth at the show saying, "What is going on with this conveying system," because there was a demonstration of how using learning systems and using AI in adjusting everything in the conveying product can help customers to use that technology. 

PMM: So what you brought up made me think about service after the sale. And I'm wondering if Piovan, or the Piovan Group, has any sort of a corporate philosophy or a corporate policy for all of its different brands on the importance of service after the sale. 

Erkert: So that is a very big initiative of the Piovan Group, to raise the aftermarket business, which is a good margin business for us and it's a good repetitive business for us. So we look at each one of the brands across all the regions and try to share the best practices. What can we do with extended maintenance contracts? What can we do with extended warranties? What can we do with different ways to help our customers maintain their equipment properly and provide 24/7 service, if that brand offers that, and what are the kinds of things that we can do to increase that? And there's so much emphasis on it in our region here in North America that we just promoted a person from who had been vice president of aftermarket for Conair for many years. He is now the vice president of service for the whole North American region so that we can share best practices in the aftermarket and do things in the best possible way for all of our customers. 

PMM: Great. So here's my last question. I always have to hit this one before I'm finished, and that is that processors are really struggling right now with a shortage of skilled operators. So what are Piovan brands doing to help processors in this respect? 

Erkert: Well, I would say that the Piovan branded equipment that's sold through UnaDyn through Canada and through Mexico incorporate the latest designs to be able to fully automate the many processes that our customers have, as is done throughout the world for the Piovan brand. But also all of our brands really want to make the latest equipment offerings have great levels of automation. So if that's Thermal Care, if that's Pelletron, if that's Conair, for one example, and at Conair, they use a resin selection station, and it can be fully manual. It can use lights and proofing to direct an operator to make certain connections and have certain proofing, or it can be fully automatic, and that way it requires zero interaction from the operator. So again, I'm not a technical expert, so I can't go through all of that. But to me as a customer or as a consumer, having an equipment supplier that can give me little automation, medium automation, or full automation, I think is important to be able to offer to the customers. Because then, if they choose that, they need to replace skilled operators that they're having trouble finding, they're going to invest the money for the full automation.  

And then, I think, utilizing the AI technology, using these smart controls, and then using the decades of process intelligence that all of our employees have at our brands that allows you to attach these controls and these sensors to different parts of the equipment to actually be able to do things that operators used to have to do. My dad owned an injection molding plant when I was in high school, and my brother and I worked there, and it was very manual. It's probably like what you might see in some countries today that aren't very automated. But I think if you go into a molding plant in the United States today, you find very automated equipment, because that was 40 or 50 years ago that I'm talking about. 

PMM: Well, thank you very much John for spending some time with us. Some great information. And you know, Piovan is very important in our market, and I think this is good information for plastics processors. 

Erkert: Well, thank you very much for giving me the opportunity to join you today. 

PMM: My guest today has been John Erkert, Piovan's regional CEO for North America. I hope you have enjoyed this episode of PMM in Person. Thanks to associate editor Marvin Brown for editing this podcast. You can always find our podcast and the latest information about the worldwide plastics industry on our website, www.plasticsmachinerymanufacturing.com, and on social media. Remember to subscribe to the podcast on your favorite podcasting app, and please tell a friend or colleague who would enjoy the show about this podcast. It is produced by Plastics Machinery & Manufacturing, an Endeavor Business Media brand.