Tag: machinery

  • Tools for tomorrow

    Tools for tomorrow

    Machinery suppliers are developing new technologies to manufacture next-generation products.

    By George Gay

    Success usually comes with some excess baggage. Take heat-not-burn (HNB) devices; they are meeting with success on a number of markets and with what can be described only as phenomenal success in Japan. In fact, I wouldn’t dare say what share of the combustible cigarette (hereafter, cigarette) market the consumable elements of these devices (hereafter, HNB sticks and capsules) have taken in Japan because my figure would certainly be out of date by the time this story is published—possibly by the time it is finished. Suffice to say that in presenting its results to the end of September, Japan Tobacco (JT), which has a stable 61 percent share of the local market, had revised its estimate for full-year 2017 cigarette volume to 92 billion. That’s 13.4 percent down on its 2016 volume.

    Of course, it was to be expected that cigarette volumes would have been cannibalized by the new products because, in the main, manufacturers of HNB sticks insist they are aimed only at smokers. Clearly, however, the extent of this switch from traditional to new products came as something of a surprise or shock because it has brought with it capacity headaches.

    I take it that when HNB sticks were first being developed, they were made on minimally modified existing machinery within factories built to produce cigarettes. After all, the structure of some of them is not far removed from that of cigarettes, and they would have had to have gone through a number of iterations before commercial versions were developed. But the demands of efficiency and the need to eliminate cross-contamination clearly mean that, as volumes increase, manufacturers are and will be switching to higher-capacity machines running within dedicated factories.

    For instance, Philip Morris International (PMI) said in July that it was planning to invest about €490 million ($570 million) in transforming its cigarette production factory near Bucharest, Romania, into a high-technology facility for manufacturing Heets, the HNB sticks used with the electronic tobacco heating device iQOS. The conversion of the factory into a Heets production facility had already started and was expected to be fully operational by 2020, the company said.

    Romania will join a growing list of countries where PMI manufactures HNB sticks for iQOS. Also in July, the company announced plans to install two new high-tech production lines in Neuchatel, Switzerland, to produce Heets. In June, it announced it would expand capacity at its HNB sticks manufacturing facility in Bologna, Italy, and that it would build a new facility for manufacturing Heets in Dresden, Germany. In addition, PMI is thought to be in the process of converting its cigarette factories in Greece and Russia.

    Meanwhile, JT is on record as saying that next year its capsule capacity will more than quadruple as high-capacity production is introduced. With the installation of high-capacity machines, JT believes that output will be expanded quickly from the start of 2019, by which time it expects to be marketing its Ploom Tech device nationally.

    Of course, there is more to the market for HNB devices and sticks than iQOS and Ploom Tech. British American Tobacco has its Glo device, while R.J. Reynolds Tobacco, now part of the BAT stable, has the Eclipse, for which it has lodged with the U.S. Food and Drug Administration a substantial equivalence application for an improved version. In fact, there are a number of other devices out there—and any number of others in development. Indeed, iQOS is one of what PMI refers to as its four scientifically substantiated smoke-free product platforms under development.

    New machinery

    Interestingly, what most of these devices have in common is that they are different from each other—either subtly different or substantially different. Compare that with the industry most of us have been involved in up to now, where cigarettes are all more or less the same. And this means, I assume, that unless one HNB product type comes to dominate the market—and that cannot be ruled out—up to a point the future must look bright for traditional tobacco machinery suppliers, especially in respect of those products whose structure most closely resembles that of cigarettes. And even though the importance of the relationships built up over decades between tobacco product manufacturers and machinery suppliers cannot be overstated, some space must have started to appear for other companies, including those specializing in bespoke machinery, especially given that some of the new products being developed will come from companies other than the major tobacco manufacturers.

    Certainly, traditional tobacco-machinery suppliers must be feeling better than they were when it looked like e-cigarettes were going to win the day—something that, of course, still might happen, or at the very least might happen in some markets. E-cigarettes, despite their name, mark a cleaner break with cigarettes than do HNB devices, and this clean break certainly snaps off at the level of machinery.

    Of course, when PMI became serious about iQOS, it set up facilities in Bologna, Italy; so it has to be assumed that G.D has played and is playing a major part in the development of high-capacity HNB sticks machinery. But I believe that at least one other major supplier of traditional-cigarette machinery is developing such machinery. And given the fragmentation of the market that might occur, others might be following along at a distance governed by the perceived level of risk that this new generation of products might still go belly-up.

    In fact, one other machinery maker is in front of the game. Aiger Engineering offers a complete make-pack production line for the consumable elements of HNB products. Aiger’s business development director, Arek Druzdzel, told Tobacco Reporter in October that his company offers a flexible system that allows it to meet the requirements of at least two types of HNB specifications: those for use with iQOS-like sticks and those for use with Eclipse-like systems.

    The existence of such machinery might seem surprising because it is easy to get into the way of thinking that assumes that manufacturing sticks is all very new. But when asked what the future holds for tobacco machinery suppliers given that the industry seems to be moving at some speed toward electronic nicotine-delivery/vapor products, Druzdzel issued a reminder that it was about 10 years ago that multinational tobacco manufacturers realized that the cigarette, which had been around for more than a century, was coming to the end of its natural life. And they knew that this meant their future products would have to be very different from those cigarettes.

    Since then, the pace of development of next-generation products (NGPs) had been accelerating every year, he said. E-cigarettes came along, which were devices that didn’t necessarily need tobacco, while novel HNB products needed far less tobacco than was used in a cigarette: tobacco whose desired volatile compounds were released when heated—not burned—to a temperature in the 100–300 degree C range.

    When considering sticks manufacture, it is easy also to concentrate on the secondary department, as often happens in the case of cigarettes, but all areas of processing and production are affected—though, again, the changes required for different products vary considerably. HNBs and tobacco-free nicotine-delivery products, Druzdzel said, required alternatively processed tobaccos and practically no standard cut rag. This implied the end of standard, traditional primaries: large tobacco-processing plants, producing tons of cut rag per hour. Some of the next-generation tobacco products required new primary processes handling sheet tobaccos, special casings and heat/pressure-treated tobaccos. Others required micronization/granulation processes that produced tobacco pellets of controlled porosity and/or permeability, nicotine extraction and powder/liquid fine-dosing.

    In the future, Druzdzel said, tobacco-containing components would be delivered through modular plants, complying with pharmaceutical-like containment standards and performing production processes already known in the pharmaceutical and food industries. And new types of machinery, such as that for the pre-forming and extrusion of tobacco, charcoal, and bioactive (herbal) sheets and pellets would be needed, along with more sophisticated controls.

    Substantial modifications

    The cigarette make-pack departments of today would see a similar evolution, said Druzdzel, driven in part by the changes that would occur in respect of manufacturing materials. For instance, noncombustibles and nicotine vaporizers would require changes to the traditional function and specification of a filter. Standard monoacetate filters would be gradually replaced by specialty combined filters, selective filtration membranes and/or filtration tablets similar in length to the shortest segments used in combined filters nowadays. Leading products would call for more biodegradable and sustainable components, and hence demand alternative, eco-friendly materials and adapted production methods.

    Certainly, this novel product-driven change would require the abandonment or substantial redesign of the manufacturing machinery currently used and, in the long run, demand a new generation of production machinery.

    Also, packing machinery would be subject to substantial modifications. In the next few years, said Druzdzel, packing speed would be less important than would be the flexibility to pack new shapes into increasingly complex pack specifications. Packing flexibility, quick format change and, certainly, packing quality would remain decisive factors differentiating packing machinery suppliers.

    Lastly, in respect of packing-related machinery, the industry would have to ditch well-known rod-handling and logistics setups. The NGPs were, in fact, a variety of different products, requiring more complex and careful handling than the industry had been used to. The new products would drive design changes and customization of the new-products’ handling machinery. And, as usual during a transition period, only the most advanced and dedicated suppliers would, using their acquired knowledge and established machinery, take up the challenge of supporting the industry.

    Over the next few years, in the transition period, modified filter makers and cigarette makers would be used for HNB production, giving machinery suppliers sufficient time to come up with new, faster and more flexible designs, complying with NGP specifications. In time, Druzdzel said, a new generation of make-pack machinery would be supplied, customized for particular products once they were defined by their manufacturers. More assembly robotics, more direct communication between collaborating machines and production modules, and more parameters controlled and processed on-line (in real time) would shape the production plant manufacturing standard products of the future.

  • Rolling with the punches

    Rolling with the punches

    Developing customized, flexible and efficient solutions, machinery makers are meeting the challenges of an industry in transition.

    By Stefanie Rossel

    The pace of change in the tobacco industry has accelerated significantly in recent years. The decrease of global cigarette sales volumes continued in 2016, amounting to an estimated 3 percent; in China, sales volume reportedly even shrank by 8 percent. New regulations, such as the revised EU Tobacco Products Directive, which was implemented in May 2016, are forcing tobacco companies to focus on compliance.

    This year started with British American Tobacco’s takeover of Reynolds American Inc., another mega-merger that is likely to lead to further rationalization of production sites and perhaps further concentration among the tobacco giants. As demand for combustible cigarettes declines worldwide, cigarette alternatives continue to show impressive growth rates.

    Ian TIndall

    In response, cigarette manufacturers have started repurposing their factories. In March, Philip Morris International (PMI) announced a €300 million investment ($319.59 million) to convert its Papastratos factory in Greece from a cigarette-making facility into an iQOS “tobacco sticks” plant.

    Unsurprisingly, investments in traditional tobacco making and packing equipment have been lower in the past few years. “We are all certainly operating in a very challenging environment,” says Ian Tindall, innovation and marketing director at Molins. He remains optimistic, however. “Despite the consolidation of the industry that we all hear about, there are still many independent players who continue to invest, albeit in a more modest scale than some of the big multinationals. They see the value of working with established and reputable suppliers, and so there is some space to operate.”

    And even beyond smaller tobacco companies, the machinery sector still offers considerable opportunity; it just takes the right strategy to seize them.

    Molins, for example, identified the need for a full end-to-end offering for the mid-speed market where reliability, robustness and quick brand changes are key. “We have introduced the Alto and Octave making machines to compliment the Forte filter maker, and then introduced the Optima hinge-lid packing machine to give true make-pack capability from a single supplier,” says Tindall.

    New business models

    At the same time, Molins reorganized its business into a “one-stop shop.” “We have amalgamated Langen Group, Molins Tobacco Machinery, Molins Technologies and Cerulean into a single company: Molins,” says Tindall. “This has immediately added to our offering comprehensive testing capabilities that can be delivered to our customers through the Cerulean brand. We can now deliver a total make-pack-test line and even a whole laboratory for regulatory testing if needed. This merging of companies has also given the customer access to a greater number of field engineers and, when considering special projects, a larger number of scientists and development engineers. We believe by offering more support to our customers we can allow them to concentrate on what they do best, and this brings success for both us and them.”

    TMQS of Germany has also gone through a transformation. Starting out as a supplier of spare parts in 2001, the company today describes itself as a solutions provider.

    “While we are not focusing on providing new machinery as our main field of business, the important point for us is to deliver whatever is required in terms of improvements, leading to a better machinery usage, improved embedding of machinery into their new surroundings, modernized and enhanced data collection, and usage of systems and anything else providing benefit for a factory in its specific situation,” says TMQS sales manager Norbert Schulz-Nemak.

    “All this needs to happen with a very high value-for-money ratio, and it must be done with an open-minded approach. Barely any project is like the other, which is due to the specifics of every machine and the required outcome.”

    While acknowledging the challenging business environment, Schulz-Nemak believes it also provides opportunities. For example, equipment suppliers can participate in the consolidation process by developing solutions for new production processes or simply by helping factories save money.

    “This can range from small solutions like an improved version of a ledger drive for cigarette and filter making via very tailored processes of sub-assembly repair or maintenance with optimal content for the exact requirements or an active diameter control for cigarette and filter makers up to high-tech solutions for very specific products in diverse markets,” he says.

    Opportunities prevail

    The equipment market is saturated due to the consolidation among the cigarette companies and the subsequent shifting of manufacturing capacities into fewer factories producing larger volumes. However, such developments may also mean good business for machinery suppliers. “These additional manufacturing capacities usually go along with the need for a bigger variety in brands for the receiving factories as long as local brands are shifted to different factories. This could also mean that new machinery is required as space is limited but capacities are to be increased. And even if no new machinery is required, specific standardizations or modernizations may need to be projected in order to bring all machinery to the factory standard,” says Schulz-Nemak.

    Even as cigarette volumes continue to decline, the variety of brands is increasing as consumers demand more individualized products. For cigarette manufacturers, this means shorter production runs and more frequent brand changes. “As multinationals continue to develop new variations of existing brands and try to develop new brands, we are also seeing a resurgence in format change parts for the MK9 Classic and orders for new machines,” confirms Tindall. “This mid-speed machine is known as the ‘workhorse of the industry,’ and over the years has shown to be perfect for any cigarette variant.”

    He says that these changing consumer requirements might spawn a new type of “boutique” cigarette producer targeting very specific markets. “To us, this niche is one we have targeted and fulfill well.”

    Joining forces

    Tobacco machinery suppliers have also embraced digitization, automation and interconnectivity. Molins’ latest equipment is capable of communicating with other parts of the production line, including makers, packers and testing equipment. It is ready to take advantage of developments such as data mining and metrics.

    According to Schulz-Nemak, most of TMQS’ solutions are able to share data with the next-level management information system (MIS). “This enables our customers to embed these units into their own MIS and its data to be used for process evaluations or as one basis for higher-level systems.”

    These days, tobacco machinery suppliers often cooperate with IT companies.

    Working with a partner, Molins can deliver plant-wide quality-assurance data systems, such as Nexus, which has been deployed successfully. “This adds value to the manufacturing chain by ensuring that products are being made to the appropriate quality specifications and that the product is adequately verified,” explains Tindall.

    TMQS works with Shenzhen Hualong Xunda Information Technology Co. “They develop complete solutions for whole factories that enable a full reporting and a management of the manufacturing processes on the click of a button,” says Schulz-Nemak. “Everything can be connected—from sensors within the machines providing status messages about the condition of functional groups via information on parts usage on each machine to develop a preventive warning system about potential upcoming breaks based on real usage data via material usage, real-time visualization of all machines in a virtual factory to a full management information system informing about all key parameters of the manufacturing process, ranging from primary to secondary operations and further,” he says.

    Staying flexible

    In times of industry transition, flexibility is key. “Our firm belief is that, by changing with the industry we can be better placed to meet the demands of consumers and regulators,” says Tindall. “This requires Molins to be an agile partner in changing to meet market demands, and this is reflected in the products we have been bringing to market.”

    Schulz-Nemak notes that a concentration of production capacities is usually accompanied by the target of cost reduction, while the quality of the manufactured goods is expected to remain at least at the same level. “TMQS is set up to deliver exactly this, he says. The company, he says, offers direct cost savings, cost savings through standardization and cost savings through technical solutions that, among other benefits, reduce downtime.

    This approach, says Schulz-Nemak, allows TMQS to look toward the future with confidence. “The requirements will keep changing,” he predicts. “We are ready for this ongoing challenge.”

     

     

  • ITM buys IMAtec

    The ITM Group has acquired IMAtec of Luxembourg, a supplier of packing equipment for other tobacco products  (OTP). IMATec’s portfolio includes cigarette paper booklet machines, pouchmakers, clear-wrap kits, shrink kits and end-of-line packaging equipment.

    Combining the companies’ teams will allow ITM to offer complete packing solutions from concept to machine acceptance. In addition, it will be able to produce prototypes or mockups and carry out trials at its pilot innovation center. The company will also be offering efficiency improvement services.

    The ITM Group manufactures machinery for the entire processing cycle of cigars, cigarettes and OTP. This covers all stages of production in the primary and secondary departments, including logistics and packing, plus after-sales services.

  • Molins celebrates 100 years of service

    The Molins Machine Co. was founded on Oct. 18, 1912—exactly one hundred years ago.  The Mark 1 cigarette making machine introduced in 1928 was the first of its kind and led to a long line of machinery that became the latest standard for quality. During these years the company revolutionized the tobacco industry with innovative engineering that shaped cigarette and packaging production across the world.

    Today Molins remains a prominent company in the industry with one of the largest installed bases of machinery in the world. A dedicated service to customers for spares and maintenance has fostered relationships that have endured for very many years.

    “With new machinery like the Octave and Alto plus other upgrades and machinery in the pipeline, new and old customer relationships getting stronger and the same dedication to quality and customer satisfaction, it’s clear that Molins will be around for a long time yet… perhaps even, for another hundred years,” the company wrote in a press statement.

  • Growth through innovation

    Growth through innovation

    Andrew Hopkins, BAT’s head of manufacturing, talks about the challenge of building a globally integrated supply chain and the importance of flexibility in an increasingly competitive market.

    By George Gay

    Andrew Hopkins

    Facing fiercer competition and stricter regulations, cigarette makers are increasingly demanding of their equipment suppliers. Tobacco machinery must be fast, efficient and versatile—and of course reasonably priced. During the TABEXPO Prague Congress, Andrew Hopkins, British American Tobacco’s head of manufacturing, will discuss the criteria that matter to him and his colleagues when it comes to tobacco manufacturing lines. European Editor George Gay spoke with Hopkins in London, and he offered a preview of the issues likely to be raised during the machinery sessions at the Prague Congress.

     

    Speaking with Andrew Hopkins in December was something of a revelation. I had gone to Globe House, British American Tobacco’s (BAT) London head office on the afternoon of Dec. 23 having spent the morning reading the Internet’s latest batch of anti-tobacco news, ingesting on the train a dire lunch washed down with the even worse economic predictions of my newspaper, and then enduring a brisk walk along the Thames Embankment in typical English weather. I guess I was prepared for something of a gloomy interview, but Hopkins was keen to talk to me about innovation and opportunities.

    He reminded me of how BAT had announced to the City some time ago that it would make savings of £800 million ($1.28 billion) during the following five years, and he explained that these savings were being made largely by constructing an increasingly consumer-driven, globally integrated supply chain. “By doing this, we think we will be better configured to deliver innovation quickly to market; so building a truly integrated global supply chain is more about growth than productivity,” he said. “And we are very excited about that. We think that is a big opportunity for the group.”

    One of Hopkins’ remits in his capacity as head of manufacturing for the group, which takes in people, processes and technology, is to integrate, at a global level, manufacturing with the other supply chain functions, and with the commercial side of the business. Although a lot of work has been done already in optimizing local and regional operations, it is clearly a daunting task integrating manufacturing operations that produce, as well as other tobacco products, about 650 billion cigarettes a year in 45 cigarette factories around the world.

    In part, Hopkins gets to grips with these problems of scale by imagining the factories as a single, “virtual” factory operating on many sites, and by dint of BAT’s centralized system of acquisition of equipment and services, which, he says, has “enormous” advantages. Group procurement of machinery via the central manufacturing team allows the leveraging of scale, the driving of standardization, the mobilizing of best practices and the development of strategies with OEM suppliers.

    At the moment, BAT is looking at a number of projects linked to the global provision of service and spares support, and Hopkins told me he was interested in examining the possibility of developing a business model under which OEMs would do the maintenance on specific, mainly newer-generation equipment owned by BAT. But he added the proviso that such arrangements would be contingent on their delivering to BAT some value, which wouldn’t necessarily be directly financial.

    At this point, I couldn’t help asking whether such a development could lead to BAT becoming a brand owner for which its current OEMs made cigarettes. But Hopkins gave this idea short shrift, pointing out that BAT’s manufacturing capability provided the potential for its gaining a competitive advantage. “We think that the OEMs are very good at making equipment and that we’re very good at manufacturing cigarettes; it’s as simple as that,” he said.

    But in one way, simple it’s not, because BAT has a big portfolio of brands and products. Their growth strategy is based on four global drive brands (Kent, Dunhill, Lucky Strike and Pall Mall), which will drive more focus long term; however, since the company believes in “driving growth through innovation” additional complexity is expected to be created. Indeed, it is intent on driving innovation faster and further in the future.

    BAT, Hopkins said, had more brands and more SKUs than did its competitors, and this meant more manufacturing complexity, an average batch size that was estimated to be smaller than those of its competitors, and, therefore, the need for more machine changeovers.

    Given this manufacturing environment, BAT tends to look more to medium-speed makers and packers than to the very highest speed equipment. The group’s business was complex, Hopkins said, and it found that flexibility and responsiveness in the supply chain—because manufacturing was part of the supply chain—were more important than all-out, ultra high speed.

    Speed, as far as Hopkins is concerned, is more crucial in respect of speed to market. He is passionate about innovation, though adamant that innovations have to be right; they have to be delivered to the market on time, on specification and at a cost commensurate with the risk involved. And the products of that innovation have to be produced in such a way that they can be reproduced in other locations should that become necessary.

    An honors graduate in mechanical engineering, Hopkins started work with BAT’s corporate engineering department in Southampton in 1991, where one of his first projects saw him involved in testing high-speed cigarette makers. Since then, and prior to taking up his current job, his career has seen him appointed to increasingly senior positions in Hungary, Uzbekistan, Belgium, Zimbabwe, the U.K. (again) and Russia.

    I was keen to find out what had been the highlight of his career to date, but he was not to be drawn, preferring to speak of all of his appointments as hugely rewarding in respect of their business challenges and life-changing in respect of the cultural journeys they provided. The highlights just keep coming, he told me.

    But Russia must come close. When Hopkins arrived in the country, BAT had a 90-billion-cigarette capacity, which, under his leadership, was expanded to 120 billion in three factories. Hopkins and his team created an eastern Europe supply chain and integrated the Uzbek and Ukrainian factories into an eastern Europe cluster.

    “We drove the business growth through innovation in Russia harder than anywhere else in BAT,” he said. “ What it [the Russian market] taught me was that if we are going to innovate, we have to be first into the market and we have to be quick; so we need technology platforms that are going to work and that are flexible—that can handle a wide range of applications,” said Hopkins.

    Flexibility is a word commonly used by all of the major cigarette producers, but it is particularly true at BAT with its emphasis on limited-edition packs and new formats. So, I asked where we were on the journey toward true equipment flexibility.

    Generally, what had improved was the ability to change a pack, said Hopkins. With a king-size pack, it was a lot easier than previously to go from a square edge to a beveled edge or a round corner, to the point where this was regarded as a basic capability.

    But Hopkins said he was looking for more flexibility. “That’s a challenge for us and we’re talking to a number of OEMs about it,” he said. “And they’ve got some concepts and thoughts about how we could gain more flexibility without losing massive amounts of productivity. So that’s something we’re interested in.”

    With talk of the future, I took the opportunity to ask Hopkins what a state-of-the-art cigarette factory might look like 10 years from now.

    “I think in general there’ll be more automation,” he said. “I think there’ll be a lot more on-line, real-time quality checking, and more real-time, on-time information for operators at machine level—with more empowerment. For example, they might have direct connection to the consumer complaints database so that they can see what quality aspects they need to be looking for when they’re producing a batch.

    “I think we’ll pay even more attention to product integrity and repeatable quality; and there’ll be more of a move to a zero-defects environment.

    “And shop floor systems will have to be far better adapted to providing a lot more variety as more and more restrictions on advertising take place. We’ve got to adapt the business. Consumers like personalization; they like variation; they like new things. You see that in other products; so why not in cigarettes?

    “As I’ve said: innovation is what drives growth for BAT.”

     

     

    Andrew Hopkins will be speaking at TABEXPO about flexibility and other manufacturing-related topics. To sign up for the Congress, please visit www.tabexpo.org.