Disposable Static Mixers: A Maturing Industry
The disposable static mixer industry is bringing many changes to adhesives manufacturers, distributors and end users.
To understand the changes the plastic disposable static mixer industry is experiencing today, it is helpful to know where it has been and how it got there. The classical helical static mixer, designed in the twisted helical pattern, has been around for almost 50 years. The original static mixer patent was filed on November 29, 1965, by the Arthur D. Little Co. This design, which had eight “bowties,” was made out of metal stock that was cut and twisted into the common 180° alternating pattern and placed in a metal tube.
Helical static mixers were commonly used in aqueous systems for mixing air into water and in the food industry for mixing disparate foods together. Manufacturing metal helical static mixers was a semi-custom process, with each static mixer being individually made. This method of manufacturing continued for many years with only minor design changes.
With advances in machining techniques, plastic injection tooling could be made to produce small plastic helical static mixers on a large scale. The first plastic disposable static mixers were introduced into the two-part adhesives industry in the early 1970s. This event started the lifecycle of static mixers, which continues to this day.
Since about 1974, the growth rate for helical disposable static mixers in the adhesives industry has followed the classical growth model. While the two-part adhesives industry was slow to accept the new technology, its growth was consistent from 1970 to 1985, and then rapidly increased from 1985 until about 2005.
In 2000, the square mixer was patented and introduced by the Sulzer Chemtech Corp. The introduction of the square mixer was more of a revolutionary than an evolutionary change to mixing two-part adhesives. The Quadro® square mixer began to replace the helical mixer in many instances, and started the mature phase of the helical static mixer.
Industry Growth and Maturity
In the past 15 years, the helical static mixer has continued to mature; sales growth has slowed and helical static mixers are becoming a commodity. As with any commodity, it is difficult to see any appreciable difference between the offerings or performance (in this case, the mixing characteristics) of any of the good producers.
As a product hits the later stages of its growth curve, many key changes are necessary to both the product manufacturers and purchasers of the product. Manufacturers of helical static mixers can expect to see new producers enter the marketplace, downward price pressure, decreased margins and distribution channels getting squeezed.
When a product or market is mature, manufacturers will see slow or no overall growth. In addition, several niche markets will develop and price emphasis will increase, which typically leads to falling industry profitability. Lower prices are typically countered by layoffs and efforts to modify the value offering. One typical growth strategy in a mature market is acquiring a competitor. Existing producers will also increase their competition for market share. Product development becomes largely incremental, and there are few revolutionary inventions. Overall, in a mature market, the product starts to look like a commodity and there is limited potential for product differentiation.
New entrants to a mature market will try to capture market share. However, with entrenched suppliers, it is difficult to overcome the purchasing inertia and lack of a brand name. The exceptions are companies with a strategic innovation; this innovation could be the result of a new manufacturing method, a strategic move to compliment an existing product, or a restructuring of the current value proposition. Increasing value can come by adding more features to the product, which is difficult to accomplish in a plastic disposable static mixer, or through backward or forward integration of the company or supply chain.
Another traditional way for companies to maintain profit margins in maturing industries is through the elimination of “middlemen” (e.g., warehouse/stocking distributors or smaller distributors). Disposable static mixer distributors report getting squeezed from both the mixer manufacturers and customers.
New entrants coming into the static mixer market include manufacturers from China, which unfortunately also are producing and selling patented products in the U.S. Prices from foreign manufacturers might be lower initially, but once shipping and tariffs are taken into account, the cost increases to near or above the current market clearing price. Successful strategies for U.S.-based entrants to the market could include increasing value in the static mixer market by going to market without distributors, focusing on the top-selling static mixers, running lean, and using e-commerce for sales.
The convergence of helical static mixers becoming a commodity and the rapid growth of business-to-business e-commerce has changed the playing field for industrial buyers of static mixers, and has fundamentally changed the marketplace for all commodities. Buyers now have access to information that lets them benchmark attributes, price, and do considerable research in a very short amount of time.
E-commerce also works well for foreign purchasers, who are able to view product offerings quickly at any time. If there is interest in the product from overseas, Google can translate emails into English and a quote can be obtained anywhere in the world, almost instantly.
It is difficult to imagine the size and growth rate of e-commerce. Manufacturing e-commerce sales, which accounts for 90% of all U.S. e-commerce sales, was reported by the U.S. Department of Commerce Economics and Statistics Administration to be $2,283 billion in 2010, up 21% over 2009. The sales numbers for 2014 must be approaching $5 trillion in shipments.
With all these changes occurring in the industry, static mixer suppliers will need to constantly work to keep up with this rapidly changing business environment while providing viable mixing solutions to the industry.