Industry Watch

September 25, 2004

Living and working together in common-law fashion since 1993, Van Dorn Demag and Demag Ergotech will now formally tie the knot under an umbrella holding group called Demag Plastics Group. The two companies announced their engagement in August but used a teleconference on Nov.

Living and working together in common-law fashion since 1993, Van Dorn Demag and Demag Ergotech will now formally tie the knot under an umbrella holding group called Demag Plastics Group. The two companies announced their engagement in August but used a teleconference on Nov. 19 to formally lay groundwork for leadership, organization, and harmonization of product lines.

Both companies will retain the trade names on their products, and for the moment, all their production facilities will continue to function, but now they’ll operate under the joint leadership of Bill Carteaux, Van Dorn’s CEO at the time of the union, and Helmar Franz, Demag Ergotech’s acting chairman of the board. Beneath them will be the triumvirate of Gerd Liebig as chief strategic and marketing officer, Helmut Schreiner as chief technology officer, and a chief operating officer yet to be chosen. Gerhard Becker and Peter Weiss will serve as chief finance officers.

The product lines will be sold by a common sales network, and the companies will bundle their research and development budgets in an effort to reduce time to market. Production will continue for Van Dorn at its Strongsville, OH and Fountain Inn, SC facilities, while Demag moves forward with its two German plants and Asian facilities in China and India. How these plants produce machines, however, will change somewhat.

The newly combined company plans to capitalize on the proximity of its manufacturing centers to major markets, and Carteaux says the ultimate goal is to assemble complete Van Dorn and Demag presses as close as possible to the customer.

“[The Demag Plastics Group] needs to make sure we can serve our local customers to the best of our abilities,” Carteaux explains. “We’re going to make individual components and subassemblies where it makes the most sense, but the final machine assembly will be in the home market.”

Which machines will be available in those markets hasn’t been finalized, but the companies offered their own version of fuzzy math to explain how redundancies in product lines will be resolved, saying that “1+1=.8.” In other words, the Demag Plastics Group will allow the companies to focus primarily on each of their respective strengths, resulting in fewer machines overall, but more concentrated product lines. In this scenario, Van Dorn will focus on its larger two-platen presses, electrics, and vertical machines, while Demag Ergotech will exploit its abilities in higher-speed, multicomponent, and electric drive machines.

The companies say they currently represent the sixth (€244 million for Demag) and the fourteenth largest (€112 million for Van Dorn) machinery manufacturers globally in terms of revenue, but when combined, they will be second. In 2001, the two companies sold approximately 2000 presses, and their stated goal is to reach 3000 combined machines by 2005.

In any merger or acquisition scenario, it is customary to dub one company a winner that will move on, and one company a loser that will fade into oblivion. Carteaux took special pains to refute any suggestion that Van Dorn received the proverbial short end of the stick in this particular business transaction.

“Contrary to popular rumor, [Van Dorn] isn’t absolutely abandoning the market,” he says. “Van Dorn has been there for 56 years, and it will continue to serve the market as the Van Dorn brand and produce machines locally.”

Husky Shanghais China

At the International Plastics Fair in Tokyo, Husky Injection Molding Systems (Bolton, ON) demonstrated a 120-ton Hylectric press running a 32-cavity closure mold in 3.8-second cycles. If run with a robot, as such molds usually are in Japan, the cycle time would have been 5 seconds. Husky’s president Robert Schad was excited about the demo, but he was more excited about what had happened at his last port of call: the groundbreaking for Husky’s new 90,000-sq-ft plant in Shanghai, PRC.
“Our Shanghai Technology Center is being built to support our customers in China and throughout Asia,” Schad says. “We will manufacture our hot runner systems in Shanghai and molding machines under 100 tons.”

“Our customer base in China is varied, including expatriates, multinationals, and domestic injection molders,” says Marcus Sutch, Husky’s president of service and sales in the Asia-Pacific region. Presently working out of Husky’s operations in Hong Kong, Sutch will relocate to Shanghai. “We already have more than 70 customers in China now, including customers for our hot runners,” he said.

“Hot runners are our number one growth prospect within Asia,” adds Michael Urquhart, Husky’s PET Business VP. “Construction on our Shanghai facility will be completed by Q4 2003. We’re working out of a temporary facility now.” Schad adds, “I see Shanghai an incubator. We will use it to learn and move on from there.”

Return to NAFTA-land

On Dec. 4, 2002, Negri Bossi Inc. (NB) cut the ribbon on its new 10,000-sq-ft North American service and support headquarters in Mississauga, ON. It houses a molding systems showroom, a mold trial area, a parts warehouse, and space for stocking up to 20 Negri Bossi toggle-clamp molding machines from 40 to 100 tons. Direct sales and service offices and sales reps also have been established in Newark, DE, Montréal, PQ, and elsewhere.

“We want to become known as a company that offers total injection molding solutions,” says Larry Pascucci, who heads the operations.

At the opening day ceremonies, NB demonstrated how it has begun to build on its own leading-edge press technologies by partnering with a number of technology leaders in their own right. It has an agreement with Spirex to provide the Twinshot single-screw coinjection system on its machines, as well as Spirex’s own screw design expertise. In addition, NB licenses a patented process from Meehanite Metal Corp. called Meehanite for casting its platens, which reportedly helps reduce deflection.

NB also offers permanent magnet QMC systems from Tecnomagnete as an option, and has partnered with a customer, Rutgers University School of Engineering, to help it develop commercial applications for superstructural materials blended from recyclate via its immiscible polymer processing technologies.

Machinery continues onward, upward

Posting its highest numbers since Q4 2000, sales of injection molding machines continue to show a slow but steady rise out of the depths reached in 2001. According to the Society of the Plastics Industry’s Committee on Equipment Statistics, 967 machines were delivered in Q3 2002, up from 853 in the second quarter of the year, and the most since more than 1500 were sold in the fourth quarter of 2000. It also marks a 38.5 percent increase from Q3 2001, with 3399 units and $650 million worth of machines being sold for the rolling year going back to Q4 2001.