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March 1, 2002

11 Min Read
IMM's Plant Tour: Molding in Hungary, thinking internationally

Injection molder Moldin Plastics Ltd. and its parent organization, the Pannonplast Group, offer solid proof that the spirit of entrepreneurial capitalism was only sleeping during the years of socialist/communist society in the central and eastern European countries. It is wide awake now and moving in some surprising directions. In a remarkable example of the shape this awakening has taken, Moldin's Budapest plant paints a sharp contrast between the outside and inside of the facility.

The factory is in what appears to be a residential area of Budapest. The many small shops on the streets with upper-floor apartments are a typical part of this sprawling, multifaceted city. Passing through a gate between two buildings, you find yourself in a yard surrounded by the kind of imposing dark brick buildings generally referred to as old-style industrial. Entering Moldin's back door leads straight onto one of its molding floors, but it's more like passing through a time warp into another world. 


Moldin Ltd.'s production technology and workspace is all current generation, but it is a complete renovation inside a very old building in Budapest.

Every aspect of this molding shop says "modern." A collection of current-generation Krauss-Maffei machines is equipped with current-generation Wittmann automation technology. Tubes from a Piovan central material handling system run along the walls, as do utilities conduits. Everything looks shiny and new, including the building structure. Remembering the film The Matrix, I looked out the window to be sure the industrial yard I'd just left was still there. (Thankfully, it was.) 

Strategic Alignment 
Miklós Rimár, managing director of the plant, says Moldin's goal is the same as those of the Pannonplast Group: to be a substantial plastics-based production and assembly player in the central and eastern European manufacturing sector. Strategically, that means aligning with the large multinational companies that have moved into the area, and being quick to provide the quality, support, and service they expect. 



Robotics are standard in this plant. Krauss-Maffei cooperates with Wittmann to develop the automated production centers.

Multicavity molds are the norm, particularly for parts like these printer housing components for major customer Hewlett-Packard.

In a move to implement that strategy for Philips, Pannonplast set up the first Moldin factory in 1998 to supply components like housings, bases, and bezels for CRT and LCD monitors to the Netherlands-based electronics giant. Philips had established a manufacturing plant at Szombathely in western Hungary, so Pannonplast quickly began construction on a 3600-sq-m (39,000-sq-ft) facility in May 1998 using 6000 sq m (64,500 sq ft) of land acquired from Pannunion Ltd., another Pannonplast-affiliated company, near Philips. Volume deliveries to Philips began on Oct. 15 that same year. The Philips assembly complex has since grown to be one of the largest facilities of its type in all of Europe and Moldin has expanded similarly to accommodate the growth. 

The plant IMM visited in Budapest was opened in a totally different manner. It was converted beginning in 1999 from a previous Pannonplast production facility for battery cases. Moldin immediately began to update every aspect of the facility. Production technology and equipment, plant design, and particularly the building's interior were completely changed. Rimár notes that modernizing an older plant is quite challenging, but Moldin was again aligning itself with another major multinational company, and again it had to move fast. 


Ranging from 25 to 575 metric tons, Moldin's machines are positioned to leave space for a variety of secondary operations.


Pad printing can be centralized, as shown, or located at the machine, as can welding, hot stamping, and assembly.

During 1999 and 2000, Moldin Budapest became a working partner with Hewlett-Packard after HP decided to move European printer production operations from Spain to Hungary. It established a plant in Budapest not far from Moldin's factory, and another facility about 65 km (40 miles) outside the city. With HP waiting for delivery, Moldin opened one production area while renovation was still taking place. The second hall began production shortly thereafter. Now specialized by location, Moldin's Budapest plant is almost completely dedicated to printer components and assemblies, while the Szombathely plant concentrates on monitors and TVs. 

Moldin Ltd., Budapest, Hungary 

Square footage: 25,000, production (2358 sq m)
Annual sales: $28 million (both Moldin plants)
Markets served: Teletronics, appliances, office equipment
Customers: Philips, Hewlett-Packard
Parts produced: 4.3 million/year (molding and assemblies), or 350,000 monitor and printer sets/month
Materials processed: ABS, HIPS, PC/ABS, PC, POM, PPA, PBT
Resin consumption: >7500 tons/year
No. of employees: 130
Shifts worked: Three shifts, six days/week
Molding machines: 26, 22 Krauss-Maffei, four Engel, 25 to 575 metric tons
Molding technology: Gas assist, insert, multimaterial, machine networking, remote access
Secondary operations: Welding, painting, pad printing, hot stamping
Internal moldmaking: No
Quality: ISO 9002, QS 14001 

A Successful Marriage: Technology and People
The production space in the Budapest plant now has 22 Krauss-Maffei C Series and four Engel injection machines. The K-Ms are coupled with Wittmann automated removal and handling systems. Moldin's clamp force range extends from 25 to 575 metric tons and the available technologies include gas-assist, insert, and multicomponent molding. In response to customer preferences for semifinished modules, Moldin has expanded its assembly capability and offers a variety of welding, decorating, and finishing technologies beside the press or offline. 

Rimár says automation has had a significant positive impact on the plant's productivity, as have effective management systems. All the machine controls are networked and are accessible remotely using the Internet. Rimár uses this feature himself, and likes being able to check scrap rates on running machines from home, and make adjustments if needed. This allows nearly lights-out operation with the technician reachable by mobile phone. The automated machines, which are virtually production cells, are a collaborative
effort between Krauss-Maffei and Wittmann with the former holding single-source responsibility. 

Of course, automation also provides consistency and reportability. The Wittmann robots on the machines here use CANbus technology for rapid signal passing and easy integration into the machine controls. Payback time for the robotics, says Rimár, is easily less than 18 months, and the performance benefits begin on day one. 

Here he stops and pointedly says that, by far, the employees are the best technology offered to clients by Moldin and Pannonplast. A commitment to technical excellence among its workers is written into Pannonplast's mission statement. Technical positions have strict educational standards on entry, and continuing education is used to keep skills up to date. Fortunately, as Rimár notes, Hungary has a large base of well-trained technicians and engineers. 

Exploiting Group Resources 
Moldin Ltd. has a wide range of support available for customers, as well as for itself, but whether or not this support is in-house depends on how you define the term. The Pannonplast Group has 18 separate companies, each involved in some aspect of plastics production. Its main product categories are plastic pipes and tubing, a broad assortment of injection and blowmolded packaging, and plastics-based industrial components and assemblies—Moldin's area. Two of the 18 companies do not process plastics; they support the other 16, plus a number of Pannonplast joint ventures. 

Therefore, although Moldin does not have moldmaking in-house, another member of the Pannonplast Group called Dexter Ltd. has two well-equipped shops for making injection and blow molds, one of which is in Budapest. Between the two plants, Dexter employs more than 130 people to operate a long list of wire and sink erosion machinery, high-speed machining centers, and a regularly upgraded CAD/CAM group that brings extensive design support to Moldin's clients. Thanks to the availability of a good-sized, well-educated technical workforce in Hungary, Moldin offers clients engineering services from concept and design to assembly and testing. Moldin can call on technical support for its own use that is also not quite in-house. 

Pannonplast established a separate research and development company—which happens to be next door to the Moldin Budapest factory—to handle projects for clients and to support development within other Pannonplast companies. Rimár says the thinking is that operating companies cannot take production specialists offline to develop and set up new technology without disturbing production. Therefore, they supply what amounts to an in-house consultant. 

For example, when Philips won an order to supply black-colored monitors to Dell, a new paint line was needed at the Szombathely plant. The R&D company handled the design of the paint line, screened suppliers, trained operators on the technology, supervised the installation, and, in general, put Moldin in the position of client. "We were offered choices at every phase," says Rimár, "and the communication was excellent. So are the results." For efficiency, the paint line is fully automated, which ensures a consistently high level of throughput without quality problems. Instead of six painting operators, two per shift, robots do the work in a closed atmosphere that eliminates both safety and ecological issues. 


The history of Pannonplast, the parent group of Moldin Ltd., began in 1922 in a suburb of Budapest with the company making thermoset buttons and various rubber products. Active in 18 countries by 1932, Pannonplast was nationalized after World War II. It began to mold plastics, specifically PVC, in the 1950s and established several new factories in the 1960s. In 1984 came the first of what would be many joint ventures. Polifoam Ltd., formed with Furukawa Electric and others, was the first-ever Japanese-Hungarian joint venture. Pannonpipe Ltd., created with Solvay (Belgium) and Wienerberger (Austria) in 1990, took over all production of water and sewage pipes.

Pannonplast became a limited share company in 1991, with 51 percent going to foreign institutional investors and 15 percent to company employees. Current financial statements show continuing employee ownership. By the end of 1994, Pannonplast had become a group of 18 companies supplying plastics products including pipes, blown containers, molded packaging, film, banking cards, and technical injection molded parts and assemblies. A recently established subsidiary of Moldin Ltd. combines 13 metal stamping presses with injection molding to provide assembled VCR and DVD player chassis to Philips. 

Sales in 2000 topped $100 million and quarterly reports show that sales for the first six months of 2001 were 34 percent more than the first half of the previous year. Its stated objective is to be a major player in central and eastern European markets, and the company is particularly active in eastern markets such as Romania, the Ukraine, and others. 

Building Strength 
Moldin's key to success cannot be whittled down to just one element, but instead includes many strategies. Since there is very little, if any, profit to be made in low-level commodity part stamping in Hungary, says Rimár, the company focuses on high-tech work that comes almost exclusively from large customers looking for problem solvers to work with them. Another strength he mentions is management flexibility at both Moldin and Pannonplast. They have the resources to move quickly on behalf of a customer and have proven it. Innovation is prized and the doors are always open to new ideas. 

The company culture is built on a sharing of knowledge and experience. People from Budapest are often found in the Szombathely plant for days at a time, and vice versa, despite the 230-km (143-mile) distance. The oft-mentioned low cost of labor relative to countries west of Hungary is not a great advantage, says Rimár, except in the assembly area. The technical work Moldin wants demands both automation and JIT delivery. Thus, Moldin has a wide range of machine sizes and the ability to move a mold from one machine to another, or even to another plant if necessary. 

These combined strategies work, Rimár asserts. Philips brought back to Hungary some production it had consigned to Asia for reasons of quality, and quality is what Moldin is offering, says Rimár. The molder obtained its ISO 9002 and QS 14001 certifications as soon as physically possible. Automation supplier Wittmann says that quality and consistency are at the base of all Moldin's specifications for robotics system. As Rimár puts it, Hungary is clearly better than Asia as a starting point for European distribution. Adding in quality, JIT, full support, and cost control yields the equation for bringing more business to Hungary in general, and to Moldin in particular. 

Contact information
Moldin Plastics Ltd.
Budapest, Hungary
Miklós Rimár
+36 (1) 382 7200
[email protected]

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