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December 1, 2007

9 Min Read
First Look: Industry news & analysis

From left: John Sharood, chairman; Carl Johnson, president; and Dick Murphy, vice chairman, represent the new ownership—along with eight other senior managers—of Gloucester Engineering, buying the business from SMS.Visitors at a Hennecke open house; the firm now has new ownership.Engineers from Nu-Vu visit Conair’s facility for training.KM’s Otto Urbanek, CTO, and CEO Dietmar Straub share a thought during a conference at the K Show.Demag’s Klaus Erkes says his company has the strategy and team for continued success.Alexander Müller says Battenfeld is investing for technology and sales.Arburg’s Helmut Heinson, Herbert Kraibühler, and Michael Hehl confer during the firm’s press conference at the K Show.

Gloucester sails to new owner

German metals-processing equipment manufacturer SMS (Düsseldorf) sold off its plastics machinery business, Battenfeld Gloucester Engineering (BGE; Gloucester, MA), to a group of senior managers plus two private investors who counted BGE as a longstanding customer from their previous venture. John Sharood, chairman of what is now called Gloucester Engineering, and Dick Murphy, vice chairman, joined with eight senior managers, including Carl Johnson, president and CEO of BGE, to purchase the maker of blown- and cast-film and converting technology. In the past one-and-a-half years, SMS sold pipe/profile/ sheet extruder manufacturer Battenfeld Extrusionstechnik to Swedish investment business, Triton (Stockholm), and Battenfeld Injection Molding to German investor Adcuram (Munich).

Sharood’s investment vehicle is called Mousam Ventures, and along with Murphy, it undertook a management buyout of EGS Gauging, purchasing the maker of web measurement and controls from Invensys. In September 2006, it sold the business to Thermo Scientific (Waltham, MA). EGS had a longstanding relationship with BGE as a supplier. “I’ve known Gloucester for many years,” Murphy said, “and it just seemed like a good opportunity.”

According to Sharood, other than dropping Battenfeld from the company name, there will be no immediate changes to the firm, with the plan moving forward to pursue the new technology and services path undertaken by Johnson. According to Sharood, BGE has annual sales of about $100 million and 300 employees.

Adcuram acquires Hennecke

Munich, Germany-based financial holding company Adcuram acquired polyurethane processing machinery manufacturer Hennecke (Sankt Augustin) from parent company and PUR supplier Bayer (Leverkusen, both Germany). Financial details were not released.

Bayer announced in February 2007 that it wanted to divest Hennecke, which it acquired in 1975. Hennecke employs approximately 500 people at sites in St. Augustin; Pittsburgh, PA; Singapore; and in Shanghai. Sales last year were about €80 million. Adcuram has made a splash in the past three years in the plastics machinery world. It acquired extrusion blowmolding machinery manufacturer Kautex (Bonn, Germany) in May 2004 from Swiss packaging firm SIG, and sold Kautex to its management last year. In October 2006 it acquired injection molding machinery manufacturer Battenfeld Kunststoffmaschinen (Kottingbrunn, Austria).

In Brief

IGP buys into Atlas

Investment firm Industrial Growth Partners (IGP) acquired a majority stake in Atlas Material Testing Technology, a leader in testing equipment, especially to predict weathering of plastic parts.

New cooperation

Frimo (Viersen, Germany), a manufacturer of punching and trimming tools, has teamed with Jenoptik (Jena, Germany) on the use of laser cutting in plastics processing. The two will integrate Frimo’s machinery with Jenoptik’s laser cutting technology.

Meet LyondellBasell

The merger of polyolefins power Basell and chemical giant Lyondell will be called LyondellBasell Industries. Basell maintains headquarters in Hoofddorp, Netherlands, with Volker Trautz as CEO, while Lyondell is based in Houston, TX, with Dan Smith serving as chairman, president, and CEO.

Cascade’s LEED nod

Cascade Engineering’s (Grand Rapids, MI) headquarters has been certified by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) after the custom molder cut energy use 21%, and eliminated 93% of the building’s waste over the last 12 months. Cascade says the savings paid for the necessary investment in just four months.

Big drives deal

Italian gearbox manufacturer Zambello (Magnago) reports it has just signed a contract to supply about 100 customized drives to Bekum (Berlin, Germany) for extrusion blowmolding equipment. According to Alessandro Feller, Zambello’s export sales manager, Bekum is switching to Zambello for quality and delivery reasons.

Metals’ cost spurs stabilizer switch

With the price of lead up 300% since 2005, the cost of calcium-based PVC heat stabilizers is now a competitive alternative to lead-based ones, says Felix Meyer, CEO of additives producer Baerlocher (Munich, Germany). “In the last 24 months the demand for calcium-based stabilizers for vinyl processing has risen dramatically,” he says.

As a result, his company is investing ?20 million to upgrade and expand capacities for calcium- and zinc-stearate products. At its Bury, England site, it will cease lead-based stabilizer production in favor of calcium-based products by mid-2008. And Baerlocher Malaysia next year will start producing vegetable-based calcium- and zinc-stearate additives.

When calcium-zinc stabilizers were introduced in the 1990s, their prohibitive cost compared to lead kept usage to a minimum. But Meyer says demand now, while still mostly European, is growing in the U.S. profile market and in Latin American, Indian, and Chinese pipe markets.

Conair starts JV in India

Auxiliary machinery manufacturer Conair (Pittsburgh, PA) formed a joint venture company to manufacture and sell most of its machinery to plastics processors in India. The new company, Nu-Vu Conair Pvt. Ltd., is a 50/50 partnership with Nu-Vu Engineers, an established Indian manufacturer of loaders, hot air dryers, granulators, chillers, and mold-temperature controllers. The venture is headquartered in a 43,000-ft² (4000m²) facility in Ahmedabad, India.

Nu-Vu Conair will continue to manufacture and sell existing Nu-Vu equipment, but has also begun making Conair-designed products, including loaders and conveying systems, dryers, feeders, and heat transfer equipment. Granulators and blenders will be offered there in the future.

The Indian joint venture is Conair’s second manufacturing venture initiated in Asia this year, following the new plant in Shanghai that it shares with sister company Rapid Granulator AB. That site manufactures Conair dryers and materials-handling equipment for Conair, as well as Rapid granulators.

KM breaks billion euro mark

Final financial results are not yet in, but Dietmar Straub, CEO of the KraussMaffei Group (Munich, Germany), is not only confident his firm crossed the €1 billion/yr sales mark for FY06/07; he expects the year in progress to be even better. The Group figures include results from KraussMaffei as well as fellow, and competing, injection molding machine maker Netstal (Näfels, Switzerland).

Straub and other KM officials see a huge future for integrated processing technology, and note they are the sole global provider offering extrusion, injection molding, and reaction processing machinery. During the K Show, the firm had a number of cells integrating injection molding with reaction processing of PUR.

Demag CEO sees bright future

Klaus Erkes, CEO at Demag Plastics Group (Schwaig, Germany), said at the K that his firm’s strategy moving forward is to deliver small-to-midsized hydraulic and electric injection molding machinery for a fair price to every region of the world. Erkes said the firm is positioned for the future with a new management team in place and a realignment of its machine lines.

In 2005 the firm offered 20 different machine lines, but now is focused on just three: Systec hydraulics, IntElect all-electrics, and El-Exis hybrid presses. The strategy is already bearing fruit. Since 2005, sales have essentially remained the same, as a result of some discontinued machine lines (vertical machines and the Van Dorn range), but EBITDA has jumped 32%, with Erkes predicting another substantial earnings increase in 2008. “The company in 2005 was not doing well—and now it is,” he said.

Arburg posts record sales again; streamlines hydraulic range

German injection molding machine manufacturer Arburg (Lossburg) says this year’s sales should top the record the firm set in 2006, when sales hit ?306 million. Michael Hehl, managing partner of the family-owned firm, also announced that the firm would now offer one hydraulic machine range, the Allrounder S series, which combines the previous Allrounder U and the current S models, plus the 200-tonne Allrounder 570 S.

According to Herbert Kraibühler, director of technology, offering molders a single hydraulic machine range allows Arburg to give these customers greater modularity in their machines’ construction.

Arburg’s sales in Germany are picking up as midsized German firms are reconsidering work sent overseas, and bringing some of that production back to their domestic market, according to Helmut Heinson, the firm’s managing director for sales. Looking beyond its domestic market, the firm’s exports, which account for about 60% of sales, are spread globally, but the largest market remains the U.S., where the firm recently expanded its technical center. The strength of the European common currency, the euro, is a drag on profit margins, admitted Heinson, with the affects most pronounced in Asia, where Arburg is seeing not only tough competition from Japanese molding machine makers, who benefit from a comparatively weak yen, but also from fellow European machine makers whom he did not identify, but said are selling at unsustainably low prices.

Battenfeld investing in tech and sales; adds Wecker in U.S.

Injection molding machine manufacturer Battenfeld (Kottingbrunn, Austria) is about to expand its technical center at its Meinerzhagen, Germany facility, placing lines there that are able to offer processors the chance to test gas injection, water injection, and foamed parts’ molding, says Alexander Müller, since July the new managing director of the firm. Müller came to Battenfeld when it was acquired last year by Munich, Germany-based Adcuram. The firm also is investing in its sales network, to include hiring Michael Wecker, a longtime employee at Husky, to take over Battenfeld’s U.S. operations in South Elgin, IL.

[ On the record ]

“Any injection molding machine we buy anywhere in the world has to have at least two barrels.” Peter Bemis, president and CEO of Bemis Manufacturing, the Sheboygan Falls, WI-based molder, on his firm’s preference for multishot molding.

“We’re great fans of all-electric machines. They are stable, maintenance free, and big energy savers.” Alfred Au, managing director at molder Inmould Technology Ltd.

“Productivity growth has really taken off in the last years.” Bill Carteaux, president and CEO of the Society of the Plastics Industry, on the increasing use of automation among U.S. processors.

“The main motivation for automating these days is no longer for saving cost on human labor; rather, it is for production quality.” Jean-Michel Renaudeau, director general, Sepro

Robotique.

“If someone is not having success [now], then he is really in trouble.” Werner Wittmann, founder and chairman of the auxiliary equipment manufacturer of the same name, on current market demand.

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