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August 20, 2002

6 Min Read
Industry Watch

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Nypro Inc (Clinton, MA) continues to see steady sales growth arising from its strategy of colocating with customers globally, targeting smaller parts and assemblies, and providing value-added services. The company recently acquired two plants from Advanced Dial Co., one in Mexico and one in Chicago, to bring its global total to 29 plants in 12 countries. Sales for the fiscal year ending in J8une were approximately $725 million.

Nypro boosts production south of the border
With the acquisition of a plant in Chihuahua, Mexico, Nypro Inc. believes it now holds the title of largest custom injection molder in Mexico. The new Chihuahua plant and its 250 employees and 40 presses were acquired from Advance Dial Co. and join operations in Monterrey, Guadalajara, and Tijuana. In all, Nypro now operates 120 presses south of the border in addition to offering moldmaking and repair capabilities, assembly, painting, and inmold decoration to global customers it serves in Mexico.

This latest ISO 9002 and QS 9000 plant will be called Nypro Chihuahua and serve customers in the telecommunications, automotive, and consumer markets with presses ranging from 50 to 400 tons. 

Nypro spokesman Al Cotton says the acquisition and the continued expansion in Mexico is part of a larger business strategy. 

"We have a number of global customers who are interested in doing more and more with us in Mexico all the time," Cotton says, "so we've been growing very rapidly in Mexico over the last two years. It's a real strategic move for us because it allows us to keep a couple of major, major customers happy." 

Of late, many companies have pulled out of Mexico opting for even cheaper labor rates in Asia and some parts of Eastern Europe, but Cotton says businesses attempting to create a truly global critical mass must have a presence in all the major markets. 

"[The Mexican exodus] is certainly true with the medium-sized companies," Cotton says, "but the huge global companies that have to be everywhere, are everywhere, and Mexico is still one of their everywheres." 

As part of the Chihuahua deal, Nypro also acquired Advance Dial's Chicago factory. The ISO 9002 and QS 9000 plant employs 65 and offers horizontal, vertical, multishot, and thin-wall molding as well as inmold decoration and toolbuilding and maintenance. Called Nypro Applications Development Center (ADC), the new facility will be run as a joint venture with the plant's former management claiming 20 percent and Nypro holding the remaining 80 percent stake. The facility will focus largely on application development and design and support of Nypro's existing Chicago and Iowa operations. 

"[The Chicago acquisition] is part of a totally different strategic initiative to basically add a technological aspect to the Midwest," Cotton says. "This will let us do initial and small runs—to do more startup kind of work on new projects that could then be transferred to other facilities."


Siemens unloads MPM, six other businesses
Following six months of negotiations, the private equity house Kohlberg Kravis Roberts & Co. LP (KKR; London, England) has finalized terms for the purchase of Mannesmann Plastics Machinery AG (MPM; Munich, Germany) and six other units of Siemens AG in a deal with a total value estimated at 1.69 billion euros. KKR will create a new holding company called Demag Holding Sarl to oversee the units, although each business will be managed separately. KKR will maintain a majority stake with 81 percent of the holding company while Siemens retains a 19 percent investment.

The seven businesses have 22,800 employees and combined revenue of approximately 3.5 billion euros, but the lion's share of that total belongs to MPM—the largest machinery manufacturing conglomerate in the world, boasting machinery mainstays like Demag Ergotech, Krauss-Maffei, Van Dorn Demag, and Netstal. The largest of the seven companies involved in the deal, MPM has more than 6400 employees, and even with slumping machinery orders, it tallied 2001 sales of 1.2 billion euros. 

The acquisition is subject to regulatory approval, which should be handed down by the end of September. KKR's managing director, Johannes Huth, was optimistic about the businesses' future given each one's status within its industry. 

"Each business is a market leader, and we believe there are considerable opportunities to work with the incumbent management and to continue to build the individual businesses," Huth said in a statement.


Sweeter the second time around
Van Dorn Demag and Demag Ergotech GmbH are teaming up yet again to combine sales, marketing, and service in North America. According to William Carteaux, Van Dorn president and CEO, the new alliance will be different from the business relationship the two companies shared in the late '90s. "Our companies' approach at that time was never truly unified," he says, "and did not reach the full potential that Demag Ergotech's president and CEO Helmar Franz and I felt it could have."

Under the renewed alliance, all Ergotech brands offered in North America will be sold through Van Dorn Demag's sales force, including agencies in Canada and Mexico. In addition, Ergotech customers will have access to the Molder Action Network—Van Dorn's parts, service, and training group. 

"Our intent is to deliver more. Now with one call, molders can get almost any solution," says Carteaux. The combined product lines cover a broad range of machines at all tonnage levels, including hydraulic, all-electric, hybrid, vertical, multicomponent, high-speed, and general purpose. 

From the Ergotech perspective, Franz predicts several synergies will emerge as a result of the alliance. "We will be better able to analyze customer needs and configure platforms," Franz predicts. "In addition, we will be able to work more closely to harmonize product lines." 

Currently, the two organizations are working to incorporate next-generation Pathfinder controls on both Van Dorn and Ergotech machines. When asked if any models will be dropped from the product line due to overlap, both Franz and Carteaux confirmed that this is a possibility. However, exceptions may be made for multinational customers.


Short shots
The American Mold Builders Assn. (Roselle, IL) completed its state-of-the-industry survey, and the results don't offer any surprises. Moldmaking among U.S. shops was down in 2001 compared to 2000, which was considered a banner year for moldbuilders. The average workweek in 2000 was 51 hours, which dropped to 43 in 2001. Backlog went from an average of 10 weeks in 2000 to six weeks in 2001. Employment at U.S. mold shops is down from an average high of 34 over a five-week period to an average of 25 currently. Of the 343 respondents to the survey, 59 percent reported losing work to Chinese mold shops, with a total of 6425 jobs lost at an estimated dollar volume of $1.2 billion.

Mathson Group (Troy, MI) acquired a global license and the technology to manufacture and sell ceramic injection molding feedstocks from Honeywell International Inc. (Minneapolis, MN). Mathson had previously acquired a MIM feedstock license from Honeywell in April 2001. 

Using variations of different materials for major components including the crank case, flywheels, and clutch shaft, the 700-hp Böhler Uddeholm (Rolling Meadows, IL) drag bike missed a world record in the quarter mile by .09 second during the European Drag Racing Championships at the Santa Pod Raceway in England on May 31.

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