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Sumitomo investing €50M in European facilities; further changes to come

Japanese machinery manufacturer Sumitomo Heavy Industries (SHI), which in March 2008 completed its acquisition of injection molding machine manufacturer Demag and then merged it into SHI’s own Sumitomo Plastics Machinery Ltd. (SPM) molding machine operation, creating one of the world’s top five molding machine manufacturers, announced it will invest more than €50 million in the Sumitomo Demag facilities in Germany.

Japanese machinery manufacturer Sumitomo Heavy Industries (SHI), which in March 2008 completed its acquisition of injection molding machine manufacturer Demag and then merged it into SHI’s own Sumitomo Plastics Machinery Ltd. (SPM) molding machine operation, creating one of the world’s top five molding machine manufacturers, announced it will invest more than €50 million in the Sumitomo Demag facilities in Germany. In a related move, the parent company intends to merge its wholly owned subsidiary SPM (Chiba, Japan) into SHI on July 1, 2009.

Sumitomo_Demags-Okamura

Tetsuya Okamura, spokesperson for the company’s management
Raik Flämig, the company’s GM for marketing, in answer to questions from MPW, wrote that SPM Ltd. is solely a sales and service subsidiary that will now be rolled into the parent firm. The change has no impact on the company’s manufacturing facility in Chiba, he added. 

In a notice at SHI’s website, dated March 31, 2009 and regarding the merger of the SPM subsidiary, SHI states that “demand has dropped dramatically and customers are increasingly shifting orders offshore, rendering any major domestic recovery unlikely.”

In Europe, meanwhile, the company plans to turn the Wiehe, Germany facility it acquired, long the manufacturing base for Demag’s small (to 210 tons clamp force) hydraulic and electric molding machine manufacturing, into the manufacturing base for all all-electric injection molding machines within SHI, so that both the all-electric IntElect-brand presses for the European market will be made there as well as the Japanese SE-brand machine range. Sumitomo (SHI) Demag Plastics Machinery GmbH headquarters is in Schwaig, Germany, near Nuremberg; larger machines are manufactured there.

“Focusing our traditional manufacturing base at Wiehe on all-electric injection molding machines will help us be prepared for the revival of demand that will follow the current market crisis. There will be a strong and early demand for smaller all-electric injection molding machines globally once the markets will recover,” stated Tetsuya Okamura, spokesperson for the company’s management. He added that the €50 million-plus investment involved improvements to both the Schwaig and Wiehe facilities.

As a result of the concentration of all-electric machine manufacturing in Wiehe, production of electric injection molding machinery at the Sumitomo factory in Jefferson, GA will be gradually reduced and in the midterm will then cease; no exact time frame was given.

In related news, Sumitomo (SHI) Demag Plastics ended its L&T-Demag Plastics Machinery Ltd. manufacturing agreement, which it formed in 1999 in Chennai, India with Indian conglomerate Larsen & Toubro, with SHI planning to establish its own subsidiary in India. [email protected]
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