KraussMaffei Details Future Potential Strategy Under New Owners

Frank Stieler, CEO of KraussMaffei Group, who addressed the plastics trade press on April 24 at a Chinaplas Media Day event, one day prior to the Shanghai’s show opening, started his conference with a clear declaration.

 

“ChemChina will provide KraussMaffei with opportunities that the company did not have under the old ownership,” Stieler said. Stieler noted that the venerable Germany plastics machinery manufacturer had been owned by a string of private equity companies, noting that only the last one, Onex, reinvested in its business. Due to that investment, Stieler said that KM’s business grew in 2015, with revenue rising 9% from Euro 1.12 billion to Euro 1.212 billion, lead by the NAFTA region and the automotive sector.

 

Stieler said in terms of size, ChemChina with 140,000 employees and revenue of Euro 37 billion, is on par with companies like Bayer and BASF. The maker of agrochemicals, rubber products, chemical materials and specialty chemicals was created in 2004. He also said the state-owned company will give it access to markets and customers in China that it could not get at as a foreign-owned business.

 

An Opportunity in Rubber
KraussMaffei and ChemChina see the potential for the newly integrated company in the rubber space; in particular, with ChemChina’s current production of rubber machinery rolled into KraussMaffei’s machine production.

 

“The acquisition gives us the opportunity to expand our portfolio beyond plastics machinery equipment,” Stieler said. “ChemChina has rubber machinery and we are currently in discussion to integrate that into KraussMaffei’s machine manufacturing.”

 

None of this is finalized until the deal’s actual close, which could happen as soon as the end of April or May, but at this time, ChemChina and KraussMaffei are mapping customer profiles to see where clients are served by one of the firms but not the other to locate potential areas for cross selling.

 

In terms of its existing China footprint, Stieler and Christian Blatt, CEO of KM in China, noted how the company’s production facility in Haiyan is helping the machine maker in China and beyond.

 

In 2013, it began production of its MX series injection molding machines at that plant, and since that time more than 100 MX series machines have been sold in China. At the show, the company is marking the new production of the larger GX series machines in China, with the first press  to be officially sold on the opening day of Chinaplas. Blatt called the GX machine the fastest 2-platen machine in Asia. At the show, it will will mold polypropylene fish boxes in an 11-second cycke with a shot weight of 250g.

 

Haiyan represents KM’s only machine manufacturing outside of its Münich headquarters. Stieler noted that Haiyan’s relative flexibility compared to its main manufacturing site have allowed the company to quote much shorter lead times from presses. For many U.S. customers, that shorter lead time, up to three to four months not counting shipping time from China, has prompted them to order presses from KM in China. In fact, at this time Stieler said the factory in Haiyan exports up to one third of its production to the U.S.

 

Taking a Longer Outlook
Stieler said its new owners will allow the company to make longer term strategic plans. “Ownership by ChemChina is not perceived to have an impact on the way we operate our business,” Stieler said. “It is providing us the environment to go for long-term strategies, and have an opportunity to develop and set forth much longer term plans where we believe we will increase market share. That is not something you can normally do under a private equity owner.”