By: Roger Renstrom
June 25, 2013
Balda AG is evolving with new initiatives.
Bad Oeynhausen, Germany-based Balda acquired C. Brewer Co. and two Team HK units Dec. 31 as part of a buy-and-build strategy to boost its medical business and penetrate the U.S. health-care market.
"Now we are establishing Balda 2.0," said Rolf Eilers, CEO of the Balda Medical GmbH & Co. KG subsidiary. Eilers spoke in a June 17 phone interview from Philadelphia where, for the first time, Balda, Brewer and HK exhibited jointly at UBM Canon's Medical Design and Manufacturing East show.
"After several years, we are in a very stable situation," said Eilers, "We have cash reserves and are debt-free, and our operations are doing quite well."
Proceeds from the January sale of the remaining shares in a former investment in touch-display manufacturer TPK Holding Co. Ltd. of Taipei, Taiwan, boosted Balda's profitability before and after taxes.
One of Eiler's tasks is to bring the two Southern California entities — Brewer in Anaheim and the HK units in Oceanside — together legally as well as operationally. "We have not decided how, but, at the end of the day, we want to bring the sides together to have one legal entity," he said. "We will have one operation" under the Balda Medical Group identity.
New brochures, a new website and a new email domain are first steps.
About 35 percent of Balda Brewer's revenues have come from medical clients and 65 percent from technical business including optics.
"We still have the technical business with sunglass frames," said Eilers, who visited the high-profile optics customer and believes a "good understanding" exists.
Medical customers account for more than 80 percent of Balda HK's sales.
No title changes have occurred for the Brewer brothers in principal positions. Chuck Brewer III is CEO and Michael Brewer is president for Balda Brewer operations in Anaheim, Irvine and Ontario, Calif. Gerry Krippner is president and CEO and Ron Krippner is vice president of sales for Balda HK, including the operations of HK Plastics Engineering Inc. and HK Screw Machine Products in separate facilities in Oceanside.
During the ongoing integration, Eilers and other Balda managers in February participated in the MD&M West show and in March worked with Balda Brewer and Balda HK executives on strategic objectives. In April, they gathered the Balda Brewer and Balder HK sales people for a meeting.
In a play on California's history, Eilers termed the integration process Balda's "gold rush." Among other sessions, he held a town-hall-type meeting with all California employees.
"We are not a big organization," he said. "We have to do it hands-on."
Tasks in marketing, operations, human resources and other functions were identified, prioritized and assigned to several groups. "We gave certain responsibilities to members within the team," Eilers said.
Initially, individuals with marketing tasks will visit Balda in Germany to familiarize themselves with the company's system for customer relationship management.
"We have a formed group of people dedicated to medical devices and technical applications," Eilers said. "That is not typical."
The typical steps in market consolidation involve larger companies buying smaller companies and creating an imbalance. "Here we have a different situation," he said. "We are equal as partners, and now we have more American employees than German employees."
As of March 31, Balda had a total of 949 employees, of whom 741 work for Balda Brewer and Balda HK.
Including the TPK proceeds, Balda has sufficient resources to expand further. "Now we are focusing more on Europe" for any acquisition, he said. "We want to strengthen the medical business."
The Balda medical businesses in Germany and the U.S. are "slightly different, with different customers," Eilers noted. The California operations focus on diagnostics and medical devices, and the German business deals with diagnostics, pharmaceuticals and R&D.
"We will have those in America do more on R&D," he said.
The California side typically deals with single components, and the German operations often handle complete systems through the sterilization process. "We want to develop that [capability] in the U.S.," Eilers said.
Some of Balda's European customers have indicated an interest in working on new projects with the California operations.
Balda Brewer operates 85 injection molding machines, Balda HK has 34 presses and Balda in Germany has 55 units. Those numbers are slightly higher than previous reports.
On March 31, Balda AG sold its money-losing operation in Ipoh, Malaysia, to the injection molding plant's management team, headed by James Lim.
The Ipoh site operates now as Blue Ocean Genius Sdn. Bhd and manufactures consumer electronic products.
The Malaysian entity was suffering from changes in the mobile telephone business of its customers and was a liability for Balda.
In the future, "if we need an Asian side for our business, we have to place it somewhere else," Eilers said.
The MD&M East show was held June 18-20.