They’re just not the same thing, even though both are linkups that paired Asian and Western European machinery makers.
We’re talking about two of the biggest merger deals in plastics machinery history, which both combine European and Asian brands: KraussMaffei/ChemChina and Sumitomo/Demag Plastics Group. Each talks about “synergy” but there is no comparison.
First a quick recap: Japan-based Sumitomo Heavy Industries Ltd. in 2008 bought Demag Plastics Group, then known for broad-line injection molding machines. Sumitomo injection presses are used in medical, micromolding and other high-precision molding. It marked the first time a Japanese injection press maker bought a German one.
The other deal is much, much more recent. Chinese state-owned giant ChemChina’s purchase of KraussMaffei was finalized in January of this year.
The “synergy” difference is pretty stark. ChemChina — China National Chemical Co. — does not have any plastics machinery. The only real overlap, where ChemChina and KraussMaffei can work together: Rubber for tires.
At KraussMaffei’s news conference during K 2016, CEO Frank Stieler spelled it out when he said KM’s Berstorff extruders will fit with ChemChina businesses that make tire curing presses and other tire-making equipment. ChemChina also recently purchased Italian tire maker Pirelli.
OK, so the ChemChina/KraussMaffei mashup is pretty basic. Of course, KraussMaffei already makes a broad variety of plastics machinery in China, so there will be some integration and maybe more news coming there.
In contrast, when Sumitomo bought Demag, two machinery brands — and two totally different cultures — came together into a single company.
Tetsuya Okamura, a Sumitomo executive, became the first CEO of Sumitomo Demag. He moved to Schwaig, Germany. Brand new to the job, he told trade press reporters that, yes, he loves German beer, and likes sausage and red cabbage.
He came in 2008. Fast forward to now, and the K 2016 show in October was his last K — at least his last as CEO. He took the opportunity to reflect on his tenure.
“It was very difficult. Because, even though both companies produced injection molding machines, they had different kind of sales strategy,” Okamura said in an interview as the giant show wound down in Düsseldorf.
“Sumitomo is much [more] focused on high-end machines. But for Demag it was much more general-purpose.”
It took a long time to unify the companies.
“I initially thought in my mindset that it can be changed easily,” Okamura said. “But still, a kind of European mentality, the old Demag mentality, wanted to sell general purpose machines for the fields. But this is not correct.”
At first, Okamura thought it would take a much shorter amount of time to unify the two companies, in technology, business strategies and culturally.
Okamura said every three years, management made a mid-term plan. He’s happy that Sumitomo Demag is on solid ground now.
Okamura now has a deep cross-cultural understanding of work, management and attitudes — talents he can bring to Sumitomo Heavy Industries back in Japan, if that’s in his future.
“I think the difference between Japanese culture and Germany culture is not so big,” he said. “I think the bigger challenge is the company culture, of Sumitomo and of Demag, was completely different. Its bigger than the difference between Japanese culture and Germany culture.”
That’s a good point. Each company’s culture really is different, even firms on the same continent.
Okamura said you can’t make stereotypes about business. “Because even German or European companies — the way of thinking of Demag is different from way of thinking of Engel, and also than the way of thinking of KraussMaffei or Nestal. Completely different. So I cannot say, ‘in a German way’ or ‘European way’ or ‘Japanese way.’”
It was a challenge for a Japanese executive running a German operation. He loved it. He admires Germans.
Japanese people generally just follow orders at work, Okamura said. But Germans have to be convinced that an idea is sound, then they are self-motivated, all-in.
Okamura joked that the German employees often did not believe what he was saying. “It is very tough. But after a manager convinces them, they can do things by themselves.
“German people have their own engine,” he said.
Okamura is moving on to an as-yet undisclosed job at Sumitomo. But he hopes to keep contact with the plastics machinery business.
“I want to visit again, in the future, to the K show. It is a very interesting show. And also, I want to see how Demag will be developed in the future. Because it’s kind of my baby,” he said.
Bregar is a Plastics News senior reporter. Follow him on Twitter at @MachineryBeat25.