HPM Corp., the second-largest U.S.-owned manufacturer of injection molding machines, has signed a letter of intent to acquire Hemscheidt Maschinentechnik Schwerin GmbH & Co. in Germany, both companies announced Nov. 19. Hemscheidt employs about 200 in Schwerin, a city in the former East Germany. The company, which has downsized dramatically since Germany has reunited into one country, filed for bankruptcy July 29 in German District Court. The company later was put up for sale.
HPM, in Mount Gilead, Ohio, traditionally has focused on the North American market. Stadco Inc. bought HPM earlier this year, with a goal of making HPM more international. Privately held Stadco of Los Angeles makes tooling and machinery for the aerospace industry.
``We have a very serious intention to go through with this deal and, lacking any surprise, we will do that,'' said Neil Kadisha, Stadco president and chief executive officer.
Hemscheidt officials have said they wanted to sell to a company that would keep running the factory in Schwerin, in the northern part of Germany. Kadisha said HPM and Stadco will continue operating the plant, and probably expand it as well.
HPM's move to acquire a German company and do manufacturing on two continents appears to follow a trend of fewer, but more global, plastics equipment suppliers, said executives at two other injection press makers, Engel Machinery Inc. and Van Dorn Demag Corp.
``In all reality, I think if you're not a global player in the future, I think you will not survive,'' said Kurt Fenske, vice president of sales and marketing at Engel. Engel, an Austrian company, with manufacturing in York, Pa., and Guelph, Ontario, had looked at buying the Schwerin company after the Berlin Wall fell, but balked because the facility was outdated, he said.
Hemscheidt has a U.S. office in Wixom, Mich., where the firm has seen some success selling machines to the automotive and appliance markets.
``This is just a continuation of the consolidation trend that's going on in the whole market for plastic injection molding machines,'' said William G. Pryor, president and chief executive officer at Van Dorn Demag Corp. in Strongsville, Ohio - which itself was purchased by Germany's Mannesmann Demag AG three years ago. ``We really wouldn't see this as having much of an effect on the global market, since both are fairly minor players,'' he said.
Stadco wants to expand HPM's global presence significantly in the manufacture and distribution of injection molding machines.
``I don't think it's appropriate to discuss hypothetical alternatives, but our intention is definitely to expand the operation in the German plant,'' Kadisha said. ``Our goal is major expansion in Europe as well as internationally, and very close cooperation between both divisions.''
Hemscheidt builds injection presses with clamping forces of 55-3,527 tons. The company has technology to make machines with tie bars that pull back during each cycle, giving easy access to the mold area. The firm also has started making machines with no tie bars at all. Officials from Hemscheidt were not available for further comment.
Established in 1877, HPM is second in sales only to Cincinnati Milacron Inc. of Cincinnati among U.S.-owned makers of injection molding machines.
Kadisha added that Stadco will continue running other businesses at HPM besides injection molding, such as extrusion machinery.
``HPM has no intention of selling any division of the company,'' he said. ``We are fully committed to expand our business and be among the five major equipment manufacturers in this industry, globally. We are developing a lot of new products with new technologies, investing a ton of money bringing new product into the market, and we believe the sleeping giant has woken up. We will continue to make our mark in the plastics industry in the field (in which) HPM has the utmost expertise, which is injection molding machinery, as well as extrusion for various industries.''