Arburg GmbH + Co. is about to move beyond its niche as a small-tonnage injection molding press maker.
The German firm will make a quantum leap into presses with much larger tonnages if European authorities approve its purchase of another German company, SÃ¤chsische Kunststofftechnik GmbH.
Arburg announced the pending acquisition Feb. 3. Terms were not disclosed.
Arburg of Lossburg, Germany, currently makes machines with clamping forces of 17-220 tons. SÃ¤chsische Kunststofftechnik sells machines from 220-880 tons.
Arburg employs 1,600 worldwide. Company officials said the purchase will be used as a base to penetrate Eastern Europe.
Arburg also will sell the larger machines in North America, said Peter Liebe, senior manager of sales for North and South America. Arburg's U.S. operation is in Newington, Conn.
Liebe said Arburg will retain SÃ¤chsische Kunststofftechnik's 150-employee factory in Freital, in eastern Germany.
``It is necessary because the manufacturing concept is completely different, with bigger components and bigger machines,'' Liebe said in a Feb. 12 telephone interview from Germany.
Before the 1989 fall of the Berlin Wall, SÃ¤chsische Kunststofftechnik and two other East German companies made nearly all the Kuasy-brand injection molding machines used in the Communist bloc. Production was divided, by the size of machines produced, among the three factories, with the Freital plant making midsized machines.
But after the wall fell, the German government began selling off the state-owned machinery companies. German press maker Mannesmann Demag AG picked up the first one, buying a small-press factory in Wiehe in 1990.
In 1991, Hemscheidt Group bought a plant in Schwerin that makes large-tonnage presses. Financial problems forced that company — Hemscheidt Maschinentechnik Schwerin GmbH & Co. — to file for bankruptcy last summer, and it was put up for sale.
Now Hemscheidt is about to be sold to HPM Corp. of Mount Gilead, Ohio, in a pending deal announced last November. That deal is very close to being completed, said Neil Kadisha, president and chief executive officer of HPM's parent company, Stadco Inc. of Los Angeles.
According to many German machinery officials, of the three factories—Freital, Wiehe and Schwerin —the Freital plant was the weakest, given its location in an old industrial area, housed in an aging structure that is landlocked by other buildings.
SÃ¤chsische Kunststofftechnik had been the last of the eastern German operations still on its own when, in 1993, a German businessman, Werner Lutz, bought the Freital plant for 1 deutsche mark from the Treuhand privatization agency.
Lutz had pledged to invest millions of dollars in the firm. He could not be reached for comment for this story.
Liebe of Arburg said that the company's technology was the main attraction for Arburg.
He said the deal still needs final government approval.