German injection molding machine builder Arburg GmbH & Co. suddenly has abandoned plans to acquire another German press supplier, SÃ¤chsische Kunststofftechnik GmbH of Freital.
In a statement issued March 17, Arburg said: ``Unforeseen, serious changes in the economic conditions existing at Freital shattered Arburg's intention [to buy SKT] at the last minute.''
Arburg of Lossburg, which manufactures presses with 17-220 tons of clamping force, had said Feb. 3 it was negotiating to take over the plant. Arburg hoped to add SKT's bigger machines to its range and penetrate markets in Eastern Europe.
Arburg said that the SKT program, which includes machines as large as 900 tons, ``could certainly have represented a meaningful addition to Arburg's global activities.''
Arburg spokesman Christoph Schumacher would not comment further.
An industry source who requested anonymity said SKT's Freital employees were working reduced hours after the Arburg talks broke down, and that the owners are seeking a new partner. According to the source, if no takers are found by late April, the company may file for bankruptcy.
SKT officials were not available for comment.
SÃ¤chsische was part of the East German state-run plastics machinery firms and one of three facilities producing almost all the Kuasy injection presses used in the Communist bloc prior to the fall of the Berlin Wall in 1989.
In 1990, Mannesmann Demag AG bought a privatized plant at Wiehe that made small presses. Last month, HPM Corp. of Mount Gilead, Ohio, bought the large-tonnage machine operation at Schwerin, Hemscheidt Maschinentechnik Schwerin GmbH & Co.
SÃ¤chsische, the builder of midrange-tonnage presses, was reputed to be the weakest of the three former state operations. The firm was purchased in 1993 by German businessman Werner Lutz for 1 deutsche mark from the Treuhand privatization agency. He undertook to invest heavily in the outdated Freital plant.
The Freital plant has updated its own technology, replacing the old Kuasy machines with newer SKT injection presses. But the firm was faced with powerful competition from established Western European machinery suppliers and limited capital.
Henning Diederichs, director of the industrial parts section of Germany's Plastics Processing Industry Association GKV, said molders in Eastern Europe now want to buy Western technology.
Even eastern German molding machine builders that tried to upgrade and revamp the old Communist bloc machinery do not have sufficient money to compete with Western technology and suppliers. The market for machines from former Communist bloc contries simply vanished after 1990, he said.