NEW YORK — Battenfeld GmbH is reorganizing its Brazilian machinery manufacturing operations by putting its blow molding machinery business on the selling block and scaling back its injection press operation, according to a top official.
Battenfeld Pugliese Equipamentos Ltda.'s injection press operation has been restricted to just final assembly, using imported parts. High costs for Brazilian labor and benefits were a major factor in the decision, according to Helmut Eschwey, a member of the managing board of SMS AG, which owns Battenfeld of Meinerzhagen, Germany.
At the same time, Battenfeld is adding regional offices in Chile, Argentina and Mexico.
In Brazil a new company, Battenfeld do Brasil, will replace Battenfeld Pugliese, a well-known name in Brazil. Battenfeld now owns 100 percent of Battenfeld do Brasil.
For now, the company is still based in the Pugliese building, but Eschwey said the firm plans to find its own facility.
Eschwey outlined Battenfeld's Latin American strategy in a June 30 interview in New York. At a pre-K'98 news conference there, the company revealed its new technology for October's K show in Dusseldorf, Germany.
Battenfeld has built equipment in Brazil since 1966. That year, Battenfeld and its local sales agent, Ferrostaal do Brazil, set up Ferbate SA. The company grew to become a major injection press supplier in Brazil.
Battenfeld's blow molding history is much shorter. In 1994, Battenfeld expanded into blow molding, purchasing Pugliese Maquinas e Equipamentos Ltda. in Sao Paulo.
Operating in the former Ferbate plant, Battenfeld Pugliese makes continuous extrusion machines and accumulator-head machines. But in 1996, Battenfeld sold its two major blow molding machine lines, Hartig, to Davis-Standard, and Battenfeld Fischer Blasformtechnik GmbH, to Krupp Kunststofftechnik GmbH. After those divestitures it no longer makes sense for Battenfeld to make blow molding machines in Brazil, Eschwey said.
On the injection molding side, the Brazilian plant no longer is manufacturing all the major components that go into the machine. Instead, the new Battenfeld do Brasil will only do final assembly from parts imported from other Battenfeld operations, Eschwey said.
A review of all the company's factories showed that ``Brazil is the most expensive manufacturing site in the Battenfeld group,'' Eschwey said.
Labor costs are high.
``Productivity is still inferior to the U.S., and management quality performance is not living up to the standards of Europe and the U.S.,'' he said.
Eschwey said the company will add sales offices in Latin America and Mexico in the next six months.
``We're heavily investing in Latin America in our own sales and service,'' he said.
Battenfeld's 100 percent buyout in Brazil follows a similar move last year, when the company purchased all of its partner in India, Mafatlal Micro Machines Ltd. But Eschwey said India, unlike Brazil, will continue to do its own components manufacturing and metalworking, because India has remained a low-labor-cost country.
In technology news, Battenfeld used the New York news conference to announce:
The company is entering the fledgling market for molding very tiny parts, such as medical sensors implanted under the skin. Battenfeld's Microsystem uses a screw, dosing cylinder and plunger to mold parts that can weigh less than one-tenth of a gram.
A new lower-priced toggle-clamp injection press, the TM series, in clamping forces from 55-500 tons. TM stands for toggle modular. Battenfeld will continue to offer its BK toggle press.