Officials of Mannesmann Plastics Machinery GmbH and SMS AG are refusing to elaborate on a European press report that plans to merge the companies have been canceled.
Plastics & Rubber Weekly and Reuters reported March 22 that merger plans - which never before had been reported or disclosed - now have ended. PRW's report blamed poor financial results at SMS Plastics Technology, which makes Battenfeld injection presses, American Maplan and Cincinnati extruders and Battenfeld Gloucester film equipment.
PRW quoted longtime SMS Chairman Heinrich Weiss as saying the merger ``has been canceled, not just put on ice.'' Weiss was at an SMS news conference in Dusseldorf.
Officials of SMS did not return several telephone calls.
Munich, Germany-based MPM, the world's biggest plastics machinery maker, had no comment. MPM makes injection presses, extruders and other equipment under the Krauss-Maffei, Demag Plastics Group, Berstorff, Netstal and Billion nameplates.
It is unclear what a ``merger'' would have meant. In 2000, SMS announced it was selling the Battenfeld injection molding press business to Madison Capital Partners of Chicago; but then SMS abruptly canceled the deal.
One thing is clear: SMS is not happy with the performance of its plastics machinery operations.
SMS lost 19 million euros ($21.5 million), ``due to the exceptionally poor performance of its Plastics Technology'' operations, the company said in a news release announcing its 2003 results.
Without spelling out details, SMS said ``radical restructuring is taking place'' at SMS Plastics Technology. Plastics machinery ``is still suffering from sluggish consumer demand,'' which hurts machinery demand, SMS said.
The Weiss family owns all of SMS, which had 2003 sales of 2.15 billion euros ($2.43 billion). In addition to plastics, SMS makes equipment for steel mills and forging.
SMS Plastics Technology, based in Meinerzhagen, Germany, accounts for about 23 percent of the parent company's orders.
In the news release, Heinrich Weiss said SMS will return to profitability in 2004. The global economy is recovering, but ``it remains to be seen'' whether exports of machinery and plant construction will benefit from the rebound, because of the ``ever-stronger euro.''