The decision by SMS Plastics Technology to source major components for its Battenfeld EM all-electric injection press from competitor Ferromatik Milacron Maschinenbau GmbH raised the eyebrows of some machinery makers during K 2004 - but officials of both companies defended the deal as necessary in a cutthroat global market.
``It makes a lot of sense, because a company like Battenfeld, we have limited resources,'' said Wilhelm SchrÃ¶der, managing director of SMS in Meinerzhagen, Germany.
``The fight is between the Europeans and the Japanese, and not between the Europeans. So it makes a lot of sense to combine forces,'' said SchrÃ¶der, who called Ferromatik a ``market leader'' in all-electric technology.
Michael Koch, who during K was the managing director of Ferromatik Milacron, agreed.
``We see the Japanese suppliers of electric machines encroaching on European markets,'' he said in an interview Oct. 22. Koch left Ferromatik Milacron a few weeks after the K show. An SMS spokeswoman said Koch's departure will have no impact on the manufacturing agreement between Battenfeld and Ferromatik Milacron.
Battenfeld introduced the EM during the last K show, in 2001. But the press was too expensive, Battenfeld officials said. The supply relationship with Ferromatik Milacron allowed Battenfeld to reduce the price.
During K 2004, Koch said Ferromatik Milacron is building a base machine and major mechanical components at its headquarters plant in Malterdingen, Germany. Battenfeld adds sheet metal, a Battenfeld controller and electrical cabinet. ``The final assembly and runoff is done in the Battenfeld facility,'' he said.
SchrÃ¶der hinted the two companies may do more cross-machining. The EM, he said, ``might not be the last thing we do together.'' Asked for more details, he said that many injection press makers, not just Battenfeld and Ferromatik Milacron, are studying the issue, to see where it makes sense on basic parts - in other words, parts that are not key ``know-how'' components.
The machinery downturn means a lot of manufacturers have excess capacity. ``The industry has this huge installed machining base and everybody tries to fill it up to bring up utilization,'' SchrÃ¶der said.
Koch said the two companies are looking at potential ``joint sourcing benefits.'' But he said the companies are focusing first on the EM arrangement.
Ferromatik Milacron, a unit of Milacron Inc. in Cincinnati, is starting to source components from its sister operations in India and China, he said.