Mannesmann Plastics Machinery GmbH is restructuring its global-leading plastics machinery business, with a new holding company using the Krauss-Maffei name taking a leading role.
Madison Capital Partners, the Chicago investment firm that bought MPM in mid-2006, announced the major structural changes March 16.
Richard Osborne, a Madison Capital executive who was running the business, said the actions create a ``newly integrated, flat organizational structure'' that will improve the company's speed and response to customers.
MPM will get a new top operational executive. Osborne, who was chairman of the managing board and chief executive officer of Munich-based MPM, said he now will be chairman of the machinery group's advisory board. Effective April 1, the new chairman and CEO will be Dietmar Straub, who will implement the strategic decisions.
Straub, who is from Germany, has worked at Mannesmann Group since 1986, well before the formation of Mannesmann Plastics Machinery.
MPM and Madison Capital did not announce any other management changes. Osborne and Larry Gies, Madison Capital's president and chief executive officer, did not return a telephone call seeking comment.
MPM officials announced what they call ``a new strategic direction'' in a March 16 news release. One of the biggest changes: Berstorff GmbH of Hanover, Germany, and Munich, Germany-based Krauss-Maffei Kunststofftechnik GmbH, will merge their extrusion operations. But that does not mean plant closings, according to MPM spokesman Jorg Hettmann.
In response to e-mailed questions, Hettmann said: ``The registered office of the company will be in Munich. Hanover will remain an important production plant, [and] also Munich. We are not going to close any plants.''
The two businesses make different types of extruders - compounding extruders from Berstorff and extruders for making pipe and profiles from Krauss-Maffei. In the United States, they are both located in the same facility, in Florence, Ky., and have worked together on some projects.
By merging their businesses, the combined company will cover a broader range of extrusion technology, MPM said. ``The customers will benefit from a wider product spectrum and a deeper application know-how,'' Osborne said in the release.
Other changes highlighted in the announcement:
* MPM Holding will be integrated into a ``new Krauss-Maffei.'' Swiss injection press maker Netstal-Maschinen AG will become a subsidiary of Krauss-Maffei GmbH. Krauss-Maffei, which makes injection presses, extruders and polyurethane processing equipment, is by far the largest company within the MPM conglomerate. Last year, KM generated sales of about 560 million euros ($690 million).
* The moves to center business under Krauss-Maffei do not affect injection press maker Demag Plastics Group, which has plants in Germany, the United States, China and India. ``Demag Plastics Group will remain an independent entity and be managed separately from the new Krauss-Maffei,'' MPM said in the release. DPG has a ``truly global manufacturing footprint, well-recognized brand name and strong market position,'' MPM said.
Osborne said DPG can serve its customers better ``without being diluted by the other brands.''
The March 16 announcement is the first major operational announcement from officials of Madison Capital, who have remained tight-lipped since Madison bought MPM from New York-based Kohlberg Kravis Roberts & Co. on July 5.