ReifenhÃ¤user GmbH & Co. KG Maschinenfabrik has extended its extrusion technology base by acquiring blown film machinery maker Kiefel Extrusion GmbH for undisclosed terms.
Ulrich ReifenhÃ¤user, ReifenhÃ¤user managing director, said in a telephone interview that the extrusion machinery business is a tough one in the current economic climate.
We decided to manage the crisis, ReifenhÃ¤user explained.
He said the deal, retroactive to Jan. 1, will give ReifenhÃ¤user the broadest blown film extrusion technology base in the world. New to ReifenhÃ¤user are Kiefel's stakes in film stretching units, high density polyethylene film extrusion and technology for small film lines.
Kiefel was sold by Bruckner Technology Holding GmbH, which owned it for about two years. Bruckner sold it to concentrate on the retained Kiefel GmbH thermoforming and welding machinery businesses and its own film stretching business.
Ulrich ReifenhÃ¤user said although his firm was familiar with Kiefel for a long time, negotiations to purchase it started about the beginning of this year.
ReifenhÃ¤user is based in Troisdorf, Germany, and does all its manufacturing at three sites in Germany, a strategy it will continue, according to Ulrich ReifenhÃ¤user.
We are dedicated to German machine building, he said. For high-tech and specialty machinery, you need engineers who can improve on technology.
Kiefel Extrusion, based in Worms, Germany, had sales of about 40 million euros ($57.3 million) last year. It employs about 200 and sells through a global network.
ReifenhÃ¤user had total sales of more than 400 million euros ($573 million) last year and employs more than 1,000. The figure includes film, spun bonding, strapping tape and other machinery. All its machinery begins with an extruder. The firm claims to operate the largest private technology center for plastics extrusion.
Our technology center puts us in the position of being able to globally develop and implement extrusion solutions in line with market requirements, Bernd ReifenhÃ¤user, managing director of ReifenhÃ¤user GmbH & Co., said in a news release.
Bruckner's Kiefel GmbH subsidiary had sales of about 80 million euros ($114.5 million) in 2008.
The combined business is known as ReifenhÃ¤user Kiefel Extrusion GmbH and will be based in Worms.
In an Aug. 26 news conference, Ulrich ReifenhÃ¤user and ReifenhÃ¤user Kiefel Extrusion Managing Director Edgar Gandelheidt stated that all blown film machinery producers worldwide have been under extreme pressure and are reacting by reducing capacity during the market downturn.
In 2007, Kiefel Extrusion had itself estimated the annual value of the worldwide market at around 275 million euros ($392.5 million), although meanwhile that has declined, as have sales of both Kiefel Extrusion and ReifenhÃ¤user's blown film lines.
At the news conference, Gandelheidt said the newly combined firm will have annual sales of 90 million euros ($128.5 million), for an estimated 25-30 percent share of the worldwide market.
There are advantages of combining the portfolios of the two companies, as they are not exactly the same. There is little overlap, with only 10-15 percent of customers having lines from both companies.
Geographically, ReifenhÃ¤user is stronger in the Middle East and Far East, with Kiefel Extrusion stronger in North and South America. Even while sharing the market in Europe, the customer base is different there for both of the new partners.
Gandelheidt said the new joint company benefits from the large agricultural film line experience of ReifenhÃ¤user, as well as the monoaxial machine direction orientation equipment developed by Kiefel Extrusion.
Both companies will benefit from having come to different solutions in die-head design. There have been size differences too, ReifenhÃ¤user having developed die heads up to 2,200 millimeters in diameter, while Kiefel Extrusion has been limited to 80mm. ReifenhÃ¤user also brings a higher degree of backward production integration to the new business unit, such as its own screw production.
Bruckner of Siegsdorf, Germany, had consolidated sales of 415 million euros ($594 million) last year. With the sale of Kiefel Extrusion, it now has 1,050 employees and three companies: Bruckner Maschinenbau, a maker of film stretching lines and cast film machinery; Kiefel GmbH of Freilassing, a producer of thermoforming and welding machines; and Bruckner Servtec, which provides film producers with service and product upgrades.
Maximilian Schneider, Bruckner Technology's managing director, said in a news release that his company plans strategic acquisitions in the next year or two.
ReifenhÃ¤user was established in 1911. The family-owned company is led by three brothers, Bernd, Klaus and Ulrich ReifenhÃ¤user.
Ulrich ReifenhÃ¤user said company leaders made the decision late last year to buy a competitor to make a bold move in the economic downturn. They looked for the right acquisition candidate before deciding to approach Bruckner about buying Kiefel, he said.
Gandelheidt said the firm will be in a strong position when the global economy bounces back.
We feel we have all the power to speed up, and once the crisis is ended, we will be at top speed and we are well ahead of all the competition. That's our vision, he said.
David Vink, senior editor of European Plastics News, and Bill Bregar, senior reporter for Plastics News, contributed to this report.
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