Shortly after Battenfeld-Cincinnati Group was bought by the Nimbus investment group in June, the Austrian extrusion machinery firm's CEO Gerold Schley spoke to David Eldridge of Plastics News Europe about the company's future. Battenfeld-Cincinnati will be at Hall 16/B19 at K 2016.
Q: What were the reasons why the company was sold to Nimbus?
Schley: The reason the company was sold, I would say, is we were nearly nine years with Triton [the investment group which was the previous owner] and it was already decided that in 2016 or 2017 Triton would sell to another company. We did an M&A process over the past six months which started in January this year. The contract was signed and now we have an owner who has 100 percent of the shares.
Q: Was Battenfeld-Cincinnati's management restructuring last year connected with the sale?
Schley: Not really. Last year we made an internal organizational change – we put some strategic positions in place, like a CTO, which the company had not had before. So now we have one manager responsible for the whole R&D process, Dr. Henning Stieglitz. And we did the same on the sales side and the financial side. We put in place a CSO [Grant Flaharty] for worldwide sales responsibilities and a CFO [Michael von Cappeln] as well. But those changes had nothing to do with the M&A process. There was just a need for a company of our size to have a structure like this.
Q: Now you have this new owner what is happening in regard to investments?
Schley: We had some initial meetings with the Nimbus managers, and their way of thinking about the business is exactly the [same] way we understand the business. They have a technology background, they understand machine tool manufacturers, and that's a big plus. Their ideas about the business going forward, the strategy, was also close to what we have in our management plans for the next three to five years. So it is not a big change for us – it's an add-on. I would say we are very happy that we have the right partner for us, supporting the company.
Q: Is there anything that Battenfeld-Cincinnati will be able to do with its new owner that it wasn't able to do before?
Schley: We have moved forward with the development of products but, of course, besides that, some investments were on hold through this process. So this will be now the next step, to invest in the company and people – mostly in equipment. The last investment was made in May last year – which was not so long ago – when we invested in a five axis CNC machining center mainly for pipe-head production. In addition to that we want to invest in some other equipment in the next couple of months. That [investment] was a little on hold but it was only a few months. The new equipment is also machining centers and welding machines for screw production, and machining centers for smaller pipe-heads, both PVC and PO pipes.
Q: Are there any plans to open more production facilities anywhere in the world?
Schley: No not yet. At the moment I think we are well-established. We have three production facilities in Europe, one in the US and one in China. With these we can support the major markets we are in. On the further horizon, we have an eye on Africa but at the moment there are no plans to open any production in Africa. We're looking intensively at that market. We already have quite good business in the northern part, in the Maghreb countries [the western portion of northern Africa], and some projects in South Africa. But in between [those regions] there is a huge market. There are no plans to build production facilities… but you never know in five or 10 years.
Q: Which are the strongest markets for your company?
Schley: I would say, from the product side, we are always looking for ways to take the next step in our PO pipes, PVC pipes and profiles business. These are our traditional markets, we are seen in those markets as a technology leader. In this role, our motto for K 2016 this year, “Driven by Innovation,” is a clear statement about our markets.
What we see growing more is the packaging market. We are in a niche at the moment with sheet for thermoformed packaging. This is on our priority list: to grow our packaging business in the near future.
On the regional side, of course Europe is our home market. We see Europe as stable at the moment. Our growth plans in the European market are similar to what VDMA [Germany-based association for machinery makers] is forecasting, somewhere in the range of 2 to 3 percent [annual growth].
We are seeing good potential for us in the packaging market in the U.S. and the Americas. And of course there are the growth markets in Asia, Southeast Asia and China. We introduced last year a mid-market line in China which is very successful. So we see in that area a growing market for us.
Q: On balance, are you optimistic or pessimistic about world markets in the next year or two?
Schley: I am optimistic. Okay you never know [what will happen in the global economy], but if the world continues like it is at the moment I am quite optimistic that we have a stable business. There are always markets coming down and some coming up, but overall I think that in the plastics industry we are in a good market area.