Arburg to add manufacturing in China, seek North American site

Machinery company Arburg GmbH + Co. KG will start building injection molding machines outside of Germany for the first time, managing partner Michael Hehl announced at the company's Technology Days news conference.

The Lossburg-based manufacturer will expand its production to Asia and North America. It will first start assembling injection molding machines at its existing factory in Pinghu, China, and after that will consider its options in North America. Arburg has a U.S.-based subsidiary in Connecticut, Arburg Inc., with technical centers in Illinois and California.

The move is a major paradigm shift for the German injection machine manufacturer.

"In the past, we have been asked time and again why Arburg has its production facilities exclusively in Lossburg," Hehl said. "Our answer has always been that this strategy was the right one for us in the past, but that it is not a dogma or carved in stone. On the contrary, we have repeatedly examined other options in terms of cost-effectiveness and customer benefits — and then decided accordingly in each case."

Hehl added that Arburg has considered "international options" in the past but that the company ultimately decided in favor of expanding the Lossburg location instead.

But a "changed global and market situation" with "ever more dynamic requirements" now require a shift in direction, Hehl said. Now Arburg is "thinking very hard" about responding to these conditions with "local-to-local activities."

"The world, which was once fully globalized, is increasingly turning back into the hegemonic regions of Asia, America and Europe, and we are factoring this into our thinking," Hehl explained.

With major trade fairs Chinaplas and NPE coming up in the next couple of months, Gerhard Böhm, managing director sales at Arburg, said the company is anticipating "significant impetus for the future." Arburg Inc. will be at Booth W3743 at NPE2024 in Orlando, Fla., in May.

"[Michael] Hehl has already mentioned and explained the term "internationalization,'" Böhm said. "This is why we are celebrating the world premiere of a new machine outside Germany for the first time: the new electric Allrounder 720 E Golden Electric will be unveiled live at NPE in Orlando. We thus emphasize the huge importance of the American market for Arburg, our leading position in the US and the expansion of our international business."

Despite the renewed focus on international markets, Hehl emphasized that Germany remains the center of the family business.

"Lossburg is and will remain extremely important as a center of development and expertise, especially in light of the challenging situation we still find ourselves in," Hehl said.

That situation is a mix of high energy prices, reduced demand, and a weakened economy which has hit Germany particularly badly. Since January 2024, Arburg has reduced working hours of employees in Germany.

At the news conference, Arburg also shared that its 2023 sales decreased 11 percent year-over-year. Hehl said the "situation regarding incoming orders is and remains weak," and Böhm added he sees no "no discernible signs of any clear and imminent improvement."

Böhm said that "general weakness" is affecting all regions in a similar manner but delineated some peculiarities.

Germany got off to a slightly poorer start to the new financial year, but then it performed "fairly well" during 2023. Excluding Germany, Europe remains "by and large at a consistent level." The U.S. remained at roughly the same level as in previous years, and Asia is "starting to see some light on the horizon" after poor performance in 2023.