Arburg posts sales boost as it manages COVID, other crises

Lossburg, Germany — Speaking at the company's traditional annual Technology Days open house on June 23, following a two-year pause due to COVID, Jürgen Boll, managing director finance, controlling and IT at injection molding and 3D printing machinery producer Arburg GmbH + Co KG, announced that consolidated sales rose by 27 percent in 2021 to 735 million euros ($778 million).

This exceeds the level of 700 million euros ($741 million) predicted at the October 2021 Fakuma fair by around 5 percent and is "close to" the levels achieved prior to the COVID crisis, Boll said.

Arburg's owner, Hehl International GmbH + Co. KG, posted 2019 sales of 738 million euros ($781 million) and 754 million euros ($798 million) for 2018, and 698 million euros ($739 million) in 2017.

The results showed a short-term V-shaped decline and rapid recovery. Very good results in November and December had made an important contribution towards exceeding the forecast.

As the incoming orders level is "in good shape," Arburg kept to its intended production plan. Boll admitted however that the incoming orders level "has quietened somewhat" in the second quarter. This is due not only to additional insecurity since February resulting directly from the war in Ukraine, but also other partly related issues such as a return of high inflation and supply chain interruption, also from the return of COVID lockdowns in China. These issues have led to some customers postponing modernization of their machine fleets. But they continue to order spare parts as before, as they fully utilize their existing machine parks.

None of the 2020-21 COVID uncertainty prevented Arburg making large investment totaling 21.6 million euros ($22.8 million) in 2021. This money went into infrastructure and production technology and logistics at the Lossburg headquarters.

The investment went into measures to increase Arburg's already renowned exceptionally high degree of vertical integration in production means. One example of the areas benefiting from the investment is a new line for electronic circuits with surface mounted devices (SMDs), as opposed to traditional through-hole soldered wired components. Metal processing investment went into two new processing centers, a new large erosion machine for mold production, a new universal CNC cylindrical grinding machine and a new thread and gear tooth grinding machine for planetary roller screw drive components.

Plastics News observed at the open house that Arburg now offers a new five-year warranty for its planetary roller screw drive. The company claims that this type of screw drive has up to 100 percent higher power density than ball screw drives.

Boll admitted that such high capital commitments as those made by Arburg tend not to be favored by accountants. This doesn't concern him as an accountant however. He said Arburg's family owners and the other managing directors support him, as "the ability to deliver for the benefit of our customers is far more important."

He pointed out that other people have laughed in the past at this typical Arburg approach, but "there are far fewer of them laughing now," having seen what overdependence on particular supply chains can do to a business and its short and long term prospects when such chains are interrupted by various crises, Boll stated.

But Arburg also invested in staff in the past year, with the April 2022 level having increased by 6 percent to 3,500 employees worldwide since April 2021. Lossburg accounts for 2,900 of the employees, with the remaining 600 at 34 locations in 25 countries.

Looking at the market situation, Gerhard Böhm, managing director for sales and service, observed that unlike some competitors, "we are less affected by the COVID situation in China, as we have no production facilities for machines there." He was more concerned about Arburg suppliers increasing prices by 15-20 percent.

"They are much more brazen than we are. We should need to apply a two-digit price increase for our machines, but we are trying to balance it out with a temporary surcharge, in the hope it will get better some time," Böhm said.

While Arburg remains able to deliver machines, there are some competing machinery producers with delivery difficulties, as they simply don't have the required components in hand, Böhm observed.

Managing partner Michael Hehl added, "It has been impossible to strategically plan for the challenges posed by the social, economic, and political developments and situations confronting us over the last two years. These difficulties remain, and will continue to challenge us in the future. All of this means new challenges on an almost daily basis for our society and our company."

Hehl pointed out that Arburg has so far mastered these challenges and he is proud to have managed without production standstills. Key elements, according to Hehl, are the central development and production location in Lossburg that enables high flexibility, strong and mostly local supply chains, and long-term material management that has enabled "focused filling" of Arburg storage facilities.

There were 4,200 visitors at the traditional annual four-day Technology Days open house, head of public relations Susanne Palm said. The event had been canceled in 2020 and 2021 due to COVID crisis and even the 2022 event had been postponed from March to June, for the same reason. Against this background, it would have been just too optimistic for the 2022 event to attract 6,000-7,000 visitors from 50 countries, as has been the case just prior to the COVID crisis.

Michael Hehl said that the Technology Days have been held since 1999, as a "second-to-none international industry event." A digital version of the Technology Days "was never an option for us over these last two years. We preferred to wait it out until we could really start again," Hehl stated. This is because "the special spirit of these days simply must be experienced live, on location, and close up," he stressed.

Hehl was adamant that what was on show should not be perceived as a preview of Arburg's presentation at the K 2022 fair in October, with details usually revealed on the evening before the fair opens. Nevertheless, it is likely that at least the major themes of the Technology Days event will reappear in Düsseldorf in October.