Neumann led Engel's global growth, found partners who ‘push us to new limits'

Peter Neumann, former CEO of Engel Holding GmbH, enters the Plastics Hall of Fame after putting the injection press maker on a path that's made it one of the world's largest molding machine suppliers.

Neumann, who became head of the group in 1997 and retired in 2016, oversaw the building of the company's three factories in Asia, dramatic investments that positioned it to take advantage of the economic growth in China and the region the last two decades.

He also steered Engel during technological changes like rising automation, which the company closely linked to its molding machines to offer manufacturers in high-cost, developed countries ways to boost their competitiveness.

And he helped see the firm through what he described as his most personally difficult time as an executive: The aftermath of a major flood in 2002 that "more or less completely destroyed" its headquarters and main factory in Schwertberg, Austria.

Through it all, he said, he always tried to push the company in new directions, to never be "satisfied with what we have reached already."

"I've always tried to have partners with me who push us to new limits," he said. "That's something that I think made us as a company and as a team successful."

In his time in senior leadership, the firm went from fewer than 300 million euros ($360 million) in sales to 1.36 billion euros ($1.63 billion). Today, though, Neumann is going at a little slower pace, enjoying sailing the Mediterranean Sea and spending time with his twin 7-year-old grandsons.

"I'm sometimes the ski instructor for them," he quipped.

He still stays in the business world, though. He sits on corporate boards; is helping a friend transition a family-owned firm to its next generation; and consults with Engel executives, including current CEO Stefan Engleder, who is Neumann's nephew, at the family-owned firm and the fourth generation to run the company.

"The nice thing is you can give your opinion to something but you have not anymore to decide it and you have not the responsibility anymore," Neumann said.

Neumann joined the company in 1982, becoming manager of worldwide sales and marketing in 1984. It was a different, decidedly less global time for the industry. Engel's sales were in the neighborhood of what today would be about 75 million euros ($90 million), according to information from the Hall of Fame.

Big developments at the time included establishing the first sales and service subsidiary in Asia in 1986, in Hong Kong, and expanding sales more heavily into Italy, a market then dominated by Italian suppliers.

"Italy was a huge market, but Engel and the Germans had not sold many machines because the local industry was so strong," Neumann said. "I was young and I said why don't we sell machines in Italy. Put down a subsidiary; let's show them what we can do better."

In three years, the company had substantial business there, Neumann said.

Coming from a small country like Austria, having an export focus for a capital equipment maker is natural.

But Engel invested more globally than most. For Neumann, he said his focus on world markets came early, spurred on by a trip he took through Asia in the mid-1970s, when he was 21 and working toward a degree in business and a doctorate in social sciences and economics at the University of Vienna.

"As a student, I was traveling a lot," he said. "I was traveling through Thailand and China, and at that time, it was not so open as it was today. I was so fascinated about the culture, not the historical culture but the business culture and the way people are working and hardworking."

In Hong Kong, he said, he got an inkling of the economic changes to come in China: "Hong Kongese already had their footprints in mainland China because they saw how it would change."

Population projections and the things he saw on that trip helped convince him, he said, that Asia would become "the world-leading business region."

"You have seen that something is really moving at that time," he said.

The lesson stuck. In 2001, Engel opened a machinery plant in Pyeongtaek, South Korea, its first in Asia, followed in 2007 in Shanghai and later in Changzhou, China.

In fact, fellow machinery executive Gunther Hoyt, who nominated Neumann to the Hall of Fame, said he remembers first meeting Neumann when they connected during travels in Japan while both were scouting business opportunities. It was long before Engel began opening its Asian factories.

The then-chairman of Engel, Georg Schwarz, was there, too. Schwarz was Neumann's father-in-law and "introduced us to him as his son-in-law and the man who was now going to head the expansion into Asia," said Hoyt, former executive vice president at screw and barrel maker Xaloy Inc.

Neumann did that, Hoyt said, while figuring out how to also have the company keep its focus on profitably building molding machines in Austria, "which is not the world's cheapest place to be."

"Peter was family, but he was also exceedingly good at running the business to grow it," Hoyt said. "His strength was he took Engel from a pretty small, very competent injection machine builder into a giant."

Neumann became president of Engel Austria, the dominant company within the group, in 1994, and assumed leadership of the group when Georg and Irene Schwarz stepped back from management in 1997. He officially became CEO of the holding company in 2001.

Neumann said he worked to help the company understand the differences in cultures between Europe and Asia and how Engel would have to adapt. He knew he needed to find the right managers for a European company to be successful in Asia.

"Sometimes our thinking doesn't work in [Asia] and we have to understand the issues in the Asian market," Neumann said, pointing to the size, speed and reactions needed in Asian business.

"It's much faster — much, much faster. The dimensions are bigger, and 'no' is not possible," he said. "You can explain whatever you want, why something cannot work, and it's not accepted. You have to find a solution."

Plastics in the environment is another area where Neumann said solutions must be found. It's something he said he sees firsthand on sailing trips.

"If you sail and cut lines and you see water pipes made of plastic swimming around and you sail into it, it's a really big issue," he said. "That's something where you see the negative side of plastic."

Neumann said the industry needs to do more to help people see the positives, while working to solve the waste challenges.

He said the plastics industry in his time has been very innovative: He said the material is important to a high standard of living and for developing new technology in automobiles, medical devices and other areas.

And he pointed to the digital technology and software that companies like Engel integrate into machines today to continually improve their performance, including for better processing of plastic waste. But one of the strengths of plastic — its low cost — is also a big environmental challenge, Neumann said.

"On the one side, there are the positives. But on the other side, the very negative, it's cheap — it's really too cheap," he said. "If it would be like aluminum or whatever, you would start to collect it."

He said industry attitudes were changing during his time as CEO and accelerated after he left. In 2019, Engel signed on to the Ellen MacArthur Foundation's New Plastics Economy project.

"We have to understand the problems of the discussion of plastic, and we have to find solutions so that our world can benefit from plastic," he said. "Plastic is really the material which has so many positive things for our lives."

Neumann said he was drawn to the pace of change and innovation in plastics in his three-plus decades in the industry. He began his career in Germany outside of plastics, working for Siemens in Munich and for a machine tool company, but his father-in-law, Schwarz, suggested he try working for Engel. (Neumann follows him into the Hall of Fame. Schwarz was inducted in 2009.)

At the time Neumann joined, Engel had about 800 employees. Today it has about 6,400 worldwide.

"I think I've always had the idea to be innovative; it didn't matter which field," he said. "I was really good in mathematics and physics, and I really enjoyed the plastics industry because it's such an innovative industry.

"And especially in our field, in machine building, automation systems and so on, there really was in my period big, big changes in all the technologies," he said. "This fascinated me in my career."

Not that there were not periods of difficulty, "some hard stones on the path, which we have to put away," he said.

Neumann pointed to the Asian financial crisis in 1997, the global financial crisis of 2008 and, for Engel specifically, the aftermath of Austria's worst flooding in a century in 2002.

"The most difficult period was after the flooding in 2002 when the main factory and headquarters here in Schwertberg were more or less completely destroyed," he said, with the challenge inside the company being "to motivate people and to say, 'Yes, we will come back as fast as possible.'"

The firm did come back. Engel today is one of the world's largest makers of injection molding machines and systems, with differentiated strategies around the world.

In China, it launched the Wintec brand to be a more cost-effective offering to the market, while in developed countries, it focused on integrating first automation and now Industry 4.0, using software to increasingly digitalize machine operations.

"In Europe and the U.S., we went into automation quite early to bring down the production cost for our customers and as much as possible have integrated automation processes," he said.

"Now with digitalization, you have to again open the world of the machine builder to the software side," he said. "There's always, in different regions and different times, different challenges."

To Neumann, those challenges mean plenty of opportunities for people getting into plastics today.

"There are many, many ways to be creative," he said. "We have these environmental issues. This is a big, big challenge for the plastics industry and here we have to find solutions.

"But also in using plastic for new applications, all the battery technology in the automotive industry and so on," he said. "There are so many fields I would say in the plastics industry where you can be creative and you can push this material to new applications and to new solutions."