Pre K2013: Engel achieves record EUR145 m sales in Asia

Nothing was going to put a damper on the pre-K2013 press conference organised by Austria-based injection moulding machinery maker Engel on 3 June at its plant in Schwertberg, not even the rain! With 2 months of rain over two days, the Danube river flooded parts of the country.

CEO Peter Neumann, welcomed the journalists stating, “You journalists are brave to have attended, even with the announcements of the flooding!” But he pointed out that the peak was over and that the flood waters had subsidised. He also compared it to 11 years ago when the Engel facility in Schwertberg was damaged as a result of severe flooding. “We have a dam built around the facility to channel the flood waters so the facility is not affected.”

Speaking about the company’s business, Neumann said it had recovered faster than expected over 2010/11 period. “It is surprising even for us. The global turnover of EUR950 million this financial year (2012/2013), will be the best ever in Engel’s history.” He also said that two years ago, the management envisaged the recovery to reach EUR600, “and we would have been happy if we had but we have done better.” He attributed the better performance to the fact that the global plastics industry’s move to a more higher technology, where Engel is in.

Asia, a growth market

Other factors were the firm’s Asian presence that has helped with the growth. Though Europe is still the company’s main market, where 65% of the turnover is generated, Asia comes second at 18%, followed by the US at 17%. “In the long term, we have to grow in Asia as it is a long term growth market.”

In Asia, the firm generated a turnover of EUR145 million, also a new record for the company. The largest share of this amount was produced in China, which is the world’s biggest market for injection moulding machines. And though Neumann said that the total sales volume actually decreased in China last year, the high-tech segment grew again, stressing that China will still be the most important market in Asia in the future. “The market for simple low tech machines is shrinking in China, while the demand for sophisticated high-tech machines is growing.”

Meanwhile, the markets in Southeast Asia are also expanding rapidly, particularly in Thailand and Indonesia, he said, adding that Engel has been able to triple its turnover over the last two years, despite a weak 2012/2013.

Business units – packaging and medical growth sectors

Neumann’s presentation also focused on customer intimacy and its closeness to customers and the five business units focused on teletronics, automotive, packaging, electronics and medical. “Sustainability is important as is service so that a customer doesn’t feel different if he is investing in Europe or in any part of the world. We have run this strategy for many years and are quite successful in this mission.”

The proudly family owned business is now moving to another level and Neumann introduced a new addition to the business, the fourth generation family member, Stefan Engleder, CTO.

He also emphasised again that the company is independent from outside forces and is able to overcome the problems and crisis without any interventions and has the freedom to make its decisions. “We do not have to depend on payback periods. The injection moulding machine business is long-term; from R&D to fruition of technology it takes a long time so compared to companies owned by financial investors, which are subject to investors’ decisions, we are different. Plus, customers are used to seeing the same faces because the management has been the same, we may look a little older but we still have the same faces!”

With eight facilities, 29 subsidiaries and 60 agents, 95% of sales is through Engel employees; strong relationship with customers. Its plants are all over the world in Austria, US and Asia; focusing on specific machines with robots in the UK and in China and Korea on large and small machines respectively.

Since the last K in 2010, the firm has not only in capacity but also in technology. For instance at Schwetberg, it invested EUR23 million; St Valentin, EUR15 million, while in Shanghai, it doubled capacity for its big machines (EUR12 million investment) and in Korea, it is able to produce 1,000 machines (EUR8 million investment). In Stuttgart, it set up Technology Forum.

In terms of new machinery at the K show, the firm will introduce the all-electric tiebarless Emotion TL and the E-speed for packaging applications.

Neumann concluded his presentation by saying that he doesn’t see expect much growth in the plastics machinery. “The US is still doing well, and will help a little bit and we expect good business; Asia not growth in numbers of machines but higher technology and we hope this will help Engel in its product portfolio. We expect stable growth over the next few years as our technology is still ahead of the competition.”


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