The head of Desma's U.S. operations is pleased with what he foresees happening to the machinery maker under its parent company's proposed new owner.
Desma parent Klockner Werke A.G. recently sold controlling interest-subject to regulatory approval-in its business to Salzgitter Mannesmann International GmbH, a German steel firm with sales last year of about $9.3 billion.
That compares to Klockner's sales of about $1.3 billion. Its holdings besides Desma's injection machinery business include Klockner Desma Shoe Machinery; Klockner Hansel Processing; automation specialist Remak; and KHS, a filling and packaging equipment specialist serving the beverage industry.
For Desma, the deal should be nothing but positive, according to Scott Early, president and CEO of Desma's U.S. unit, Desma KDE Sales and Service Inc.
``We see this as great for investments, and we see this as great for owners that have an interest in our business,'' said Early, who discussed the deal during the International Rubber Molding and Silicone conferences, held April 17-18 in Dearborn, Mich. ``We don't see this as a short-term enterprise, and we don't see this as a financial investor who will buy a company and sell it. That's the absolute opposite of what Salzgitter's doing.''
Early, who recently met with Salzgitter management in Germany, said he hopes the German firm's connections in the steel industry will help Desma. Steel currently is the longest lead time for any of the raw materials used in Desma's equipment. ``There is a worldwide shortage,'' he said. ``With Salzgitter being one of the largest steel companies worldwide, one can't help but think that Salzgitter's connections can't hurt us.''
New executive director
Desma's Germany unit-to which Desma's U.S. unit reports-appointed Martin Schuermann executive director effective April 1.
He teams up with Bernd Scholz, with Schuermann handling sales and administration, marketing, and parts and service. Scholz will continue to be responsible for engineering and production, including research and development and quality assurance.
Schuermann has worked in the Klockner organization for the past 18 years and is familiar with capital equipment, previously serving as managing director of the KHS unit in South Africa.
``As we continue to grow and expand into Asia, we realized we needed people to handle different functions of the company,'' Early said.
Outlook for North America
Business is good in the U.S. right now, with the machinery maker offsetting some declines in automotive-related business with nonautomotive sales to the industrial and electrical markets. ``We are a profitable company, and we continue to grow our customer base,'' Early said.
The challenge, he said, is to go to companies and markets that don't traditionally use injection molding machinery because of investment costs. Desma must show these customers that the returns they will see in cycle-time savings and quality improvement will more than compensate for the upfront cost.
Early also sees an uptick in interest and projects in automotive, but thus far that activity hasn't equated to orders.
Desma's U.S. unit also recently took over direct responsibility for sales in Mexico, he said. Previously, the company relied on an agent to sell its machinery there, but now has hired a sales engineer and a service engineer to handle the business.
Desma's Mexican effort will be based at a sales and service facility located at a current Klockner location in Mexico. ``We see Mexico as an opportunity,'' Early said. ``It gives us an instant ability to be very aggressive and active in the market.''