Arburg sales down $133 million, but mood still up

The brisk sales of injection molding machines driven by the medical needs of the pandemic and locked-down consumers shopping online started waning in 2022 and continue to slide.

Machine sales are down not only in comparison with the phenomenal years of 2021 and 2022 but also because high energy prices are reducing the appetite for investments, according to Gerhard Böhm, managing director of sales and after sales for Arburg GmbH + Co. K.G.

Capital expenditures have been limited to new projects starting up and essential capacity expansions, sending incoming orders into further decline.

"Currently, these are at a low level. Unfortunately, no clear, short-term improvement of the situation is in sight yet," Jürgen Boll, managing director of finance, controlling and IT, said during a news conference at Fakuma 2023.

Boll said the 100-year-old company generated "really magnificent" sales of 875 million euros ($932 million) in 2022, but this year he expects a decrease to 750 million euros ($800 million).

The Lossburg, Germany-based machine builder isn't alone.

"At the moment, we are facing a challenging situation due to the significant decline in incoming orders—like all other companies in the industry," Boll said.

Sales are down in Germany, where "people are always particularly cautious," and the rest of Europe except for Italy, Poland and Turkey, which are somewhat "better off" in comparison, Böhm said.

The Asian market also is weak and even the "previously very stable U.S. market" dipped in 2023.

"It also seems that at least a small recovery is in sight there," Böhm said of the U.S. market.

For now, Arburg sales have fallen off "quite similarly" across all regions.

"Europe doesn't stand out as worse than other regions," he said.

Other industries also are affected, Böhm added. The mobility industry and automotive industry are in a state of flux. The electronics and packaging industries are noticing a drop in demand from the consumer sector, and the medical market has quieted down.

Despite the sales decline, Arburg has been investing in technology, facilities and personnel in what Boll described as "a counter-cyclical and future-oriented manner."

In 2023, Arburg added welding robots, a large-scale 3D measuring machine and 3D scanner, five new machining centers, a driverless transport system and hundreds of employees.

Arburg has some 3,800 employees, which is about 6 percent more than a year ago.

During the slowdown, some staff are using time off and others are doing short work. Their hours will be increased proportionally to sales.

"Arburg would not be Arburg if we were not looking ahead positively to the future despite the difficult environment," Boll said.

Fakuma 2023 marks a quiet end to a year of celebrating the 100th anniversary of Hehl family ownership. Anniversary events "assumed extraordinary dimensions," said Michael Hehl, a managing partner, and it raised some questions.

"On occasion we have been asked whether this fits in with our oft-quoted premise of 'substance over style' and proverbial Swabian thrift," Hehl said. "The answer is quite simple: Swabian thrift is not to be confused with stinginess. Rather, it is about economical, responsible and sensible use of resources. Above all, we also wanted to issue a clear signal of the high esteem in which we hold customers, partners and employees of the worldwide Arburg family. And I think we have succeeded in doing that quite well."

The milestones reached over the last 100 years show Arburg continues to face and solve challenges. "This extraordinary ability to find solutions is therefore part of our company's DNA," Hehl said.

Looking ahead, Arburg shall remain an independent, family-owned business, and company officials are setting that course.

"In the future, there will be an advisory board consisting of members of the partner families and external members," Hehl said. "Needless to say, partners shall continue to play an active role as managing partners in the executive management of this company."

This board is currently in its formative stages. Managing Partner Renate Keinath is leaving, and other partners will remain while the next generation prepares to take over.

"They seem to be willing to follow after us," Hehl said, adding the advisory board will be the body that makes final decisions.

"In this way, we will continue to be a strong and reliable partner for the next 100 years," Hehl said.

Arburg introduced its second size of the hybrid Allrounder, a 520-ton press, at Fakuma 2023, taking an important step forward, according to Guido Frohnhaus, managing director of technology and engineering.

"Anyone who assumes that Arburg is making 'hybrid' because we can't do 'electric' is barking up the wrong tree," he said. "With our hybrid technology, customers have the opportunity—and, if I may add, a chance that is currently unique on the market as far as we know—of buying a premium machine that combines the advantages of both drive technologies."

Electrical precision and energy efficiency plus hydraulic dynamics result in a favorable price, Frohnhaus added.

"Ultimately, the new hybrid machines significantly reduce acquisition and operating costs and the carbon footprint," Frohnhaus said, noting there are 11 Allrounders at Fakuma 2023.