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Exhibitors coming to AMB 2014 in a good mood despite the sanctions against Russia
Russia is currently the predominant topic in politics and industry. The sanctions recently imposed by the EU will not only have impacts on the Russian economy. The German Engineering Federation (VDMA) is afraid of repercussions for the German and European economy, especially if Russia decides to impose counter-sanctions. However, the Association of German Machine Tool Manufacturers (VDV) in Frankfurt stresses that the majority of machine tool manufacturers are looking to the future with great confidence. Manufacturers of precision tools will also be in a good mood when they arrive at AMB, International Exhibition for Metal Working, which is being held in Stuttgart from 16 to 20 September 2014. They are still maintaining their optimistic growth forecasts from the start of the year. They are all hoping that AMB will provide positive signals and suggestions on how flagging business with Russia can at least be offset.
"Still doing well"
According to the VDW, the majority of manufacturers of machine tools and precision tools do not appear to have been seriously affected so far by the slump in exports. Managing Director Dr. Wilfried Schäfer: "On average, the industry is still doing well at present; our prediction of a growth in production of around 3 per cent appears to have already been assured in the light of the orders on hand in the middle of the year." According to Dr. Schäfer, 2013 was a good year for the machine tool industry while 2014 will provide it with further impetus. Dr. Schäfer says that this robustness is due to the fact that the industry had done its homework in the last few months: "Our companies performed some excellent work and made further developments in order to remain competitive on the world market." However, the VDW is also not ignoring reality: "Despite all the successful reports, it should be recognised that the smouldering conflict with Russia may continuously cause the industry problems whose extent we still cannot evaluate at present."
Dr. Wilfried Schäfer
The VDW had certainly not noticed any slowdown registered by the German Engineering Federation at the start of the year. The number of orders received in the first quarter of 2014 rose by 10 per cent compared with the corresponding quarter in 2013. This was primarily due to strong domestic demand which actually increased by a resounding 20 per cent - the result of a clearing investment backlog. However, the number of foreign orders also grew by 5 per cent. Dr. Schäfer is therefore anticipating a good response from German customers, in particular, at the forthcoming AMB. "It would be important for us to see a sign that there is a willingness to invest in the different customer industries and that companies will be able to conclude as many sales transactions as possible during the exhibition." Dr. Schäfer says that AMB is an ideal platform to showcase future-oriented developments, for example in the area of energy efficiency or networking of machines in the industrial environment, and therefore provide fresh momentum. "In future, the industry will also only be able to maintain its leading position in the world through further innovations coupled with excellent quality and close attention to good service."
Western Europe clearing the investment backlog
The representatives of the Precision Tools Association in the German Engineering Federation are also sticking by the forecasts made at the start of the year, as stated by its spokesman Alfred Graf Zedtwitz in response to an inquiry: "We are still expecting a 4 per cent rise in turnover and production." Lothar Horn, Chairman of the Precision Tools Association and Managing Director of Hartmetall-Werkzeugfabrik Paul Horn GmbH, Tübingen, also attributes this to the clearing investment backlog although 2013 was at the highest level ever for the second year in succession. Horn bases his positive outlook for the current year on production increases in the two most important industries, i.e. mechanical engineering and the automotive industry.
Right at the start of the year, the Precision Tools Association Chairman Horn referred to impetus from the recovering neighbouring countries in Western Europe. His thesis is now substantiated, for example, by the United Kingdom. As just announced by the Economist Intelligence Unit (EIU), the British economy, which had been ailing for many years, recently enjoyed strong growth again. According to the EIU, GDP is expected to rise this year by 3.1 per cent compared with 1.7 per cent in 2013. The German-British Chamber of Industry and Commerce (AHK UK) estimates that this is especially pleasing for the German mechanical engineering industry. The German British Chamber of Industry and Commerce justifies its optimism on the much lower level of automation in the United Kingdom. German companies, in particular, could help British companies to catch up in this area. Tax reductions for company settlements and grants for research and developments were additional incentives. Depreciation opportunities for investments in machines and equipment were also improved. According to Germany Trade & Invest (GTAI), British companies are therefore intending to invest more money in equipment and production machinery in 2014 and 2015. The upturn is primarily due to the again booming automotive industry, one of the most important sales markets for mechanical engineering.
DMG Mori Seiki AG, the industry leader which has just published its half-yearly figures, remained right on target despite the Russia crisis and other imponderables. Incoming orders and turnover of the Bielefeld-based company therefore rose by 13 and 6 per cent respectively. The increases from domestic orders exceeded those from abroad, thus confirming the thesis of the strong domestic market. Rüdiger Kapitza, Chairman of the Board of Management, is also expecting favourable general conditions in the global economy throughout 2014: "The currently stable economic development in Germany, the improved economic situation in Europe and stable growth dynamics in the USA should also have positive impacts on our results."
Possible losses in Russia will be compensated by developing smaller markets such as Hungary, Vietnam, the Philippines, Romania or Venezuela in cooperation with the partner Mori Seiki. In the second half of the year as a whole, Kapitza is even anticipating a recovery in business. He is expecting "strong momentum for incoming orders from the autumn exhibitions and technology trade fairs", including AMB (Hall 7, 7A01) in Stuttgart, "where we will present ten world premières together with our cooperation partners."
On an exhibition area of more than 2,000 square metres, the world market leader DMG Mori will present a representative spectrum of integrated production solutions from a single source – from a machine-integrated solution and flexible manufacturing cells and systems through to turnkey projects for mass production of engine components in the automotive industry. The company will exhibit a total of 46 high-tech machines - all with the new DMG Mori design, 29 of which with CELOS. The CELOS APPs make it easier for users to continuously manage, document and visualise order, process and machine data. CELOS is therefore becoming a key element for networked, intelligent production and is a major step towards Industry 4.0.
DMG Mori will present three world premières as a special highlight at AMB, i.e. the new vertical machining centre DMC 1450 V, the 4th generation of the 5-axis universal machine DMU 125 P duoBLOCK® and the LASERTEC 45 Shape for high-precision 3-D laser material removal and texturing in new dimensions.
Service becoming increasingly more important for business
The AMB exhibitor Haas Automation Europe, an American machine tool manufacturer with a European branch in Brussels, is also in a positive mood. In the first six months of the year, the company´s turnover jumped by 30 per cent compared with the same period in 2013. It was therefore well above the growth rate of 2 per cent predicted by CECIMO, the European Association of Machine Tool Industries. Jens Thing, who has held the post of European Managing Director since spring, also attributes the unusual success to the 37 factory outlets in Europe: "Our customers appreciate the fact that the products and support provided by Haas correspond precisely to their expectations in regard to value, performance and reliability. This applies all the more since they are able to purchase machines from large domestic suppliers." Haas is planning to double its turnover to $2 billion in the next few years. Europe will play the most important role in this case.
"During AMB we want to show that our technology in conjunction with special services can help companies to achieve a maximum return from their investment with a minimum risk," said Bert Maes, Marketing Manager at Haas. According to Maes, the availability and prices of spare parts are often underestimated, but very important factors on the machine tool market. He says that although other companies offer machine tools at similar prices, customer service is often limited and unreliable. Haas currently operates 170 fully equipped spare parts centres all over the world.
99 per cent of the required spare parts can actually be delivered on the order day by local service vehicles - at moderate prices for the parts and delivery service. Bert Maes: "It is also fairly unique to offer customers full access to their own data so that they can personally carry out maintenance work and troubleshooting. Another main component of the Web-based customer service system is a large library of video instructions. Using the portal, spare parts can also be found and ordered within minutes. Bert Maes: "This information helps customers to carry out repairs and rectify faults, thus increasing their profitability."
VDMA study shows strengths and provides recommendations
Haas also regards this strategy as conforming to the study entitled "Future prospects of the German mechanical engineering industry", which was recently published by the German Engineering Federation. The study was conducted in collaboration with the management consulting firm McKinsey & Company. 333 companies of all sizes took part in the study. Ten success patterns were revealed during the study. For some companies, success is due to size, innovative capacity and internationalisation, but also concentration on core business and operative excellence. Other companies profit from their specific advantages as providers of solutions or components, a premium position or successful after-sales and service business.
"With an average EBIT margin above 6 per cent in 2012 and an annual increase in turnover of more than 2 per cent since 1995, the mechanical engineering and plant construction industry symbolises German economic power," said VDMA President Dr. Reinhold Festge during the presentation of the study in Frankfurt. However, the competitive conditions are changing: in particular, "low-cost suppliers" with improved quality have intensified competition in industries in which the quality symbol ´Made in Germany‘ is still the benchmark. This is leading to a kind of balancing act because customers also increasingly demanded individual system solutions. According to the study, almost three quarters of the surveyed companies report rising demand for customised system and integration solutions. 70 per cent of companies believe that demand will move to countries outside Europe in the long term. 60 per cent regard after-sales and service as important future topics. The majority of companies in the German mechanical engineering and plant construction industry think that they are well-prepared to cope with all trends. It is therefore not surprising that they regard the developments more as an opportunity than a risk.
However, almost half of the companies expect the advantages and disadvantages of Germany as an industrial location to have a bigger impact than ever in future on the profitability and growth of mechanical engineering and plant construction companies.
The study not only reflects the status quo, but deduces six action areas for the future. The study states that attempts have been made to combine the determined success factors. For example, companies should react to the relocation of export markets by pursuing a "purposeful internationalisation and growth strategy with a business model matching the particular situation". The extension of after-sales and service business can be boosted by integrated solutions and an optimised service network strategy. Further standardisation and modularisation will help to bridge the gap between price-sensitive customers and also customers who attach importance to individual solutions. The value of a company´s products and portfolio can be optimised by customer value-oriented innovation and a continuous reduction in product costs. In order to maintain the quality and productivity advantages of Germany as an industrial location, efforts must be made to achieve excellent domestic value-added. New technologies such as Industry 4.0 will help in this respect. Finally, companies should pay attention to "stringent, risk-differentiated project management in solution business" in order to protect their margins. Exhibitors at AMB 2014 and their visitors will therefore have plenty to talk about during the exhibition.
More than 90,000 trade visitors and around 1,300 exhibitors are expected to attend AMB 2014 from 16 to 20 September 2014. Exhibitors will present innovations and further developments from the metal cutting and precision tool industry, as well as chucking tools, CAD, CAM, CAE, software, grinding machines, handling of workpieces and tools, and measuring systems on a gross exhibition area of more than 105,000 square metres.
AMB 2014 will be backed by the promotional supporters, i.e. the VDMA Precision Tools Association, the VDMA Software Association and the Association of German Machine Tool Manufacturers (VDW).
