Breakthrough in internationalization of German small and medium machine tool companies

According to the latest data from the German Machine Tool Manufacturers Association ("VDW"), in the first two quarters of this year, the two most important markets for the German machine tool industry's exports - China and the United States - underperformed, with export volumes falling by 8% and 20% respectively. . Among them, China's new machine tool orders fell by 14% this year. The third-ranked Russian market unexpectedly increased its export value by 14% this year, but VDW explained that the market growth mainly relied on past orders. In fact, due to the situation in Ukraine, in the first two quarters of this year, new orders for machine tools in the Russian market have fallen by 40%. Currently, in the key overseas markets, only the United States shows a high growth momentum.

Although VDW is optimistic about the situation throughout the year, for the German industry with a high degree of matching in the industry chain, it is impossible to ignore the cooling of overseas markets.

Germany exports motor vehicles to drive the export of machine tools; through export machine tools, it drives the export of tools, air purification, sensors and other products; through the export of cutting tools, it also drives the export of cutting tool machines. At key moments when human lifestyles have undergone tremendous changes, it has seized opportunities to form high-quality production capabilities. Through the export of several key products, it has driven the export of industrial products throughout the country. This has brought inspiration to developing countries.

However, in the face of increasingly severe market competition, German SMEs deliberately away from the intrusion of financial capital are still adhering to the family business management system in the spirit of "artisan." This private economy resists capital, and the German model of SMEs supporting the economy will continue in the international market.

Proficient in market segmentation “It is very difficult to process this 6-sided shape,” Harald Haug, director of the export division of Paul Horn, a German precision tool company, told reporters on September 19.

Paul Horn exhibited this solution at the "2014 Stuttgart International Metal Processing Exhibition" ("AMB"). In fact, there are many processes that can process hexagonal shapes, and Paul Horn's designed solution is to increase production efficiency. It seems to be just a small innovation in the processing of parts, but it is precisely such a small innovation that supports the German industry to maintain its advanced nature. German SMEs attach particular importance to similar technological innovations. Germany's annual technological innovation investment is mostly achieved through such SMEs.

Paul Horn is located in Tübingen, Germany, with an annual turnover of approximately 250 million Euros and 1,200 employees worldwide. Like many German companies, Paul Horn is not the largest company in the industry, but it will have an astonishing market position once it enters the industrial segment. Paul Horn has the most comprehensive product range in the lathes and milling cutters.

"Our company is not big, but we don't have many things in the world." Stefan Brand, general manager of Vollmer Group, a German tool and machine tool company, told reporters, "This is where we are proud."

Vollmer's technology is focused on grinding machines and EDM machines in cutting tool machines. The former has a market share of about 70%, the latter has a market share of about 90%, and the wood cutting circular saw industry has a market share of 98%. All the relevant tool manufacturers in the world will purchase Vollmer's products, and the corresponding company's turnover is about 100 million euros.

"This is a characteristic of German SMEs. Although it is small in scale, it has sufficient innovation capacity to provide support for the development of large companies," said Stefan Brand.

Due to the fact that German SMEs have technical advantages that are difficult to replace in these market segments, as the German automotive industry moves toward the world, machine tools, metal processing, sensors, air purifiers, and even exhibition companies have also gone overseas. The AMB Stuttgart exhibition company, which is organizing AMB, is preparing its AMB China exhibition to be held in Nanjing in mid-October. The company’s sources told reporters that with the development of Chinese industry, China needs both the introduction of internationally advanced equipment and the need to go global, resulting in a demand for specialized exhibitions. The experience of many years of organizing AMB has enabled Stuttgart’s exhibition company to seize it. This opportunity.

Keller Company is a manufacturer of air purification equipment in the metal processing industry. It has technical advantages in separating explosive dust and viscous dust. It firstly went to the international market to export German machine tool products together, and lacked marketing capabilities abroad. The company’s president, Hoster Keller, told reporters that Keller will assemble products in China and fight for customers.

Focus more than utilitarian Harald Haug had previously worked for a listed company in the same industry, and Paul Horn was a family business. In his eyes, the family business has the advantage that the listed company does not have, that is, focus and warmth.

“There is a family atmosphere here, which is totally different from a listed company,” Harald Haug said.

Many of the German companies visited by the reporter still adhered to the family-style business model and were somewhat repellent to the capital market. This kind of exclusion is not about worrying about power, but rather worrying that the company will be dazzled by profits and give up the technical advantages accumulated over many years. It is because of the nature of their family businesses that these companies are reluctant to lay off employees or transform in the midst of a crisis, but rather cherish their employees and the family's 100-year foundation.

Founded in 1909, the Vollmer Group experienced two world wars and was rebuilt two times in ruins. During the financial crisis of 2008, some people had advised the second generation leader of the group, Heinrich Vollmer, to lay off the staff, but she rejected the proposal. She said that my father had rebuilt the company twice in such difficult times. This time we still persisted in the past. In the end, the group’s shareholders accepted losses without layoffs.

"The economic crisis is temporary, but these skilled employees will not return once they are gone," said Stefan Brand, general manager of the Vollmer Group.

Although StefanBrand is already a manager, he still often goes to the development department to understand product development. "I like to go to the development department to listen to them talk about technology," said StefanBrand, "I would think after listening to the company, we must not let this company go public. If the financial and financial people understand that our technical development is so difficult, the profits are not Gao will certainly sell the company."

After more and more extensive participation in the international market, German SMEs are also seeking to adjust to adapt to international competition, but they are reluctant to give up on the family business system. “We are also introducing the management experience of modern companies, but we are always a family business.” Harald Haug said.

The world-famous sensor manufacturer Balluff has 9 production bases worldwide, of which the Chengdu base is the second largest base in the world. MichaelUnger, CEO of Balluff, told reporters that increasing global customers, increasing demand, growth of local competitors, and policy constraints have created challenges for the internationalization of companies.

“Family companies can well control the company's direction and capital flow,” said MichaelUnger. “This is an advantage of the family business. It is not driven by the capital market and only focuses on short-term performance.”

Eighty percent of Vollmer Group's shares have now been transferred to a foundation that has no legal family business. StefanBrand said that despite this, Vollmer will continue the family-style management, which is the Vollmer family's requirements for the foundation.

"In my eyes, this is still a Vollmer family business," said StefanBrand.