Injection press supplier Demag Plastics Group, newly cut loose from its sister companies in Mannesmann Plastics Machinery GmbH, is in the midst of a major restructuring.
The changes are designed to revitalize the machinery builder, sharpen its focus and make it more competitive. They include shifting more manufacturing to Asia and a revamped, simplified product range, according to President and Chief Executive Officer Klaus Erkes.
In a critical review of the company’s state two years ago, Erkes pointed to what was a globally fragmented, unfocused organization trying to be a full-line press supplier of every machine size to all markets around the world. There was resource duplication in manufacturing plants, and a decentralized international structure.
Outlining Demag’s new strategy, Erkes said: “We want to be the global leading toggle injection machine expert. We want to deliver small to midsized [up to 2,000 metric-ton] hydraulic and electric toggle injection machines of [the] highest quality, efficiency and reliability for a fair market price in every region of the world.”
Amid all the changes, one question went unanswered. Asked about the future ownership of Demag, which is held by Chicago-based private equity group Madison Capital Partners, Erkes remained enigmatic.
“No engagement of a private equity firm is forever, so you can interpret that for yourselves,” he told journalists at a July 4-5 open house in Schwaig.
The event came less than a week after Demag’s bombshell announcement that it will stop making presses at its Strongsville, Ohio, plant by Aug. 28. The firm blamed a sharp downturn in the U.S. market — which has fallen from 7,500 presses annually to 3,200 over five years — and the plant’s over-reliance on production of hydraulic presses, where electric machines now account for around half the market.
Injection press supplier