VDMA German tool and mould makers exceed expectations
Germany - ETMM editor Barbara Schulz met up with Markus Heseding, managing director of the Precision Tools Association within the German Engineering Association VDMA, to discuss how the local tool and mould sector is currently faring and what to expect in 2015.
ETMM: Mr Heseding, after about 1.5 years on the job, what is your résumé?
Heseding: I’ve meanwhile visited many different companies in the precision tools industry and I was pleasantly surprised to find highly innovative, clean, bright, lean and well laid out workshops. Underpinning everything these companies do is a strong commitment to both excellence and continuous improvement, as well as an ethos based on co-operation and a shared desire to offer customers the best products and service. Education and training is also on a high level.
ETMM: Germany’s precision tools industry added more evidence that the upswing in Europe is underway. Production is expected to rise 3% this year. How is the outlook for the tool and mould making sector?
Heseding: Based on available data for 2014, the tool and mould making sector has exceeded the record level of the previous year, producing tools and moulds worth approx. €4.7bn. In total, turnover rose 5% compared to 2013. Driving force for this positive development were the automotive and mechanical engineering sectors. However, they did not develop in line with each other. While the latter only experienced a growth of 1% last year, Germany's automotive industry produced more cars than in 2013 (+4%). This positive development as well as a high variety of models further pushed the domestic demand for tools and moulds.
Medical, packaging industries strong
ETMM: Are there any other industries showing strong growth?
Heseding: Yes, the medical and packaging industries are certainly performing strongly at the moment with a healthy demand for moulds.
ETMM: What do you expect for 2015?
Heseding: For the current year we expect growth figures in the same ballpark as last year.
ETMM: Manufacturing in the US is resurging. How is this market developing for local tool and mould makers and are there any other emerging markets?
Heseding: The US are still the number one export market, although exports did not reach the exorbitant 2013 results. Production and investment levels remained high, resulting in strong demand for tools. The Czech Republic has for the first time knocked China from the second position. In China, demand decreased and growth of investment slowed down. Other top export markets include the UK, Spain, Switzerland, Mexico and Poland.
ETMM: How are the developments in Europe?
Heseding: In Europe the situation is positive with increasing demand for tools from almost all important neighbouring countries, albeit at different rates. While Spain, the UK and Hungary provided significant contributions to growth, Poland and France only moved moderately, but in the right direction. An exception were sales to Switzerland, which remained unchanged in 2014, but monetary policy could provide a positive stimulus for the German toolmaking industry in 2015.
ETMM: How did domestic demand in Germany perform last year?
Heseding: German demand for tools and moulds from abroad increased only moderately in 2014 (3%), but the largest supplier to this industry, China, further expanded its leading position with an increase of 10%.
ETMM: The Russian market has very challenging long-term prospects. As a result, GM decided to pull its Opel brand out of Russia and mothball its St Petersburg factory by the middle of the year. What effects does the crisis have for the German precision tools sector?
Heseding: Exports to Russia already decreased by one third last year. Even though Russia and the Ukraine absorb only a small part of the German precision tool exports, there are individual tool and die makers, particularly in eastern Germany, who are affected by the crisis.
ETMM: What are the current challenges for tool and mould makers despite these positive sales figures and future prospects?
Heseding: Poor payment practices, i.e. long payment terms, are a huge challenge for many SMEs in this industry. Moulds can be very complex and hence expensive, so for small companies long payment terms can be very challenging. Automation is another topic and trend in the tool and mould industry. While it is getting harder and harder to find skilled staff, automating processes is a promising strategic option.
Fighting skills shortage
ETMM: So finding skilled staff is still an issue. What is the VDMA doing to support its members and industry to find qualified professionals and apprentices?
Heseding: Of course, qualified junior staff is a topic that preoccupies not only our sector. The VDMA has different initiatives to fight the skills shortage in the areas of mechanical and electrical engineering. For instance, the Machine House competition is an initiative for successful students, motivating universities to develop and implement ideas to continue their efforts to enhance the quality of education and academic success. A different initiative is our new apprentice campaign, where current apprentices help to recruit new trainees and apprentices. VDMA’s talentmaschine.de serves as a perfect information platform for internship, apprenticeship and integrated degree programs. The “MEX-Bildung 4.0” at the upcoming Moulding-Expo will also be exciting.
ETMM: Can you explain this concept a bit further?
Heseding: All four partner associations [VDMA, VDW, MF and VDWF] have contributed with a great deal of commitment in order to drive training in tool, pattern and mould making. Visitors can interact, gain information and enjoy exciting entertainment relating to the training professions in this sector. Companies, institutions and initiatives present a new view of the current professional fields and qualifications of this future industry.
ETMM: What do you expect from the inaugural Moulding-Expo, which will be staged in Stuttgart, Germany, from 5 to 8 May 2015?
Heseding: As a supporting partner organisation we expect the show to be not only the place to be for tool and mould makers, but also for international customers and decision-makers. Moulding-Expo needs to be an international show, and the high exhibitor numbers indicate that the organisers are on the right track to achieve this goal. The Control show running parallel will generate additional visitor numbers, covering quality management and high-level measuring technology topics.