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Buhler and JSW - successful together

30.03.2009 Japan Steel Works (JSW) possesses the necessary knowledge of the Japanese market for die casting systems. Buhler contributes its technological expertise and decades of experience: The Japanese joint venture JSW & Buhler Machinery Ltd., which was launched last summer, has got off to a successful start. Japan is one of the world’s largest die casting markets, thanks to its automobile industry. Alone in 2007, 1170 machines worth a total of 46 billion yen were sold in the country. The Japanese industry register shows some 600 large and small die casting foundries, of which about 100 are potential Buhler customers. But to date, Buhler has never really managed to penetrate the Japanese market. “Buhler Die Casting is successfully active throughout the world,” says Leo Iten, Sales Manager Asia of the Buhler Die Casting division. “But in Japan, we have had trouble entering the market. The reason is not that we lack the proven products or the technological expertise required for a successful entry, but the knowledge of the peculiarities of the Japanese marketplace.”

Open to new ideas
You might consider it fate that also Japan Steel Works was thinking about markets and technologies. Leo Iten: “The top management of JSW entrusted Kazuo Kitamura, the head of the Magnesium division of JSW, with finding a partner with high capabilities in die casting technology for building a complementary business field.” The Magnesium division of JSW produces manufacturing systems for making magnesium components for the electronics industry. In this, JSW utilizes the thixomolding process, which is related to the die casting process. When Kazuo Kitamura visited a trade show in China in 2006 and contacted the people from Buhler, he found that they were open to new ideas. A jointly conducted study showed that JSW and Buhler match perfectly like two pieces of a jigsaw puzzle. “JSW holds an excellent market position as a machine builder,” says Leo Iten. “And in the eyes of JSW, we at Buhler have the matching technology and the process expertise to enter the country’s die casting market and thus to gain access to its automotive industry.”

Step by step toward the joint venture
In the course of negotiations, it became increasingly apparent that a collaboration between Buhler and JSW was considered as a “lucky chance” by both parties. “We agreed to proceed step by step,” explains Leo Iten in retrospect, who conducted the negotiations for the Buhler Die Casting division. “We gradually got closer. We soon found that a joint venture was the best option for a common future.” In a first step, the two parties signed a memorandum of understanding, which included an agency contract as a transition to the joint venture. The market’s response to the publication of this preliminary contract was very encouraging. Leo Iten: “The large players in the foundry business congratulated us, and the competition was shocked.” No major difficulties were encountered in detailing the joint venture contract. Each of the partners was to hold a fifty percent stake in the new joint company named JSW & Buhler Machinery Ltd. “Such a solution is only possible if the relationship between the two partners is marked by undivided trust,” says Leo Iten. “The same attitude is reflected in the fact that the contracts have been designed with the long term in mind and that no probationary period has been agreed upon. We are confident that we are a perfect fit. It is so to speak a love match.”

Merging of two cultures
The joint venture contract was signed in the summer of 2008. According to the contract, the purpose of the jointly owned company is the “manufacture and sale and maintenance of cold-chamber die casting machines.” The joint venture provides for the creation of a sales, administration, and service organization in Tokyo. This organization sells plant and equipment of both JSW and Buhler. The agreement also stipulates that JSW shall allow the production of cold-chamber die casting systems in Hiroshima which are based on the new Buhler two-platen technology and which have locking forces ranging from 840 to 4400 kN. Both projects have already been put into practice. The new company JSW & Buhler Machinery Ltd. employs a small team of four. It is headed by Kazuo Kitamura. At the Buhler Die Casting division in Uzwil, Ulrich Wiedmer looks after the interests of the young joint venture. He also acts as the interface between the engineers of the two parent companies. “We must never forget that two cultures have merged here, with differences in mentality and values,” explains Wiedmer, who has worked for several years with Buhler in Yokohama and speaks Japanese. “We must also adjust our drawings and blueprints to the Japanese standards.”

Technology Center in Hiroshima
As an important step toward the penetration of the Japanese market, JSW & Buhler Machinery Ltd. opened a Technology Center in Hiroshima in November 2008. It is equipped with three die casting machines: an Evolution 84D with a locking force of 840 kN, a Carat 130 with 1300 kN, and a Carat 130 XL. The XL has a platen size specifically tailored to the needs of the Japanese market. This new technical center of competence at JSW’s factory in Hiroshima serves as a test and training center. Leo Iten: “The machines installed in the Technology Center enable us to demonstrate our technological capabilities to our customers. Once a customer has purchased a production system, we can offer all the necessary employee training here in the Technology Center in Hiroshima.” In addition, these systems allow customers to conduct trial runs and tests. “Customers take along their own dies to test our manufacturing systems,” continues Iten. “This enables them to make direct comparisons with the products that they have manufactured on their own existing systems.” The interest in the Technology Center of JSW & Buhler Machinery Ltd. in Hiroshima is very encouraging. Ulrich Wiedmer: “Many of the major die casting companies attended the official opening ceremony. And the first test series have already been booked.”

Appearance at the first trade show
What was also very encouraging was the result of the first appearance of the new joint venture between Japan Steel Works and Buhler at the Japan Diecasting Congress & Exhibition held in Yokohama in early November. “Our first joint appearance attracted very much attention,” says Leo Iten, describing the experience. “The interest of the Japanese specialist public in our new Japanese company is a far cry from that of our appearances in Europe over the past years.” During the three-day trade show, the JSW & Buhler Machinery Ltd. team registered no less than 420 booth visitors from over 100 companies along with their names and addresses, including all the large industry players. “With our presence at the exhibition in Yokohama, our team was able to introduce itself to the industry and, in an initial step, to establish important contacts,” says Ulrich Wiedmer enthusiastically about this success.

Optimistic despite the crisis
The people in charge at JSW and Buhler are aware of the fact that the global economic crisis is a true touchstone for the young joint venture. The short-term outlook is not very bright. Die casting system sales plunged 50 percent in Japan in the second half of 2008. And the downward trend continues. But despite this situation – or precisely because of it – JSW & Buhler Machinery Ltd. is guardedly optimistic. Leo Iten: “The current market situation may also turn out to be an advantage for us. As the technological market leaders, we have a good basic position. After all, our customers will have to invest in new production technologies in the fierce struggle for the reduced order volumes still available in the very tough die casting market. When the goal is not only to replace obsolete machinery, but also to invest in production systems offering cutting edge technology and thus to gain a genuine production advantage, our products enjoy a position second to none.”

<p class=The new Technology Center in Hiroshima aroused lively interest during the official opening.

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The new Technology Center in Hiroshima aroused lively interest during the official opening.