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Inside Germany -- Volker Feyerabend
Foregoing the Crystal Ball: KSL Chases a Diversified Market

By Volker Feyerabend

—Posted: 09/01/2003

There will never be complete certainty about the best business strategy, optimal location or investment timing and appropriation. Such assessments, by nature, involve making projections about markets, the economy, and geopolitical developments. As such, managers have no choice but to make forecasts without a crystal ball. Instead, companies must rely on their own experience and knowledge. However, it also pays to consider how other companies mastered similar challenges and pro-actively drive changes.

The world's economy seems to be slowing recovering, but the short-term fact is that a number of insolvencies continue to take their toll on Europe, Japan and the U.S. But there is hope. In my March column, I talked about companies that manage to be successful even as others fail. One such company, KSL Kuttler Automation Systems, seems to be defying the odds by establishing itself in Asia, while not neglecting its traditional customers.

Presently, this maker of handling systems and wet process equipment has 225 employees (100 in Suzhou, China) and projects 15% revenue growth in 2003 (from 13 million in 2002 to 15 million in 2003). It already seems like their product and production diversification strategy is paying off.

The China site designs, develops, and builds wet processing equipment. In Europe, the new line will be officially launched at Productronica this November. The demand for KSL's new products is very strong: the sites' production capacity of 3000 sq.m is booked six months in advance. KSL is planning a greenfield site, which they will start to build in October. In Phase I, (max. 12 months,) 6000 sq.m of production and overhead area will be completed in Suzhou. Project Phase II will add another 4000 sq.m of production area. The estimated start for the second phase will be sometimes in 2004.
I spoke with Robert De Sitter, the Chief Operating Officer of KSL China. He explained, "This new greenfield site and capacity investment will set the right base for the growing demand and additional products like handling systems and accessories for the local market."

To be prepared for the planned diversification of the China site product portfolio, the local R&D group already counts 16 employees. The synergies of the China portfolio with the existing portfolio have already shown a positive effect on the company's production and sales in Germany and rest of Europe and the US.

Although the term has become a clich¿n our industry, KSL seems to be quite serious about pursuing its strategy of becoming a "one stop solution provider" for wet conveyor lines specifically designed to meet customer demands for quality, technology, flexibility, and lowering production costs.

Don't forget innovation. KSL's latest product line, "Clean Line," provides process ability in cleanroom environments, reduces product lead-times, increases user-friendliness, and simplifies product handling. In addition "Clean Line" affords the customer greater flexibility through significant design changes. A shorter and more effective supply chain had been made possible through the design changes and allowed KSL to boost its sales by providing the customer with a significant cost advantage. A positive and targeted effect with the new product line is the new face which supports the modern and high-tech image of Kuttler.
In addition to their product design, KSL is restructuring its own operations to proactively meet some of the challenges their industry faces. KSL project teams are (i) reducing lead-times to less than one month (a few years ago it had been up to one year for standard products); (ii) reorganizing production; (iii) investing in a new R&D department with the focus on product portfolio diversification; and (iv) acquiring new state-of-the-art software, which includes data and revision management tools with modules for internal and external users.

At my latest meeting with members of KSL management of China and Germany, Mr. Sakautzky, the European Sales Director, offered his view on the KSL markets. "As of today we expect and already see a stabilization in Europe, slight to moderate growth in the Americas and massive growth in the Asian markets," he said. "Our goal, plans and forecasts show an overall growth for KSL and reflects a future 1/3:1/3:1/3 sales split over the regions. We get very positive impulses, inquiries and projects of the German market and the U.S. market. . . . We will extend our U.S. commitment by building up additional employees to the existing local structure."

Volker Feyerabend is President of APROS International Consulting ( He has a degree in Engineering and Economics. He has worked for Hewlett Packard, Agilent Technologies, Groz-Beckert in various international senior management positions. He also headed a European Outsourcing Organization with the focus on EMS/ PCB companies. Contact him at

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