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Germany -- Volker Feyerabend
the Crystal Ball: KSL Chases a Diversified Market
By Volker Feyerabend
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.
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.
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
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
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."
Feyerabend is President of APROS International Consulting (www.APROS-consulting.com).
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