The Walk of Precision - Meeting with Otto Hofstetter, Owner and CEO of Otto Hofstetter AG

It begins with the opening of the door to the production hall - the “Walk of Precision”. Today, Otto Hofstetter, son of the company’s founder and current CEO, is taking me on this walk. The impression you get in these halls must always be seen as a snapshot. A snapshot? Yes, because things are always on the move: becoming more sustainable, more energy efficient or simply better. This is what drives Otto Hofstetter. So it’s not just today’s walk through the production and assembly hall, but the entire business life of Otto Hofstetter AG - a Walk of Precision.

Every production hall has its own typical smell, whether it is plastic or metal processing. And so, as I take my first steps, I notice a fine breeze of stainless steel processing

After just a few metres I recognise the working and living together in a family business. Otto Hofstetter knows each and every one of his employees, and the atmosphere is one of cooperation and respect.

We’ve just passed the old milling machine. This is a fitting introduction to the beginnings of Otto Hofstetter AG. How did it all start?

OH: It all started, as so often, in the garage, in our case the garage of my father’s parents-in-law in Schmerikon, with contract manufacturing, the classic work such as drilling, turning and milling. The company was only two years old when I was born. As a small child, I spent a lot of time in the workshop, often running around barefoot in the summer and kicking a few shavings in my foot. In the beginning, my father made castings for textile machines. The production area was quite dark because of the casting dust, I can still remember that very well. Today - 70 years later - it’s a different world.

And there were a lot of decisions along the way

OH: There have indeed been many decisions that have made us what we are today. Entrepreneurship and growth require decisions - and of course implementation. An anecdote comes to mind, actually a parallel to the present day: our first design engineer, Fritz Müller, used my childhood bedroom as his design office; it was close to production. And today, close to Otto Hofstetter AG, we have the machine and technology hall of Otto Systems AG, which was completed and moved into last year.

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''It all started, as so often, in the garage, in our case the garage of my father’s parents-in-law in Schmerikon, with contract manufacturing, the classic work such as drilling, turning and milling.'' - Otto Hofstetter.

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There have been many innovative developments in mould making with regard to the number of cavities, driven by market requirements. How many cavities did the first Otto Hofstetter mould have?

OH: Our first PET moulds were cube moulds with 24 cores.

For the US customer Continental Can?

OH: Yes, things really took off for us with the Continental Can contract. It tied us down for four to five years, but the market has also developed well during that time

At that time, there were also parallels with the blow moulding machines at Corpoplast in Hamburg.

OH: Indeed! At some point we wondered what other companies in Europe were working with PET. That’s how we came across Krupp in Essen. We prepared the first quotations for Krupp in 1985. We worked together for a long time and supplied the moulds to Krupp. At the time, Krupp was pushing PET injection moulding technology. Unfortunately at some point they decided to set up their own mould manufactoring. This of course meant that a large part of our business was lost.

So you’re always faced with new situations and challenges.

OH: Oh yes. But it went even further: my father suggested to Dr Emilio Coppetti, the owner of Netstal at the time: “Wouldn’t it be something for you to build a PET injection moulding machine?” After a few discussions, Netstal entered the PET business and we became Netstal’s partner for mould making.

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''In the 80s we still had about 60% packaging moulds. The PET boom really started for us with some large orders in 96-97.'' - Otto Hofstetter

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When did you join the company?

OH: I took over production in 1985. I also remember Krupp in this context: Kurt Winkler, our sales manager at the time, and my father visited Krupp in Essen - we were still in technological dialogue with Krupp. The first 16-cavity mould was on display. Back in Switzerland, they came straight to me: “Otto, we now have to build 32-cavity moulds - and you can forget about your 6-month delivery time. We have to be able to deliver in 16 weeks.” So twice as big and twice as fast.

Does the involvement of employees lead to longer decisionmaking processes?

OH: Not in principle. But this intensive involvement is not always easy. Take the example of the water distributor. It could be made as a welded construction, which would be much cheaper. But that’s engineering, and designers don’t like to deviate from the standard. Breaking up and changing established systems, design solutions or even company structures and processes often requires a lot of persuasion to get everyone on board. Figures, measurements and comparisons can help.

Does AI play a role here?

OH: Yes. As I said, we are already highly automated in the PET sector. If I think about the process of creating the design of a mould part, modelling the 3D model, integrating the AV and processing the mould part on the machine, it involves all the processes and several people. It is a complex process - from the idea to the design to the finished mould part. All the steps in between have to be digitised. My concern is that it is becoming increasingly difficult to find engineers for such projects who still want to work in production.

We have now reached the final assembly area. Are all the moulds assembled here?

OH: Yes, all PET, packaging and medical moulds pass through this assembly area. About once a week a PET mould is shipped from final assembly. Today, we only need 14 days in final assembly for a 144-cavity mould. For quality reasons, assembly still involves a lot of manual work. In some cases it is “only” a matter of placing new cores to reduce the weight of the preform. This is still an important issue in the market and is reflected in the fact that we build about three times as many cores as moulds. This means that we produce around 18,000 cores per year for around 5,000 cavities.

Do you not only assemble the moulds here, but also overhaul moulds?

OH: Yes, the moulds for overhaul/ revision also go through assembly here. This gives us important information about wear and tear, as mentioned, but also about production conditions.

We are now standing next to a 144 cavity side-entry mould. You have recently made another strategic decision that is pointing the way forward by switching from topentry to side-entry PET moulds. How has the side-entry mould been received on the market?

OH: The 144 cavity mould is the preferred system size in the USA. In Europe, moulds tend to be slightly smaller on average. This 144 side-entry mould is running on a Husky injection moulding machine at Western Containers in the USA. We also supply side-entry moulds to other customers in the USA as replacement business for discontinued moulds, such as Western Containers, Southeastern or Berry Global. We are less involved in new system business here. These are important references for us in the market. It is a Husky-dominated market, but I have the impression that they are accepting Hofstetter in the US.

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''Today, we only need 14 days in final assembly for a 144-cavity mould. For quality reasons, assembly still involves a lot of manual work.'' - Otto Hofstetter

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The fact that Otto Hofstetter is not afraid of challenges, both as a company and as a person, can also be seen in the entry into system supply with Otto Systems AG.

OH: Well, we do our homework. If our risk analysis ultimately points in a certain direction, then we are in a position to decide quickly. Speed in decision-making is increasingly important these days. Before any major decision is taken, this important question must be answered in the affirmative: If it doesn’t work, can the company cope with the move or development? If so, then we implement the decisions - quickly and with full commitment. Then there is no going back, only a forward strategy. We keep a close eye on things, but our focus is on implementation.

How do you see the current technological developments in PET mould making?

OH: The developments in the market in terms of performance, energy and water consumption don’t really excite me. The basic structure of the mould remains the same, the materials are identical; even with a higher rPET content, no changes are necessary. In my opinion, there are no really disruptive technologies on the horizon. Perhaps something will happen soon in the development of mould materials. Perhaps base plates made from aluminium or carbon-reinforced materials. We’re already seeing that in woodworking machines - we shouldn’t ignore that.

In today’s competitive and market situation, is technological exchange still possible?

OH: Yes, there is still a technological exchange. But in frank terms: We have worked together with Netstal for over 20 years. Mould and machine - the two are interdependent and have been further developed in technical coordination within the team, whether it was the machine, the mould or the system. It was always a competition, keeping pace with developments in the market. This “openness” has actually disappeared at the moment. In my opinion, this is also due to the fact that Netstal is no longer independent, but part of a group with its own mould making division - and they are holding back on information. I regret this because a partnership of many years is coming to an end.

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''Before any major decision is taken, this important question must be answered in the affirmative: If it doesn’t work, can the company cope with the move or development? If so, then we implement the decisions - quickly and with full commitment.'' - Otto Hofstetter

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In a competitive environment, isn’t it important to give credit where credit is due? Does this help the market, the industry, the product, the PET bottle system?

OH: Double yes! We are not jealous and we respect the achievements of our competitors. It’s part of our culture that we don’t talk badly about our competitors. We limit ourselves to showing our positive sides - in mould making and as a company. We know what we can do, we know our goals and our mission. All competitors have their place in the market. We all work for customers who we want to convince of our product. That is how products get better and better.

Regarding the expansion of the portfolio with Otto Systems: Are you on the way to becoming a systems supplier?

OH: Our motivation was to remain independent. Otto Systems serves niches, not the markets of the big players. My philosophy has always been to serve the customer optimally through partnerships. This also means launching products that make us unique. This is what we are trying to achieve with Otto Systems.

Is there a learning curve at Otto Systems that puts the system - machine plus preform mould - in a new light?

OH: Indeed! We are definitely getting to know the preform business from a new perspective. We were aware of the complexity of the whole system, but experiencing it for ourselves is what I would call it: Broadening our horizons.

Being convincing also means staying on the ball. What does that mean for Otto Hofstetter?

OH: Good comparison. In sport, “staying on the ball” means working hard, training hard and using new training methods.

The same applies to industry: working hard to improve - both technically and technologically, and in terms of processes. I’m thinking of idle times, to name just one aspect. “New training methods” means being open to technological developments, also in new ways and with new approaches. All with the aim of meeting our customers’ needs. That is how we stay on the ball.

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MILESTONES IN PET PREFORM MOULD DEVELOPMENT

1955 Founding of the company by Otto Hofstetter Sr. in Schmerikon at the shores of Lake Zurich

1962 Construction of first moulds for thin-walled packaging

1977 Produced their first injection mould for PET preforms with 16 cavities for the Continental Can Company, commissioned by major American beverage brands

1985 Introduced TiN coating for cores and neck splits, showing early commitment to surface protection technology

1988 Developed 48-cavity mould, expanding production capacity possibilities 1989 Created multilayer technology for PET preforms, enhancing barrier properties

1997 Otto Hofstetter Jr. took over leadership, marking transition to second generation

1998 Launched 96-cavity mould, significantly increasing production efficiency

2000 Started own production of mould base plates (Stammformen) 2002 Introduced 64/72-cavity moulds

2003 Pioneered 144-cavity mould, pushing the boundaries of high-volume production

2007 Developed 128-cavity mould for 3,500 kN platform, optimizing the cavity count for specific machine platforms

2007 Implemented OH Xtreme coating as standard for thread splits, improving durability

2010 Refined the Cavity-Lock system with precision core alignment through high-precision guide sets

2014 Otto Hofstetter Jr. named EY Entrepreneur of the Year in Switzerland

2016 Established Otto Systems, a sister company focused on consulting and engineering for turnkey PET preform production systems for special applications

2023 Entire mould portfolio compatible with Side-Entry systems

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How do you get the next generation interested in this “ball”?

OH: That’s an interesting point. I have always tried to create a balance. A balance between anger - which is always present in the mould making business - and the joy of what you have created. I know that my wife sometimes noticed when something was bothering me, but my children didn’t really. The positive things were always more present. One day my daughter Livia asked me: “What plans do you have for your company?” “Oh,” I replied, “are you interested?” “Yes,” was her answer.

When the company management passes from one generation to the next, does that have an impact on the company itself?

OH: I think so. From my point of view, the most important thing is the trust of the employees in the company and in the management. In our case, when we told the staff that my middle daughter was going to take over my job, it was very well received. For me, it was a clear vote of confidence.

As a child you used to run around the workshop barefoot. You probably perceived the development of the company differently than your children did during their childhood. What prevails in the next generation: Anticipation of the creative process or respect for responsibility?

OH: I would say both. My daughter was very excited about the opportunity to shape the business and take responsibility for the company and its people. I have to say that her enthusiasm was somewhat dampened when I ‘pushed’ her into the day-to-day running of the business. There was frustration at times, and that’s normal! The often small-scale work in a family business, the many technical and personnel decisions, was a little different from what she had imagined. But she is very structured and is well on the way to building up her structures in a way that suits her.

You once told me that you and your father had a crucial discussion during the transition period in which you said, “Either I take responsibility now or I have to leave. Can that happen in the current transition?

OH: I think I can hand over the responsibility quite well. I’ll be at my daughter’s side, guiding her - not leading her, that’s important to me - and helping her to create her own structures. Unlike my father, I don’t see myself as a patriarch. He always decided everything himself. That was the spirit of the times.

70 years of Otto Hofstetter, who would you like to thank?

OH: My family, my wife and children for their support and understanding.

My thanks also go back: I would like to thank my father for building up the company. And, of course, to my many partners and companions. And there is one more reason to thank: it goes to - this may come as a surprise - our biggest competitor: Husky. I have always looked to Husky as a role model. Of course, the relationship used to be more open. I visited Husky in Wiesbaden, later in Luxembourg and in Toronto many times, and Husky teams came to visit us. We always toured production together. There was also an exchange of information about new processing machines. When Robert Schad spent his skiing holidays in Austria or Switzerland, he would occasionally visit us from time to time. So there was always an exchange, and Husky was the role model, or as I say today, our benchmark.

A moving conclusion! Thank you very much for the interview. I really enjoyed the Walk of Precision today and wish Otto Hofstetter, you personally and the next generation all the best and every success for the future.

www.otto-hofstetter.swiss