Fascinating insights into a traditional family enterprise operating on a global scale

ENGEL – 100% all-electric production of beverage closures

A meeting with Dr Christoph Steger, CSO and Michael Feltes, VP Business Unit Packaging on the challenges within the packaging market by Prof. Dr.-Ing. Otto Appel and Peter Fahnenbruch.

How is the injection moulding machine manufacturer dealing with changing markets, technologies and competitive structures around the world? How is the company succeeding in maintaining its appeal to customers in a performance-driven packaging market?

We discussed these topics with the company’s CSO Dr Christoph Steger and the Head of the Packaging Business Unit Michael Feltes during an interesting visit to Engel headquarters in Schwertberg, Austria. Read all about a technological journey through time, and about the philosophy of a family company that has grown organically over the decades and that is now confidently facing up to the challenges of the future.



The Engel company was founded in 1945 by Ludwig Engel, a Danube Swabian who was forced to leave his home near Belgrade around the end of the Second World War and who found a new home for himself and his family in Schwertberg. According to Dr Christoph Steger, Ludwig Engel was “already a visionary when he was living in Belgrade and he perceived the challenge of building a new life from nothing in Upper Austria as an opportunity to gradually make these visions reality. Even if it was anything but easy in the beginning, Ludwig Engel never stopped creating history or paving the way for the future in the manufacture of plastics injection moulding machines until the day he died.”  In the second generation, management of the company was taken over by Ludwig Engel’s daughter, Irene Schwarz, and her husband Georg Schwarz. They were succeeded in 2003 by Dr Peter Neumann. Not only is Neumann very well known in the global plastics industry, he is also highly respected – both by customers and competitors. After taking his leave from the company at the K 2016 trade fair, he passed on the baton to his nephew Dr Stefan Engleder, the current CEO, who is joined on the management board by Joachim Metzmacher (CPO), Markus Richter (CFO) and Dr Christoph Steger (CSO). “We are very consciously pursuing the strategy of not only keeping the ENGEL Group family owned but also family run. At the same time, we attach great importance to maintaining an equal representation of family members and external executives on the management board to ensure that we receive important impulses from the outside. Stefan Engleder and I, the two family members, have both previously worked in external companies and we also initially assumed responsibilities in other areas at Engel,” explains Dr Christoph Steger.

Engel today

Engel is still 100% family-owned and is, according to the turnover figures we have available, the world’s biggest injection moulding machine manufacturer. Michael Feltes confirms this: “We build around 5,000 injection moulding machines and 1,900 robots every year. On top of that we manufacture around 300 automation systems.” Dr Christoph Steger adds: “In the last business year, the group achieved a turnover of 1.36 billion euros. A large majority of that is still made in Europe, with around 25% of our turnover coming from North America. We are very happy with the way the company has developed over the last few years. Since the crisis in 2009, when our turnover dropped below 400 million euros, we have seen very positive development and a purely organic company growth of 10 percent a year on average. The current business year is already promising to be another very successful one too.” Michael Feltes believes that one reason for the positive development is the company’s solid investment plan. “We have drawn up an investment plan for the next five years that totals several hundred million euros for manufacturing alone. This includes plans to expand our manufacturing capacities, and that in turn includes new buildings and new manufacturing machines.” The R&D division, which is of course also a high priority at Engel, is not included in this. That division currently employs several hundred experts and developers who carry out both application-oriented development and fundamental research projects.

Global, yet still a family affair

Globalisation is another key factor in Engel’s strong growth. Nine manufacturing locations around the world, thirty subsidiaries and sixty representatives all have to be managed as a single whole. The question that inevitably arises is how is it possible to transmit, communicate and monitor the family company’s vision around the world? How can the vision be communicated in such a way that it not only reaches all the subsidiaries, but that it is also understood and lived there every day. The answer, in a nutshell, is to set an example. “Of course globalisation is necessary for a family-managed business of a certain size if you want to generate further growth, but it does come with a certain risk,” admits Dr Christoph Steger, who has no secret formula for combining tradition and globalisation. He believes that the key to success lies in the company’s history. “In some cases, the links to our foreign representatives go back decades, with families working with us down the generations. Our representatives have ‘breathed in’ the company philosophy from the very beginning.” Hiring and firing is not the Engel style. The company prefers to work together to develop and open up new markets, and thereby nurture a symbiosis, a joint understanding of how to run the business. “Mutual trust, intensive communication and personal contact are absolutely vital for us,” explains Dr Steger. “I can tell you something about every individual in our subsidiaries and representatives, and we never go more than 6 months without being in touch.” Perhaps that is the secret formula. And there is another self-evident fact for Dr Steger: “We want to be a global company with strong local connections. Which means we have to find staff from the countries we operate in. Someone from the outside can only understand the culture, the mentality, the subtleties of language and the dynamics of the respective market to a certain degree. But to really convey our corporate culture and the owners’ vision properly, we need staff that are fully at home in the country.” 

In Asia for Asia

In 2001, ENGEL opened its first Asian production plant, manufacturing injection moulding machines with clamping forces of up to 500 tonnes in South Korea. Engel began manufacturing large machinery in Shanghai around ten years ago and it has continued to do so with great success ever since. Around 300 large machines, most of which are used in the automotive industry, are currently produced in the Chinese production plant each year. The injection moulding machine manufacturer focuses on consistency and credibility in this context as well. “At ENGEL there is no cost benefit when someone buys an Asian-produced machine,” assures Michael Feltes. No matter where in the world a machine is built, it’s manufactured to the same design, with identical materials and machined on identical manufacturing equipment. “Even though staffing costs in Asia are slightly lower, that’s relatively insignificant in the overall cost considerations,” explains Michael Feltes. “Our decision to go to Asia and to manufacture in Asia was always due to a desire for closer proximity to our customers. It wasn’t about reducing costs,” adds Dr Steger. The machines manufactured in Asia are not sold to the European market, they’re all sold locally.

Refusing to sell out the future of our children

How does the Engel management evaluate the fact that the Chinese are increasingly buying up high-tech German and European companies in order to strengthen their position and gain a competitive advantage? This is how Dr Christoph Steger sees it: “There have been times in the past when American companies were making a lot of acquisitions in Europe; the companies involved believed they were improving their international positioning as a result. As if that was all that was needed to achieve effective internationalisation, which turned out not to be the case. By now some of those companies have split again, perhaps because the corporate cultures were not as compatible as initially thought. Other companies have simply vanished into thin air.” The political guidance from China is very clear. The Chinese are investing in technology so that the country can develop on its own. And Dr Christoph Steger certainly sees a very critical aspect in this: “There are always potential buyers and sellers around. You could have found European companies to buy these well-known high-tech businesses. Why that didn’t happen goes beyond the scope of our conversation here today. But I want to address one issue regarding the owner and seller side. Owners of the ‘technological heavyweights’ should take care to ensure that we don’t sell out the futures of our children. We are technology pioneers. We come from the land of engineers and visionaries, and we make our living from the fact that we can do something better than others can in this field. We have to take care not to slip into a purely financial fixation; we should concentrate on what we do best – developing new technologies and implementing them in high-tech machines. That’s why our strategy at Engel is to make fewer acquisitions. Instead, we prefer to grow by our own efforts and through better technology. 

Overcoming challenges

At Engel, challenges are part and parcel of day-to-day work – they must be addressed and overcome, sometimes leading to unusual results. That is true at least for Engel’s foray into the manufacture of PET preform injection moulding machines. The machine manufacturer gathered initial experiences when it built PET facilities for the Voest company, which pulled out of the market after a relatively short period of time. Back then, PET bottles were still unpopular and were even considered a health hazard, leading Voest to decide against going ahead with production. Hindsight has shown that decision to be premature. The Austrian company has made two other attempts to gain a foothold in the PET industry. The first was in collaboration with the Krupp company, and Engel later introduced its own PET injection moulding machines to the market. “Admittedly, in our third attempt we did not correctly estimate the complexity of the application and we had to react to that,” confesses Dr Christoph Steger. “That’s another strength of family companies in my opinion: despite the obvious potential, having the courage to admit that a chosen strategy is not leading you towards your goal, taking a step back, and heading down a new path.” Even though a number of Engel’s PET preform machines are still doing well in the market and the company is still receiving enquiries, the company policy is very clear: “The development and construction of PET facilities has been shelved.” 

Doable but not (yet) desirable?

Digitalisation is a topic of hot discussion across the whole plastics industry and it was right at the top of the agenda at the last K trade fair. Dr Steger has his own views on the matter: “Some customers have a slightly schizophrenic attitude in that regard. Service? Yes please, ideally 24/7! But please don’t bring any of our machines online to be monitored remotely.” With the opportunities digitalisation presents us with today it would be easy to have each Engel system – no matter where in the world it is located – monitored and regulated by a service technician in Schwertberg to ensure that it is manufacturing at optimal efficiency levels and is achieving very high availability. “It’s not a call centre we’re operating here. We have specialists with a huge amount of experience,” emphasises Dr Steger. There are some trailblazers in the sector who have already made great progress in terms of digitalisation and interconnectedness, but there are also still reservations. Everything that’s technically possible is not necessarily going to be popular immediately. Engel is also making progress one step at a time. “We should lead by example.” He is referring to the company’s own manufacturing and production sites. “We are already highly interconnected internally, but our IT managers are also very reluctant to link our machines to the networks of our suppliers.” Even if it is sure to be some time before the machine manufacturer has fully arrived in the digital world, at Engel they are convinced that digitalisation is necessary across the whole industry and that nothing can stop it – “we believe in it and we’re making appropriate investments.” One demonstration of this commitment is the takeover of the T.I.G. software company, through which Engel has already established a solid foundation in the digital world in the field of MES. Dr Steger is keen to emphasise that it was “a decision for the future”. The corporate policy is to allow T.I.G. to operate fully independently in the market where it will continue to supply other well-known machine builders in the plastics industry with MES systems. 

“Now, however, the time is ripe for the smart factory, in which all manufacturing machines and their components communicate together and are continuously optimising themselves“

inject 4.0 – smart processes increase productivity, efficiency and quality

According to Michael Feltes, self-configuring and interconnected injection moulding machines have long been a topic in the industry. A number of the ideas that come under the banner of digitalisation today are neither new nor revolutionary. In the late 1980s and early 1990s “computer-integrated manufacturing” was already becoming quite a buzzword, but after moderate successes it turned into more of a taboo and a synonym for over-engineering and excessive complexity in production. “Now, however, the time is ripe for the smart factory, in which all manufacturing machines and their components communicate together and are continuously optimising themselves,” says Dr Christoph Steger with conviction. Behind this optimism is the development of modern information and communication technology, which is making a number of applications possible for the first time. In future, this will lead to significant improvements in the productivity, efficiency, quality and flexibility of the manufacturing process. “At Engel we’re focusing specifically on three areas: machines, production and service, all of which come under our inject 4.0 initiative and our smart machine, smart production and smart service solutions,” adds Dr Steger.  Smart machine increases the processing capability of the injection moulding machines with no need for the machine operator to acquire additional specialist knowledge. The iQ software products, for example, continuously analyse certain process parameters in order to identify and immediately rectify deviations even before rejects occur. The software guarantees a stable process and consistently high product quality, no matter what the ambient conditions and despite any fluctuations in the quality of materials. “Our various smart machine solutions provide the best proof of how assistance systems can make it easier to adjust the injection moulding machines and increase their processing capability,” argues Michael Feltes. For example, iQ weight control ensures that the injected melt volume remains constant over the whole injection moulding process including the holding-pressure phase, while the iQ clamp control software monitors mould breathing and continuously readjusts the clamping force. Both significantly improve process stability. E-flomo is an example of a self-adjusting system. The regulated temperature-control water manifold automatically compensates for temperature fluctuations in the mould, which also increases process stability and reproducibility, while additionally conserving cooling energy. In contrast, all machinery is taken into consideration under the general term smart production. The aim is to increase the customer’s productivity. Linking all the machines and locations makes it easier for the processor to utilise their machinery to capacity, to retrieve the status of injection moulding machines and to create documentation. “We even go one step further and offer our customers – with our authentig MES – an energy-management tool that simplifies resource optimisation across their whole system of machines,” explains Michael Feltes.  Lastly, the third – but central – element of the smart factory are smart service solutions, which mainly involve remote and predictive maintenance. “In order to avoid unplanned downtimes and to minimise planned ones, we must work resolutely on load-related maintenance intervals,” explains Dr Steger. That is the only way to extend the service life of machines and individual system components. Engel is also keen to go a step further in this area and it has made it possible to predict the remaining service life of individual components. Thanks to cutting-edge sensors, assessments of the condition of an injection moulding machine’s plasticising screw can already be conducted online. The evaluation of the wear parameters on the basis of mathematical models makes it possible to identify and – through corresponding adjustments – avoid critical process settings that accelerate the wear of certain components.

The Engel business units

With the advance of digitalisation, the focus is now more firmly than ever on the customer and their product. “This intense focus on customer products and markets has led us to establish business units that are independently managed and that carry all the responsibility that involves. Just as if they were autonomous companies with their own responsibilities,” explains Michael Feltes. “Within each business unit the key account managers also operate with full autonomy in their respective areas of responsibility. We find that to be very important. A key account manager should not find themselves in a situation where they have to tell a customer: Sorry, I just need to ask my boss first.” Furthermore, these structures accelerate the processes for the customer significantly, which is obviously well received. When establishing the business units, Engel takes care to couple expertise with innovation, young with old, and technology with economic efficiency, to ensure that the groups have sufficient resources to make their own decisions independently. “Part of the corporate culture we live and breathe every day is that every business unit is free to make decisions with absolute autonomy. It doesn’t matter how absurd that decision might sound to someone from the outside, as long as it’s made from a deep conviction and for the benefit of the customer,” says Dr Christoph Steger, emphasising once again the uniqueness of the business unit concept at Engel.

Closures and packaging – weights of 0.9 g to 130 kg

At Engel, packaging covers caps and closures of 0.9 g for still water bottles, CSD bottles and special closures such as flip-top caps that are produced in 2K and 3K injection moulding. It also includes thin-wall technology solutions for the food industry with packaging sizes ranging up to just over 3 litres. As a rule, machines for thin-wall technology are fully electric with clamping forces of around 500 tonnes, and almost all are now equipped with in-mould labelling. Buckets, large containers and pallets are also manufactured in this division. Pallets? Boxes? “Yes, pallets, boxes and cases  also come under the Packaging business unit and this is a particularly exciting area for us,” says Michael Feltes. This is because packaging and pallets are linked by the field of logistics, a sector that is undergoing significant change as consumers increasingly move towards buying more online. Michael Feltes is convinced that revolutionary packaging solutions will be developed in future. “The field of logistics will become integrated into the development of new packaging – the two topics will have to form a symbiotic relationship in order to meet the requirements of retailers and consumers.” In his opinion, other regions around the world have already optimised and combined packaging and logistics solutions: “We’re a little bit behind here in Europe.” Last but not least, the Packaging division also covers machines with up to 5,500 tonnes of clamping force and systems with up to three injection units, a 260 mm screw and a total shot weight of 130 kg for the manufacture of large-volume containers. “All in all, the Packaging unit, with its turnover of around 130 million euros, brings in approximately 10% of the company’s total turnover,” explains Dr Steger.

Closure systems – market and technology

The market is always changing. “Converters that power machines with 48-cavity moulds and small companies that manufacture closures themselves as OEMs are becoming less and less common,” notes Michael Feltes. In contrast, Engel is increasingly working with large converters and bottle fillers with high requirements in terms of system performance. Almost all the machines deployed are fully electric. While the classic model, the 280-tonne machine, is fitted with up to 72-cavity moulds depending on the size and weight of the closure, 96-cavity moulds are more common in the larger models that have 380 or 420 tonnes of clamping force. Especially with heavy closures that are manufactured with 96-cavity systems, the challenge is not so much the clamping force as it is the plasticising. High standards are also demanded from the mould manufacturers. “We work very closely with all leading mould manufacturers, be that Corvaglia, Z-Mould or PlastiSud, only to name a few. The mould and the machine must form a single unit,” emphasises Dr Steger. There is a particular demand in markets such as Bangladesh, India, Russia, Africa and the Middle East for turn-key solutions that can only be realised in partnership with other companies. 

“Yet we’re not looking to
initiate a cycle time war.”

Of course, from a technical perspective the question is always: What can we improve? What is feasible? For many years now there has been a trend in the production of closures for ever shorter cycle times. The barrier lies at 2s; 2.3s is standard today and that is also accepted by customers. “We have been working on breaking the 2 s barrier for years, and we have finally achieved that now in a trial project,” says Michael Feltes proudly. Closures with a cycle time of under 2s are produced on an all-electric machine with a clamping force of 420 tonnes and a 96-cavity mould. This corresponds to a throughput speed of 230 kg/h at an energy expenditure of 0.36 kW/kg. “That’s the benchmark today.” For this purpose the system is run open, without a shut-off nozzle. The hot runner is discharged by retracting the screw, with the screw retracted just as quickly as the injection is administered. “This active decompression through withdrawal and without the use of a shut-off nozzle, which lifts up and takes time, is one of the keys to success,” says Michael Feltes. Furthermore, he believes that shut-off nozzles cause shears in the material, and that the alternative of working without a shut-off nozzle also comes with technological advantages. Ultimately, he says, shut-off nozzles are prone to failures, which is why they are often bypassed in production, i.e. run open. This will of course not fit all applications but generates measurable benefits especially for ultra-fast und ultra-light closures. “Yet we’re not looking to initiate a cycle time war. We don’t do that at trade fairs any more either,” admits Michael Feltes. “The quality of the closure is the key. Any expert can examine the closure in detail and they will see that it runs incredibly smoothly.” In the end, the closure has to fulfil a function, and certain process capabilities – or cpk values – have to be achieved.  At Engel, they are keen to emphasise that even very demanding requirements in the high-performance field can be realised with all-electric solutions these days. The only challenge is in delivering the force required for the ejector in start-up mode. While only 4 tonnes are required during operation, 18 to 20 tonnes are needed at the start, when the products shrink too much to the cores.
But let’s return now to discuss a revolutionary development in the clamping unit. For fast-running machinery, the toggle lever with linear guidance on the machine base is currently the state of the art. But as is so often the case, the devil is in the details. With fast cycles, a toggle lever system is usually subject to enormous stress from the heat and vibration – which is not good for either the servo drives or the spindles. “We have worked on these exact issues,” Feltes explains. “So, lower heat means lower levels of friction; lower friction means optimal lubrication – and we have achieved a lot with patented solutions in that regard. Oil is injected at every single moving point and the oil is continuously circulated. Then, to keep the temperature in balance, the spindle is cooled in the oil bath. The shorter the cycle – that is if it’s under 3 or 2.5 s – the more significant the build-up of heat. The heat can be conducted away via the generously sized components, and the heated oil can be cooled again through corresponding heat exchangers in order to keep the temperature constant. This allows us to run cycle times under 2.5 s in a continuous, stable operation with a 420-tonne machine and 96-cavity mould – 100% electric with the drinks closures – and with a screw diameter of 70 to 80 mm, L/D 28 and  up to 1.3 m/s peripheral speed. Today, when you visit the production hall of a converter, you won’t find any oil on our machines or any grease on the toggle lever.”  “For us, the challenge for the future lies in increasing digitalisation,” says Dr Christoph Steger, adding: “Industry 4.0 means two things for the packaging industry above all: interconnectedness and integration. The challenge lies in making that a reality.” The aim is to fully exploit optimisation potentials by bringing together all the process data along the process chain and utilising the full performance capability of the individual components. On average, the interval between the last industrial revolutions was around 50 years. During this interview in Schwertberg it has become very clear that the Engel management is delighted to be involved in this fourth industrial revolution and to be playing its part in shaping the future. For Michael Feltes, this revolution also involves ensuring that “consumers will soon not only find information about the content of foods or cosmetics on packaging, but also about the history of the packaging itself.”
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