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Spain's builders pursue World Class status.

The machine-tool builders of Spain continue to move toward World Class status. Some of them already achieved it. More certainly will. But for sure, the industry is gaining in its level of technological expertise and applications sophistication. That all became very apparent, especially to first-time visitors to the industry's biennial machine-tool exhibition in Bilboa in Spain's industrial Basque Country last October.

There were some 580 exhibitors at the event, about twice the number of the previous show. The extravaganza covered eight various levels in several buildings.

Spain sports some 143 machine-tool manufacturers; 115 of them are in the AFM-the country's machine-tool association. Some 50 of those companies are interested in exporting and servicing the North American market and are part of the Machine Tools of Spain group, headquartered in Chicago, an association dedicated to promoting its members' equipment in the US.

That fast-growing industrial sector produces more than 2500 different models; more than 700 are equipped with CNC. Spain ranks 12th among the world's machinetool producers. Its track record through the 80s is impressive. For example, it has moved from a 396-million industry employing 10,600 people in 1986 to total production in 1989 of $807 million while improving productivity to the point where it took only 7884 employees to create the larger numbers.

Output in 1989 was up almost 15% over 1988, while exports during that period grew 24.4%, moving from $260 million to $324 million. Main export markets were West Germany and France, followed by the United States, Great Britain, Portugal, and Italy. Exports to the US in 1989 (1990 figures are not yet available) totaled 3662 units valued at $25.7 million. Among the most significant types exported to the US were milling machines (1726 units valued at $14.2 million); lathes (94 units valued at $3.2 million); drilling machines (173 units, $814,000); punching presses (226 units, $1.9 million). A serious contender

"Spain is now ready to seriously compete in the high-tech market," contends Victor Altuna, director-commercial of Estarte Y Ecenarro, a centerless-grinder manufacturer headquartered in Elgoibar, Spain, the machine-tool center of that country. Although he admits there are few, if any, major technological breakthoughs in his industry, his firm is committed to making continuous incremental improvements. "For example," he added, "two years ago we could offer quality within 2 microns; today we can offer 0.2 microns."

The firm produces about 70 machines a year, and exports about 70% of them, primarily to Europe.

Francisco Gabilondo, export manager for Etxe-Tar (pronounced Ehch-tar, because "tx" sounds like "ch"), is just as positive about his firm's ability to compete internationally. Realistically he admitted, "We are not at the top when compared with Germany or the US, but we are working hard to achieve ever better quality and innovative equipment."

He was displaying a five-station, flexible, rotary-transfer machine for machining wheel hubs. It was part of a four-machine unit installed for a New Departure Hyatt unit in Spain, he confided.

Another precision grinding-machine producer, Danobat, says it's ready to step up its activity in the US market. In Spain, Danobat is part of the Debako Industrial Group employing some 1200 members (industrial enterprises in Spain are established as cooperatives). That combination of companies produces grinders, lathes, radial drills, bed-type milling machines, EDM machines, press tools, and saws. One of its arms, D&S, is a combination of Danobat and Soraluce, which specializes in custom flexible manufacturing systems. It has installed a $12 million system for Ford of Europe and a $17 million system for a Czechoslovakian tractor maker to machine gearboxes.

Danobat Machine Tool Co Inc, Arlington Heights, IL, is the grinding manufacturer's US import arm. By 1992, its president, Tony McKillop, estimates sales should be doubled to some $10 million. "We have a good network of distributors now and feel we can handle a substantial increase in business," he says.

"We are going to get more aggressive," McKillop claims. He's currently in the process of determining what to push and is starting to offer machines with the GEFanuc control. "With a view of increasing our market share, we have to be selling what the customer wants to buy," he explains, adding: "You can tell someone you have the greatest control in the world and give him all the technological reasons to buy, but if that is not acceptable in a given market you just aren't going to sell any."

He explains that Danobat has gotten out of manufacturing its own electronics, and has standardized on Vickers hydraulics. "Now we use only commercially available CNC controls that are fully servicable with spare parts in the US. Customers don't have to worry that we are 6000 miles away," he adds.

Why buy Spanish?

Why should anyone buy a Spanish grinder? "It's no longer price," Mr McKillop contends. "If you would have asked me that question ten years ago, I'd have said we have comparable quality for a better price. Today, sales are made because of a combination of quality and flexibility. We are prepared to do things to suit each customer's individual needs, which other companies are not prepared to do."

Flexibility is the key," agrees Alberto Ortueta Azcarreta, director general of the Machine Tool Builders Assn of Spain. He adds, "In Spain we have an attitude of elasticity to adopt the machine to the needs of the customers. This is all done within the normal cost ranges and delivery times." Price is another advantage because of lower labor costs. The official points out that cost of labor in Spain is 65% of that cost in Germany, 80% of France's labor cost, 90% of the labor burden carried in Italy, and about equal to that paid in the United Kingdom.

Currency fluctuation

Mr Ortueta points out that two-thirds of the builders in Spain export, and about half of those export to the US. "We are trying to get more companies involved and more distributors lined up. The problem is that the US is a big country, and it is very important that we have the right service," he says. Another problem is the exchange rate created by an overvalued peseta relative to the dollar, he adds. Jose Ignacio Saez, director, Industrias Anayak, manufacturer of milling machines and machining centers, agrees it is difficult to penetrate the US market because of the currency fluctuation. He points out the peseta has appreciated while the Japanese yen has dropped relative to the dollar. "We used to have a 25% to 30% advantage against the Japanese in the US, but now the Spanish machine tool costs more," he tells T&P.

One Spanish machine-tool builder has overcome the currency problem by establishing a manufacturing arm in the US. Maquinaria Lagun, Elgoibar, a manufacturer of milling machines, has been manufacturing in Harbor City, CA, since 1968. It has been in the US market since 1960, when it sold its mills to importers who marketed them under their own trade names. Lagun has some 40,000 installations in the US.

Loy Cannon, VP of the US-based Republic-Lagun Machine Tool Corp, late last year announced plans for a multi-million-dollar expansion and renovation of its Harbor City facility. At the same time, Republic-Lagun introduced its Challenger Lagunmatic VMC 3516 vertical machining center, which will be made in the new facility. The three-axis (five-axis optional), 7.5-hp high-precision CNC mill has a working surface of 35.5" x 15.75" and an infinitely variable spindle speed up to 5000 rpm. "This new plant will ensure that we will be able to make the new Challenger line quickly and efficiently while maintaining delivery of our other CNC products," Mr Cannon claims.

Building an infrastructure One of the pluses machine-tool builders in Spain have going for them is that the industry is centered in the Basque Country, where the government appears to be very supportive of their programs. As Mr Ortueta, the head of the association, points out, there are five manufacturing research facilities in that region supported by the government.

Also underway is a new training institute due to open in July, aimed at training machine-tool trades. A cooperative activity, the government is sponsoring the facility, and industry is donating the equipment. It will be updated every two years to give students the latest technology.

William Smith, president, Wilpat International Inc, Tustin, CA, and an importer who has been associated with the Spanish builders for many years, concurs that the quality of labor there is good because of the educational and training programs. Basque people are proud of their work and know their craft. Hand scraping is an art still taught in Spain."

Mr Smith is in the process of setting up a service and parts operation in the US, representing Etxea, a manufacturer of large lathes capable of handling parts weighing as much as 130,000 lb.

Burton W Mason, product manager-CNC controls, DynaPath Systems Inc, Detroit, agrees that "you get high value for the price in Spain. Spain makes machines comparable to anyplace in the world that I have gone to." Mr Mason has been working with the Spaniards for about two years, through a distributor, promoting the use of his DynaPath controls on Spanish machines.

"They make good machines and a large variety of equipment-all the way from the simple knee mills to sophisticated machining centers and flexible machining systems," he concludes. If the Spaniards need help, it is in marketing their wares, many observers told T&P. "They are small companies-good products but small-and oftentimes the smaller companies find that the entry fee to the US market (a commitment in resources, time, and money) prevents them from marketing as aggressively as they need to," concludes Mr Mason.

That same lack of resources is behind the lack of documentation needed to sell in certain markets that Theodor Zaharia found. He's president of Torrington Swager and Vaill End Forming Machinery Inc, Waterbury, CT, and was visiting the Bilboa show. He told T&P he found the quality to be good and the price very competitive, but that some builders failed to follow standard quality procedures or to maintain documentation of quality. "That hurts if you are doing business with the aerospace or automotive industry and the customer wants assurances that you have equipment capable of meeting his specifications," he pointed out.

Little giants

Size, however, doesn't seem to hinder their quest for technological improvement. An example is the Fatronik Group of 17 machine-tool builders ranging in size from 30 to 300 employees. Started in 1986, it is considered one of the more significant inter-company initiatives in the Basque Country. It conducts research and development for all the companies at a level that they could not afford to conduct individually.

That research, explains Luis Goenaga Lumbier, Fatronik director, has led to the development of an FMS. In addition to the technology developed in building the FMS, it is being operated on a two-shift basis, making parts for members of the group and even outsiders on a contract basis.

That operating time not only produces revenue for the group; it is used as a learning curve for operating such systems and for training the technical personnel of the various companies.
COPYRIGHT 1991 Nelson Publishing
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:machine-tool industry
Author:Modic, Stanley J.
Publication:Tooling & Production
Date:Jan 1, 1991
Words:1864
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