German machine tools gearing up in China

The latest generation of siding headstock turning machine TNL18 by Traub, a brand under the Index Group. The machine allows easy and quick changeover between operations with and without a guide bush for long or short parts and the use of multiple tools. The headstock turning machine is designed for multiple purposes within industry. Provided to China Daily

While Germany has mostly been the cornerstone of the European economy, in the eyes of many investors, Europe is not as important to Germany as it used to be.

According to a survey by the Association of German Chambers of Industry and Commerce, for the first time China has become German companies' top foreign investment destination, totaling $1.36 billion by the end of last year.

Like Trumpf, this change is also visible in Index-werke GmbH & Co, maker of production turning machines, which pins its hopes on China as the sole growth engine.

"We witness an overall gloomy picture in machinery production and even in Asian markets we fail to see exciting stimulus. But the only driver has to be China," said Reiner Hammerl, managing director of sales and marketing at Index.

Index specializes in multi-functional production centers in which different process technologies can be integrated in one machine. The complete machining means not only quality and precision are higher but, primarily, the production costs are reduced as a result of the shorter throughput times.

More than 40 percent of Index portfolios serve the automotive industry, with the remainder left for electrical engineering and fluid technology.

While its business growth rate was partly hampered by China's cooling car market in 2011, Hammerl foresees good opportunities to regain the battlefield in the premium market in light of the stricter emission requirements the government has imposed.

"As Chinese cars need to meet higher environmental standards, they need more precise technology. Our expertise can make products more eco-friendly. We definitely see growing potential in this regard and this is where we edge others out," he said.

Those delivering a promising sales season in China also include Emag Holding GmbH, the largest vertical pick-up turning machines producer.

In the first half of 2012, the major supplier of Chinese steel giant Baosteel group saw a moderate profit surge, amid ubiquitous contracting demand in and out of China.

The company's products can cover the entire spectrum of machining processes in the metal working industry, including chucked, shaft or cubic components.

Its hit product, the vertical pick-up turning machine, can save up to 85 percent of time in picking up spare parts and minimize manmade errors by achieving transmission automation.

Dieter Kollmar, Emag's managing director, sees the increasing allure of China after the Chinese government pledged to invest annually 10 billion yuan ($1.61 billion) in developing high-end machine tools, helping the industry to grow at a projected 12 percent year-on-year.

Upon the completion of a research and development center in Taicang, Emag is set to invest 4.9 billion yuan in a new plant in southern Jiangsu's Jintan city to mass-produce computer numerical control machine tools.

"I think the trend of industrial transition and moving up the value chain has put us in an advantageous position by improving work efficiency and freeing the labor force," said Kollmar.