Breaking Records and New Ground

Ditzingen, Germany-During a press conference here at EuroBLECH in October, TRUMPF executive vice president Dr.-Ing Mathias Kammuller shared some positive financial news

Th 0612ilsupdate01

Ditzingen, Germany-During a press conference here at EuroBLECH in October, TRUMPF executive vice president Dr.-Ing Mathias Kammuller shared some positive financial news-the company ended the 2005/06 fiscal year with 18 percent sales growth translating to record sales of 1.65 billion Euros. The machine tools/power tools division grew by 23 percent in the past fiscal year, and the laser technology/electronics division increased sales by 8.5 percent. Growth outside of Germany remains strong with a 30 percent increase in sales in North, Central, and South America and an increase of 22 percent in the Pacific Rim.

Th 0612ilsupdate01
Ground breaking for the $20 million laser production building was scheduled for November 21, 2006
Click here to enlarge image

Continuing with the growth theme, in November the company announced it broke ground for a $20 million laser production building (see photo) next to the TRUMPF Inc. Customer and Technology building in Farmington, CT. This state-of-the-art laser development and manufacturing facility is slated for completion next summer and will occupy 83,000 square feet on two levels.

The company also has announced a new naming system that aims to clearly identify use and performance of TRUMPF machine tool and laser products. “Names create identity, ensure transparency and comprehension,” explains Rolf Biekert, TRUMPF Inc. president and CEO. “That is reason enough for TRUMPF to develop a new naming system for its products. Over the years the product range has grown and, along with it, the number of names.”

For machines and lasers, the brand is identified with the prefix “Tru,” followed by the technology in English, then power class in numbers. For example, the laser machines are called TruLaser, whereby the previously named Trumatic L 3030, for example, is now the TruLaser 3030. With lasers, the type of beam source determines the new name, for example TruDisk, TruCoax, or TruPulse.

Detailed information on the product names can be found at www.us.trumpf.com.


Coherent speaks out on blocked acquisition

Santa Clara, CA-During the fourth quarter fiscal 2006 conference call on November 1, Coherent President and CEO John Ambroseo spoke out strongly concerning the decision of the German Federal Cartel Office (FCO; Bonn, Germany), less than a week earlier, to block the proposed Coherent acquisition of Excel Technology (East Setauket, NY). During that same conference call, an announcement from Excel hit the business wires, terminating the merger agreement.

“There are many extraordinary aspects to this case,” Ambroseo said. “First and foremost, it is distressing that the FCO has subordinated the primacy of the U.S. Department of Justice in a combination of U.S. firms, especially when the U.S. represents the largest revenue base for the combined entity. It is not clear if this is an isolated incident or if it represents a change in posture on the part of the FCO.”

Stated purposes of the acquisition included combining Excel Technology’s system expertise in key product areas with Coherent’s global distribution network, in particular to pursue industry growth opportunities related to materials processing.

The FCO investigation was focused on low-power CO2 lasers, and the FCO received input from 22 customers, only one of which was outside Europe and an additional one outside Germany, Ambroseo said. “Of those surveyed, 17 were supportive to neutral on the transaction and 5 expressed concerns. One of the opposing parties had mistaken Coherent for one of our German competitors since the customer identified products that were not part of our portfolio.” He described the four remaining dissenting customers as predominantly providers of cutting and engraving equipment that accounted for less than $10,000 in combined annual CO2 sales for Coherent and Excel, compared to combined annual revenues of Coherent and Excel in excess of $700,000.

“The numbers only tell part of the story,” he continued. “The FCO concluded that there was no difference between Excel’s CW and Coherent’s pulsed CO2 technology, thereby allowing them to aggregate the CO2 sales of the parties. This was done despite customers and technical experts telling the FCO that the technologies were not interchangeable due to process requirements.”

Ambroseo went on to characterize the FCO treatment of vertically integrated manufacturers as “similarly astounding. The FCO held that vertically integrated suppliers (our customers’ competitors) did not influence pricing for CO2 lasers,” he said. “They also ignored sales of CO2 lasers incorporated into an end user system by vertically integrated vendors. This allowed them to conclude that one of our German rivals sold less than $10,000 per year in sealed CO2 lasers. You can imagine the impact that this had on market share projections.” The FCO also stated that there is very limited substitutability between CO2 lasers and other technologies, “even though they were provided ample evidence to the contrary, including the SEC filings of competitors,” he said.

Despite such concerns, Coherent chose “pragmatism over conflict” and proposed numerous remedies, including divestiture of product lines, all of which were declined by the FCO, Ambroseo said. At present Coherent is considering the possibility of appealing the FCO’s findings in German courts. Even with the termination of the merger agreement by Excel, an appeal might be appropriate as a way of protecting Coherent’s “longer term interests,” Ambroseo said.

“The management and employees have been exceptional during the last several months under difficult conditions,” stated Antoine Dominic, CEO of Excel Technology. “They have maintained their commitment, focus and professionalism in continuing to build Excel as evidenced by our achievements during this period. We believe that the Company has a strong foundation and look forward to continuing its growth pattern.”

This article is excerpted from one written by Hassaun A. Jones-Bey for the December issue of Laser Focus World magazine.

More in Marking & Engraving