The companies decided that something was missing from their individual approaches to the automotive market. Frimo had invested in the dispensing, metering and mixing side of the business. But, as Bonsch explained: ‘We carried out a lot of development, but much more effort would be needed to really become the best expert in that area. That’s why we bundle strengths in the alliance and focus on our core business.’
For Hennecke, Wildt said: ‘We always purchased tooling and we had to integrate it into our machines. This cooperation means we have now in Sankt Augustin, a centre of competence for mixing-dosing technologies.’
Bonsch said that Frimo’s R&D team was now focused on the engineering side of the business. Wildt, meanwhile, said that his company had given up some revenue in the third-party market. But, he added, the cooperation should help both companies to grow their profits. ‘We concentrate on the things we are good in and we rely on a strong partner on the other side where we are not that specialised. It also gives us a margin expansion,’ he said.
New growth
This growth comes in several areas. First, it helps the companies to deal with the competitive pressures in the automotive supply chain. As Bonsch said: ‘Customers expect a perfect adaption of our system to their component [and] they have very, very strong ideas on pricing and are very economical.’
He believes they can have the best of two worlds. ‘We can have a system which is very individual to the customer,’ he said. ‘And we are using standardised parts of the system, like the Hennecke wet part. That helps us to be fast, flexible and address customer needs very directly. I think that the market has been missing this.’
In addition, the alliance benefits because both company’s sales forces can pitch it to their clients. ‘It is very important that we drive the cooperation so that one plus one is more than two,’ Wildt said. ‘By adding our capabilities, we want to create more than we could have done in the past separately.’
The cooperation includes machinery and equipment to make instrument panels, door panels, armrests and the whole interior, including seats. Overmoulding injection moulded parts with polyurethane is also included in the cooperation agreement. Machinery to make battery enclosures using polyurethane technologies could be important in the future, Wildt said.
Worldwide deal
The agreement is worldwide, and Bonsch explained that, despite coronavirus, the first projects have been won, and the first products delivered implemented and ramped up. The cooperation has been going on for five months and they are already working on 100 opportunities and projects.
‘We were positively surprised by seeing that number today,’ Wildt added. ‘We expected a much lower number because of coronavirus. We thought that customers would resist placing orders or may not plan orders, but it seems that a lot of things moved in the right direction.’
Bonsch added that there are some nice projects coming up in China. ‘The cooperation in Europe is working very well,’ he said. ‘In the US, there is also huge potential, and the teams are getting closer together.
Wildt believes that a: lot of the products are enablers for the automotive industry to survive the crisis. ‘They need new products and models around e-mobility, where we have a lot of applications,’ he said. ‘Without this the automotive industry won’t survive. They need our technologies.’
The two CEOs are in agreement that the cooperation is working well around the world. ‘We spent a lot of due diligence to make the cooperation right,’ Wildt said. ‘We burnt a lot of midnight oil between last year between October and December. We took a lot of time to define the cooperation and how we would communicate it into both companies and the market at the same time.’
