Reifenhäuser Managing Director Ulrich Reifenhäuser said in a telephone interview that the extrusion machinery business is a tough one in the current economic climate.

“We decided to manage the crisis,� Ulrich Reifenhäuser explained.

He said the deal, retroactive to Jan. 1, will give Reifenhäuser the broadest blown film extrusion technology base in the world. New to Reifenhäuser are Kiefel’s stakes in film stretching units, high density polyethylene film extrusion and technology for small film lines.

Kiefel was sold by Brückner Technology Holding GmbH, which owned it for about two years. Brückner sold it to concentrate on the retained Kiefel GmbH thermoforminig and welding machinery businesses and its own film stretching business.

Ulrich Reifenhäuser said although his firm was familiar with Kiefel for a long time, negotiations to purchase began about the beginning of this year.

Reifenhäuser is based in Troisdorf, Germany, and does all its manufacturing at three sites in Germany, a strategy it will continue with, according to Ulrich Reifenhäuser.

“We are dedicated to German machine building,� Ulrich Reifenhäuser stated. “For high-tech and specialty machinery you need engineers who can improve on technology.�

Kiefel Extrusion, based in Worms, Germany, had sales of about 40 million euros (392 million yuan) last year. It employs about 200 and sells through a global network.

Reifenhäuser had total sales of more than 400 million euros (3.9 billion yuan) last year and employs more than 1,000. The figure includes film, spun bonding, strap tape and other machinery. All its machinery begins with an extruder. It claims to operate the largest private technology center for plastics extrusion.

“Our technology center puts us in the position of being able to globally develop and implement extrusion solutions in line with market requirements,� stated Bernd Reifenhäuser, managing director of Reifenhäuser GmbH and Co. in a news release.

Brückner’s Kiefel GmbH subsidiary had sales of about 80 million euros (781 million yuan) in 2008.

The combined business is known as Reifenhäuser Kiefel Extrusion GmbH and will be based in Worms.

In an Aug. 26 news conference, Ulrich Reifenhäuser, and Reifenhäuser Kiefel Extrusion managing director Edgar Gandelheidt stated that all blown film machinery producers worldwide have been under extreme pressure and are reacting by reducing capacity during the market downturn.

In 2007, Kiefel Extrusion had itself estimated the annual value of the worldwide market at around 275 million euros (2.7 billion yuan), although this has meanwhile declined, as have sales at both Kiefel Extrusion and Reifenhäuser’s blown film line businesses.

At the news conference, Gandelheidt said that the new combined firm will have annual sales of 90 million euros (878.5 million yuan), for an estimated 25-30 percent share of the worldwide market.

There are advantages by combining the portfolios of the two companies, as they are not exactly the same. There is little overlap, with only around 10-15 percent of the customers having lines from both companies. Geographically, Reifenhäuser is stronger in the Middle and Far East, with Kiefel Extrusion stronger in the Americas. Even while sharing the market in Europe, the customer base is different there for both of the new partners.

Gandelheidt described how the new joint company now benefits from the large agricultural film line experience of Reifenhäuser, as well as the MDO monoaxial orientation equipment developed by Kiefel Extrusion.

Both companies will benefit from having come to different solutions in die head design and there have been size differences too, Reifenhäuser having developed die heads up to 2,200 millimeters in diameter, while Kiefel Extrusion has been limited to 80 millimeters. Reifenhäuser also brings advantages of its higher degree of backward production integration to the new business unit, such as its own screw production.

Brückner of Siegsdorf, Germany, had consolidated sales of 415 million euros (4.4 billion yuan) last year. With the sale of Kiefel Extrusion it has 1,050 employees and three companies: Brückner Maschinenbau, a maker of film stretching lines and cast film machinery, Kiefel GmbH of Freilassing, a producer of thermoforming and welding machines and Brückner Servtec, a provider of service and upgrading products for film producers.

Brückner Technology managing director Maximilian Schneider stated in a news release that his company plans strategic acquisitions in the next year or two.

Reifenhäuser was established in 1911. The family-owned company is led by three brothers, Bernd, Klaus and Ulrich Reifenhäuser.

David Vink, senior editor of European Plastics News, contributed to this report.