“As a father of six, there’s not much that can faze me...“

Let’s start with a few words about you.

Davatz: I’ve been with the company for more than 25 years. You could say that I am Netstal born and bred and I take that as a wonderful complement. I started off as a technical service manager and then, around the year 2000, I became service manager in the USA. After that, in 2005, I was appointed ton the executive board in my function as after sales manager. As part of our close cooperation with KraussMaffei, my position was vice president after sales for both companies – KraussMaffei and Netstal. I’ve been CEO of Netstal- Maschinen AG for about a year now. 

How were your first hundred days as Netstal CEO?

Davatz: Very, very exciting, I have to say. After so many years, of course, you know the company like the back of your hand. Yet, you come to know it in a completely different light when viewing it from a new angle and with all the questions that come with it.

You just get stuck in. We’re working on many different areas in order to drive the company forward. It’s no secret that we’re battling with a strong Swiss franc. We have an extremely high export quota, a load we share with a lot of Swiss companies. The situation requires adequate actions. We have already taken key decisions that are currently being implemented.

During your time as ser- vice manager, you were very familiar with the point of view of your customers. I imagine it must have been exciting adopting responsibility for Netstal with this knowl- edge in mind.

Davatz: You pick up on a very interesting point there. It’s actually helpful to have walked in the customers’ shoes and learned to understand what they need, either generally or in the after sales phase. What helps our customers to run their company better and more effectively? There is often a stark difference between a glossy PowerPoint presentation and real life in the production department. Having experienced this helps a great deal. This is perhaps why I also said, from when I started as CEO, that Netstal as a company has to have a certain amount of modesty and, maybe, even re-learn how to listen to the customers properly. We sometimes do not see clearly until we have thoroughly understood what our customers want. This is what I mean when I say ‘modesty’... taking the time to listen and understand what drives our customers. Where do they want to be in three years? What will they need in five years to be able to keep going?

How would you describe the challengesintheglobalpreformand closure market? Where exactly do customers feel the pinch, and does that vary from region to region?

Davatz: The basic issues are well known – higher productivity, higher plant availability, higher output at lower costs. For Netstal, these challenges are a good thing, as they are best met with high-quality equipment. One important issue is having to enable employees to operate the systems in such a way as to make the best use of the machines. In Europe, the general rule is that when a new system is put into operation it is operated by on-site staff from the get go. In other regions, this isn’t always automatically the case. The main topics from a technical and processing perspective are recyclate processing, environmental issues and energy consumption. Emphasis on these topics is also different from region to region. Then there’s closure production, which is both challenging and exciting... the caps and closures follow the bottle, so to speak. The increase in productivity in our systems is so impressive that market growth is over compensated. A while ago, we produced specific closures in 5 seconds. We’ve managed to slash that time in half. You might think we’re doing something wrong but we’re continuing to develop in any event. We want to be one step ahead of the competition, making our customers more productive – and the strategy is working. Just recently, we have been able to successfully win over a tender for a large project, beating out the competition. 

How well do you think Netstal is positioned in the barriers depart- ment? How is Prelactia going?

Davatz: Prelactia... technically, Prelactia is an excellent solution, however we haven’t been able to convince the brand owners of this yet. Neither have we been able to convey this solution clearly enough to the market. All its advantages, such as weight, recyclate processing, design freedom... this is what we have to communicate and present. This is a great opportunity, particularly considering the vast global milk consumption and the enormous growth rates in the milk mix drink sector. We need to reach our customers but also the brand owners and maybe even consumers.

Would Prelactia technology also be implementable for coffee capsules, alongside milk products?

Davatz: The market for capsule systems is growing, no question. This is why we are going to present a capsule solution at the Fakuma trade fair. Rather than using the Prelactia double-layered overmoulding process, we make coffee capsules using a co-injection process. Here, we’re talking about three layers, with the barrier layer in the middle. There are challenges here that we can meet using precise Netstal solutions. The possibilities of sandwich injection moulding are so extraordinary that we can envisage using the process not just for portioning tea and coffee, but for many other applications, such as baby food, soft drink concentrate or medicines. 

How has business been for Netstal and how’s it doing now? (perhaps Include the 2016 / 2017 figures)?

Davatz: PET business is stable, but that also means that we haven’t achieved any significant growth. We have to lay our cards on the table and admit that we’ve lost the Chinese market, yet we have been able to compensate somewhat with south east Asia. Things are going positively in both the Middle East and Africa and Europe continues to be stable.

What do you think of increased competition from China?

Davatz: I think that China has made clear progress where tools and machines are concerned. I take that very seriously. That their facilities aren’t yet achieving the same productivity as other, more established systems is a fact – emphasis on the word ‘yet’. We’re making great strides here. The trend is clear – things are moving forward.

The story takes a controversial turn as Netstal belongs to KrausMaffei, which is a Chinese state-owned company. Is that not an unusual constellation?

Davatz: Netstal has been part of the KraussMaffei Group since 1991. For a long time, the two companies were even competitors, yet they also had an almost complementary product portfolio. The change to ChemChina brought a lot of positive changes for us. The rather short-term private equity mentality was lost and we can feel a positive, long-term strategy and focus. Our day-to-day business is conducted independently of the Chinese. We have the scope, the competency and the responsibility for developing the Netstal brand further. That’s the way I perceive it personally, and that’s also the way our local employees perceive it.

Is Netstal still undergoing organisational upheaval?

Davatz: We’re working intensively on becoming simpler and more committed, both with regards to our corporate culture and with regards to our processes. Our aims are simple processes, adapted to Netstal. The second, and no less important, point is the product portfolio that, it has to be said, has accumulated over the years. We’re making great efforts to streamline it. More concretely, the well- known Synergy range we introduced in the 1990s, with 600-8,000 kN, will no longer be available from 2018. It will expire. This is a huge step for the company. However, it’s necessary to work up the courage to take this step. At the same time, we’ve developed and invested a lot so that we can continue to offer the diversity the Synergy range provided through our new products. It’s necessary for us to transfer everything to the new aXos controller generation. This means that our DSP control technology will be discontinued, with everything being transferred to the new controls. A step in the right direction, so we can reduce the diversity of variants here as well.

Are there also deficits in the product portfolio, meaning you have to fill gaps between machine sizes?

Davatz: Despite putting a lot of work into developing new machine designs, Netstal has managed to keep the entire hydraulic series going, too. The new concepts are fully electric in the lower closing force and hybrid in the middle closing force ranges. These products are now mature and ready to replace the older, hydraulic machines. Yes, discontinuing the hydraulic range is a brave move. We have some customers who run dozens of machines like this at the same time. This means that their machinery could certainly do with being updated. Of course some of our people struggle with having to give up a product they have been working with for years. But renewal means giving something up and finding the courage to try something new. We’re pulling this off with motivation and a clear objective.

What is Netstal’s position in the world market in terms of technology and revenue?

Davatz: We provide the PET industry with the most energy efficient machine on the market. This includes availability and output capacity. We are flexible enough to incorporate our partners’ different tool systems, which allows us to respond to their requirements. Technologically, we’re leading the way in high-speed closure design. This also affects the way our machine design strikes a balance between performance and energy consumption. We believe we’re clearly ahead by a nose here. In the closures sector, Industry 4.0 is going to open up a host of new opportunities, which is brilliant. Where revenue is concerned, the PET market is our second biggest sector. In injection-moulded caps and closures, we are market leader.

What does Industry 4.0 mean for Netstal?

Davatz: We’re going to be showing something exciting off at the Drinktec convention... communication between the machine and its peripherals. A machine that’s coordinated with its peripherals is able to receive replies from them. These replies are processed by the control system which allows the injection moulding process improves itself. All this makes everything even simpler for the user. We’re looking forward to presenting this development at Drinktec. However, we should be careful: Not everything we’re calling ‘Industry 4.0’ is actually something new – sometimes it is just a buzzword. Digitalisation is an important topic everywhere, and this is also true for our industry, of course. If you consider digitalisation as a natural development, then you should not expect disruptive technologies to completely change the market. My motto is this: you need to keep up with progress. You shouldn’t be afraid of taking the freedom to think out of the box. Gravity will always keep us grounded so we can return to the facts.

How do you see otto systems and, with it, the business relationship with your long-time partner Otto Hofstetter?

Davatz: The otto systems approach is interesting. At Netstal we have been taking a systems approach for years. We also have experience in the CD-DVD sector, we were subsystem providers and have provided the large suppliers, like Singulus or Steag, with machines. As we all know, the optical disk market has taken quite a hit. For me, the ‘system provider’ or ‘subsystem provider’ approach means that you have to agree on the rules. Who is responsible for what, and what is everyone’s task? This needs to be clearly defined. Moreover, it has to run as a partnership. Our core business is, generally, the development and production of injection moulding machinery. We have a high system competency in the packaging, PET and medical sectors. I also have no problem being a subsystem provider. It’s a question of defining the rules.

Do customers still appreciate performance and technological development in PET processing engineering?

Davatz: This is something that we at Netstal think about a lot. Our job is to communicate the added value we bring. If we can’t do that, we’re doing something wrong. Our customers’ purchasing departments are, of course, required to generate savings; in other words, they are under pressure to buy the cheapest machines. However, they usually only look at one aspect, that of the sales price; They are seldom requested to consider the long-term view when purchasing machines. This pushes productivity and TCO down into second place. When you talk to people from production, you hear something different, like ‘It’s not a problem if the machine is a bit more expensive – we’ll easily make that back through production.’ It’s just a question of who makes the final decision, simple as that. Of course, technology will always be available globally. The Chinese have, as I said, made clear progress. However, at Netstal we strongly invest into development because we believe in innovations.

What do you think of compression moulding technology?

Davatz: That topic is on our radar. However, we feel that it is not as established at it could be considering its mechanical progress. It could be interested to integrate such a system into a filling line. The mechanics are not all that counts, though: quality and efficiency of the preform is also important. Injection moulding is already an established process for PET preforms. Let’s say that further developmental steps are certainly a possibility.

What does our sector have to look out for?

Davatz: Our sector is continually driven by productivity and item costs. Manufacturers as well as brand owners have to keep in mind that plastics are a controversial issue. Plastics in the environment, plastic in the oceans. How can we return these streams of plastics to the material cycle? We have to work on that.

What about our sector motivates you and what annoys you?

Davatz: I’m motivated by technology, yet the sector has to think a lot more in solutions. What annoys me? Nothing, really. We have to move what we can and not let ourselves be held back. I’m an optimist, and as a father of six, there’s not much that can faze me.

Mr Davatz, many thanks for talking to us.