KraussMaffei owner Sinochem restructures

By Karen Hanna 

Sinochem, the Chinese petrochemical company that owns KraussMaffei, is undergoing internal financial restructuring that could strengthen KraussMaffei’s balance sheet, even as it and other plastics machinery makers have experienced challenges.   

The internal debt-to-equity conversion deal, which requires the completion of audits, due diligence procedures and other relevant approval procedures, is not finalized — but that might happen by the end of this year, said Katharina Knaut, manager of corporate communications for KraussMaffei, in an email. 

“The debt-to-equity conversion that has now been initiated is also helping us to drive forward further measures and secure our long-term financial success,” she said. 

The news comes amid other major changes for the company, which last year was working to establish and consolidate operations at new headquarters and plants in Germany. Operating as KraussMaffei (KMCL), the company last year had operating incomes of about 1.5 billion euros, but reported an operating profit loss of around 344 million euros, or about $1.6 billion and $376 million, respectively.   Also,in March 2023, the company had announced it was cutting hundreds of people from its workforce.     

Knaut said the recently announced restructuring signals Sinochem’s continuing commitment to KraussMaffei. She said the deal will allow KraussMaffei to make further investments that will benefit the company, as well as its customers and partners.

Sinochem plans to convert the existing shareholder loan and contribute it as equity to CNCE Luxembourg, the shareholder of the KraussMaffei Group. That will allow CNCE Luxembourg to further convert its shareholder loan and contribute it as equity to KraussMaffei, if necessary.

SinoChem is a state-owned, multinational Chinese company. In 2021, it acquired ChemChina, which had purchased KraussMaffei in 2016.

“With our new, state-of-the-art facilities, including the new headquarters near Munich, we are already achieving efficient and sustainable production that sets standards in the industry,” Knaut said. “Building on this strong foundation, we will continue to be a competent partner for our customers in the future, focusing on sustainable and customized solutions as well as offering first-class service.”

Knaut said recent management changes at KraussMaffei are not related to the pending deal. In late July, KraussMaffei Corp. announced that Nolan Strall is leaving from his position as president of North American operations, effective Aug. 31. Brett Greenhalgh, currently VP of administration and finance, will take over in the role, effective Sept. 1.  

In the beginning of the year, the Supervisory Board of the KraussMaffei Group former chairman Chi Zhang had been appointed as CEO, as the previous CEO, Yong Li, took on the newly created position of chief administrative officer. 

In addition to other changes, in March, KraussMaffei announced it had finalized a deal to sell injection molding machine maker Netstal Maschinen AG to Krones AG, a bottling machinery maker based in Neutraubling, Germany.

In spite of the layoffs and losses last year, Knaut indicated she believes KraussMaffei is on a positive track.

“Like all our competitors,” she said, “we suffered from the decline in demand on the global markets last year. In addition, we have relocated our two largest plants in Germany (from Munich to Parsdorf and from Hanover to Laatzen) almost simultaneously over the past two years. This also entailed new processes that first had to become more established. The scope of these organizational changes was immense and also affected our business results.

“We had implemented an adjustment and efficiency program to establish continuous improvements in the company. ... the measures of the adjustment and efficiency program are setting the right course, which is why we definitely see signs of our turnaround.”