|
Home>Industry Supplies>Hardware & Tools>
Machine tool industry faces credit woes - Industry Supplies
Machine tool industry faces credit woes - Industry Supplies
The world’s $60bn-a-year machine tool industry faces a potentially disastrous drop in orders in the next few years as a result of the credit problems facing banks, one of the industry’s leading figures believes.
Andrea Riello, chief executive of Riello, an Italian machine tool builder with manufacturing operations in Italy, Germany and Canada, said the sector could experience a 20 per cent slump in orders and sales by 2010.
“The most likely scenario is disaster,” Mr Riello told the Financial Times. “If you speak to industrial companies and they say they are not going to be affected [by the credit problems], don’t believe them.”
Mr Riello has become one of the first senior industrialists to break ranks with the general opinion in manufacturing that the sector will experience only a moderate reaction to the tightening in credit lines linked to the banking crisis.
In recent weeks, several large industrial companies, including the German chemicals group BASF, Siemens, the German electrical goods business, and Caterpillar, the US maker of construction machines, have offered a relatively sanguine outlook. They say their businesses – especially outside the US – are holding up well.
Mr Riello says this upbeat view is hard to justify given the degree to which the banking sector influences the general economy. After a certain time lag, he says, the manufacturing sector is bound to feel an impact, which will lead to a rapid fall in orders for machine tools – important areas of equipment used for cutting and forming metals in most areas of manufacturing.
While the privately owned Riello is small, with expected sales this year of about €130m ($202m), the company is highly international, with only about a quarter of its revenues coming from Italy and with customers in a range of sectors such as automotive, aerospace and general engineering.
Mr Riello – who has built up his group rapidly in the past 10 years, helped by several acquisitions – is one of the most respected figures in the global machine industry.
Other machine tool builders, however, said they did not agree with Mr Riello’s gloomy assessment of the situation.
Javier Eguren, chief executive of Nicolas Correa, a large Spanish tool maker, said: “We do not envisage any major reduction in orders or sales,” while Ramond Stauffer, chief executive of Tornos Bechler, a Swiss machine tool company, said his business was “not panicking” even though it was “a little nervous” about the next six to nine months.
More China Business: Most
Popular Materials | Fresh
Materials | Shanghai Insurance at FreeTemplatesOnline.com | Add | Recommend | Comments | Print | Close