With Southeast Asian manufacturers predominantly specialising in the automotive industry, how does German cutting tools and inserts company Arno provide services for the sector?
What are your thoughts on the Southeast Asian Market for Arno?
We are fairly new in the Southeast Asian market, as we started our own subsidiary in end 2014. Compared to the larger companies, we are more of a niche product company. Our approach is therefore more focussed and different, we are looking for smaller companies where we can go in with our strengths.
We also do some cost-per-part projects, which is a bit different. This means to say that we do not want to sell a “cut-and-go” product. We want to give them a solution, and break it down to a cost-per-part analysis. The customer does not pay for the tools anymore; he pays per produced part instead.
The markets are quite similar in Southeast Asia; Most are dominated by the Japanese, especially into the two-wheeler or four-wheeler business. Many business goals then depend on the automotive industry: if things are good, business goes up; but if things are not so good, sales goes down.
But this does not affect us much, because we are more niche-orientated and we are not going into mass production. Since we are a newcomer, we do not have much to lose; we can actually have everything to gain. And so far, the past two and a half years were quite successful to us. We also have good partnerships in almost all markets, and we still have the potential to grow.
And what about the company’s goals for the next few years?
I think that within the next three years, the company will be very much recognised in the region as a niche-orientated solution provider. This is because as a smaller company, we are much more flexible than the bigger ones, and a lot of companies want such a supplier.
The trend in Europe is that you tend to see big companies consolidating their suppliers. We do not see that trend here, and because of this, we will be one of the companies that will have an advantage because we are more flexible and niche-oriented.
Of course, you have to have a different strategy and approach. Just to give you an indication: we have roughly 50 million euros turnover with 170 staff worldwide. While the turnover is quite good per head, but if we want to compete directly, then there is no chance in terms of manpower and pricing.
Therefore, we look at products where we have a standard where others do not. If a customer tells me, “I need something that is not standard, I can consume 20 a month”, we can provide that as a standard. Other companies are looking at 1,000 a month, so that amount is not interesting for them. But it is interesting for us. This is our general strategy worldwide, and we are copying and adapting that to the local market here in Southeast Asia.
We also do not supply a lot to the automotive industry in Europe. But in Southeast Asia, we go into the automotive sector. This is because yet again, we are not going for mass consumption, but by picking out the niche markets here.
What are your company’s strengths in tooling?
Our company strength is in grooving and parting-off. Grooving and parting-off is one of our key products, and in the past, the coolant was always external. But the drawback is that when you go deep, the coolant will not reach the cutting edge.
So we developed a through-coolant system for the parting-off tool called the ACS cooling system. We have two versions. The first has a cooling system at the cutting edge. The other has an additional coolant jet targeting the insert flank for underneath. There are dual functions for this: You provide cooling and also chip control. We also found out that with this cooling system, tool life can actually be up to double the original.
This is suitable as our tools do not need a top-end machine tool to be attached to. This is especially suitable in Asia, as manufacturers here will typically buy one machine tool for a specific purpose. This is different in Europe, where they will invest in a high-end machine tool for different purposes.
The customer just needs to tell us where they need the hole, and we make it accordingly to his specifications. With that, you can put it on the machine, and get through coolant with little effort.
We also work with machine tool makers, and we have special holders for companies like Daewoo Doosan, DMG Mori, Miyano, Nakamura and Tornos. We are investing a lot in direct mounting as well. The tool goes direct on the machine; it is very rigid with through coolant, so the output is more. If something happens, you do not have to change the block, you can just change the module.
What other area does your company specialise in?
We do have a wide range of high-positive inserts. In the past, these used to be used for machining aluminium. But with all the new coatings available, there is use for medical applications and even for work where you need to have very fine surface finishing. They can also be used for small parts machining.
APMEN Cutting Tools, August 2017