German beverage filling and packaging giant Krones has bought a 26% stake in German intralogistical supplier Klug, and says it will stop supplying such solutions through its loss-making in-house business.
Klug is based in Bavaria and had a turnover of around €25m ($33.4m) and employs around 250 staff; Krones said it employed around 70 people in its own material flow technology and intralogistics business.
A Krones spokeswoman told BeverageDaily.com that these staff would all be retained and offered equivalent jobs at Krones.
Describing Klug as a profitable company, Krones said it intended “to upsize its stake in the medium term, with the aim of eventually acquiring a majority of the stock," but told this publication it had no definite date in mind.
“This option has also been contractually granted,” Krones added, mentioning that the stake purchase will cost it a ‘medium single-figure’ million euro figure.
‘When the pipes for the line, come precisely on time…’
That’s ‘intralogistics’? In 2011, trade publication Modern Material Handling described the term as a new industry buzzword involving “every dimension of logistics within the four walls related to implementing, managing, monitoring and optimizing materials handling and information flows”.
Asked what Krones felt was lacking in terms of its own expertise in Klug's space, the spokeswoman said the latter had "comprehensive knowledge and know how".
"Krones' material flow technology/intralogistics segment was non-profitable (loss making)," she added.
"With this decision, on the one hand we plan to achieve a lasting increase in our consolidated earnings, and on the other hand we are able to continue to offer our clients holistically conceived solutions for their intralogistical operations."
Krones has also concluded a co-operation agreement with Klug that means it will be able to offer clients “holistically conceived” intralogistical solutions through its new partner.
“With this strategic decision, Krones’ executive board plans to achieve a lasting increase in its consolidated earnings,” the firm said.
Klug seeks international future
Through the deal, Klug said it aimed to secure its long-term business future in Teunz, Bavaria, and also internationalize the company “particularly in respect of marketing for software systems iWACS”.
“This partner should and must be a perfect match to our company, and the competences should be complementary,” MD Johann Klug said.
Krones said that material flow technologies and intralogistics form part of its Machine and Lines for Beverage Production/Process Technology, which contributed €260m to its 2011 turnover of €2.48bn.
Material flow technology and intralogistics alone contributed €16m, around 6% of segment turnover.
The 26% stake purchase remains subject to German anti-trust approval.