York, Pa. — At Engel Machinery Inc., a major supplier of injection molding machinery, a two-year leadership transition is now underway.
Paul Caprio officially started as president at York-based Engel on Jan. 2. For the next two years, he’s working with as a team with Mark Sankovitch, who has been CEO for more than 10 years. Sankovitch plans retire at the end of 2021.
Engel Machinery is the North American arm of Schwertberg, Austria-based injection molding machinery maker Engel Holding GmbH.
Caprio led rival press maker Krauss-Maffei Corp. for 10 years. He left that company in June 2019. Now that he’s part of Engel, Caprio talked about what he’s learned about the company.
“You know, I never stepped in this building until Jan. 2. And I have to tell you, I was very impressed,” Caprio said in an interview at the headquarters.
Caprio joined Engel just before most companies shut down nonessential travel and stopped welcoming visitors as a result of COVID-19. In the first few weeks, he managed to meet in person with many key Engel personnel, both in North America and Europe.
“It was a whirlwind tour. I still haven’t met everyone; it’s a company of nearly 7,000,” Caprio said.
“I went over to Austria to see a couple of the main facilities and meet about 50 people on the sales and business unit side of the business, and that was excellent to see with my own eyes what we’re doing and what we’ve done in terms of investments and so forth. Then I started to get out and visit customers.”
Since joining the company, he’s gained a new perspective on Engel.
“I always knew the company from a competitive side, but never behind the wall. I never knew the breadth of product — everything on the hydraulic side, on the electric side, different clamp configurations. I mean, it’s really unbelievable the amount of equipment,” he said.
Caprio was impressed with Engel’s research and development.
“One of the questions I had was, how many patents are we sitting on? I always say the companies that have the patents are usually in the lead in terms of R&D. And we have in the range of 700 living patents. That’s really big; it’s something I want to emphasize more in the marketplace,” he said.
Sankovitch said Engel has become a leader in lean manufacturing during his tenure, adopting methods that were first proven at the company headquarters in Austria. During a recent tour, he showed off numerous examples of the lean philosophy and how it streamlines communication, speeds service and minimizes waste.
Sankovitch also highlighted a significant investment in reducing its carbon footprint, adding a rooftop photovoltaic/solar system comprised of more than 1,300 panels at the York facility.
The system has a nameplate capacity of 500 kilowatts and is projected to generate about 640,000 kilowatt-hours of electricity per year.
The system output will cover 100 percent of the York facility’s annual electricity consumption.
When Engel first hired Caprio, he was also impressed by the level of hands-on involvement of the family owners. Stefan Engleder is a member of the fourth generation of the Engel family, which founded the company in 1945. Prior to becoming CEO of the parent company in Austria, Engleder was the company’s head of technology and production. Engleder has retained the R&D role since becoming CEO in late 2016.
“In most companies, the leadership sets the tone,” Caprio said. “And with this fourth generation, with the CEO also the head of R&D, that shows you that Engel feels it is competitive advantage — and a passion — to be in the lead in terms of technology.”
Caprio said having family ownership means Engel can take a longer-term view, keeping key engineering talent through market downturns.
That also translates to management, with the unusual two-year handoff of the CEO role from Sankovitch.
“It’s refreshing, and I think it’s because it’s privately held,” Caprio said. “And it’s working very well. And I think it’s because the personalities are not combative. There’s no battle for the position. It is a transition. Mark is very proud of how the company has performed under his watch, and he should be.”
Caprio noted that Krauss-Maffei grew from having a very small North American market share to becoming a sizeable player during his 25-year tenure. His goal at Engel is to use his experience to spur market share growth in the region.
“The biggest thing from my side is to be at a company where I can help make a difference from a growth perspective. You can only do that if the market is cooperating. But Engel is, for sure, one of the biggest [injection press makers] in the world, and in North America, from a market share percentage,” he said.
One area where Engel’s strategy in North America has shifted over time is the question of local manufacturing. Engel used to do complete press manufacturing, including machining, in York before suspending production in 2009, during the Great Recession. The York building is equipped with large cranes and production bays.
At NPE2018, Engel made headlines with an announcement that it would resume assembly of big injection presses in York by the end of that year. The company cited demand and long lead times for its big machines.
But then the plastics machinery market changed overnight when the United States and China became embroiled in a trade war, with dueling tariffs levied on both sides. The plastics machinery market ended up slowing down, and Engel didn’t restart assembly operations in York.
The York operation shifted its focus to being a technology center, a location to design and test the company’s automation equipment and a base for after-sales support.
“We pride ourselves on being a technology leader, but we also pride ourselves in being a leader on the after-sales support side,” Sankovitch said.
Caprio isn’t closing the door on North American assembly in the future, but it’s no longer part of the company’s plans.
“If there’s any place in the world where you do not have to manufacture it’s America, because [customers are] so open to taking equipment from Asia and Europe,” Caprio said. “In the foreseeable future, we have plenty of capacity, with all of the expansions we’ve done globally.”
Caprio said his goal is to see growth in market share in North America. Sankovitch said Engel is well positioned to make that happen.
“I think we’re set up to take advantage of opportunities in the market. The table has been set pretty good. Now we just need to get there,” Sankovitch said.
