Strength through specialisation.

The history of the cooperation between Fries Kunststofftechnik GmbH and Otto Hofstetter AG (OHAG) goes back to the late 1950s. As early as 1954, the family-owned enterprise – then still under the name of “Theodor Fries GmbH & Co. KG” – pioneered the field of injection moulding, producing buckets and household goods. Thomas Rhomberg, Partner and current Head of Research & Development, shares his recollections with us: “At the time, there was still only a modest selection of qualified design engineers for injection moulding tools available. So we were in close contact with Otto Hofstetter Snr. already very early on. Sometimes, I drove to Uznach to pick up a part or to have a tool overhauled.”

Looking at more recent times, you have had 11 tools made by OHAG since 2003. How many of those are you still using in production?
Gerhard Marte (GM): They are cup and bucket tools, all of which we are still using. We have three to four suppliers. But OHAG is the Rolls-Royce of our suppliers, you could say. We turn to them whenever durability, good functionality and easy maintenance are key.

Let’s talk about Fries Kunststofftechnik GmbH first. What range of services do you offer?
Gerhard Bertsch (GB): We are active in four business areas: packaging, gastronomy, industrial baskets and technical moulded parts. The first three are the actual products that we develop. We buy the tools to manufacture them and sell the finished products. The fourth area is moulded parts and basically makes up the majority of our contract manufacturing activities. We have specialised in products that require tailored solutions, have special material requirements and involve complex shapes – for example, the protective helmet that we created.
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In what areas are you considered a specialist within the market?
GB: It’s our innovations that make us stand out from the crowd. We currently offer innovations in the fields of industrial baskets, gastronomy and packaging, where we are a niche player. But we also occupy a niche in the market when it comes to canisters. We produce containers for which UN approvals are required, or where there are very specific requirements in terms of safety or design. This applies more or less to all areas we’re involved in. Our hallmark is a high level of specialisation in various small niche markets other companies lack the confidence to exploit.

In which countries does Fries Kunststofftechnik GmbH have a presence?
GB: We are an internationally active company that ships its products all around the world. There are 50 countries that we supply regularly, and some we supply only now and then. Exports currently account for about 90 per cent of our sales.

What is Fries’s main source of turnover, and how is it spread in terms of business area and geographic location in which you are active?
GB: Germany is our biggest market, followed by Italy, France and Switzerland. The share of our home market Austria is rather modest – it is roughly our fifth-biggest market.
GM: Our activities in the area of packaging are concentrated in Central Europe. For certain products, we are the market leader in this region, or we are getting there thanks to our technology.
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Your product portfolio ranges from a reusable cup to anti-glare slats. What is the common thread here in terms of your core competence?
GM: Our core competence is plastics itself. PE and PP are the main products that we process. For special applications, such as the protective helmets we produce, we also use special compounds. This core competence is a tradition at Fries. After all, the company was the first to start using injection moulding and blow moulding in the 1950s.

Your range of products is huge. How do you meet this challenge?
GM: In terms of technology, it is indeed a huge challenge. From a sales and marketing point of view, it has always been difficult to sell such a wide range of products. In particular, it takes a great deal of effort to ensure that you are always up to date with the latest technological developments in all of these areas. Our advantage is that we have many long-standing staff members and also invest a lot of energy in training young talent. Furthermore, we don’t rely on a standard range or on selling a certain amount, but rather develop special concepts for tailored solutions. Something you often hear in our sector is: “If Fries can’t solve it, no one can.”
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So, do you also develop new plastics in order to be able to offer a solution?
GM: In some cases that is what we need to do. However, we do not mix the compound ourselves. Yet we always ensure that we use materials that help us break through the usual limits of our sector. At trade fairs, we always hear that this or that will not work with plastic, but in many cases we have been able to convince our customers of the contrary, and have proceeded to manufacture the items in question out of plastic.

It seems that whenever you take a closer look at Fries, you stumble upon awards that the company has won. Why is that?
GB: I’m sure that one reason is all of our innovations; and the other reason is our employees. They are very receptive to new ideas. If one of our sales staff comes to us with a new idea and says that we should offer this or that to our customers, our response is not to simply bombard them with our misgivings, but rather to think about how we could implement it. Any company that wants to be innovative needs employees who are willing to work together to make a difference.
GM: You also need to be prepared to give employees the space they need to flourish. For example, putting the design engineer under pressure and demanding they come up with the solution to a certain problem within two days is not effective.
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How does this approach determine the choice of tools by OHAG?
GM: We enjoy working together with the Swiss supplier, despite the exchange rate for the Swiss franc. I have to tip my hat to the Swiss mentality because there is rarely any discussion about pricing policies. Due to the Swiss franc/euro exchange rate, OHAG was forced to adjust its prices. However, the discussion was very amicable, and we were able to strike a deal that was fair for both sides. We’re very happy about that. After all, the distance to Uznach is short, the people at OHAG think in a similar way, and the discussions regarding construction designs go very smoothly.
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To what extent is your successful cooperation due to the fact that OHAG is also a family-run business?
GM: The two companies have been working together for about 50 years now. Our mutual trust goes back generations – and the same applies to the quality. We can rest assured that the tools provided by our Swiss partner will last a long time and work without a glitch.

What are your reasons for buying tools west of the Rhine?
GM: Quality is key. A tool from OHAG easily lasts two and a half to three million uses. A tool from a cheaper supplier will wear out after 750,000 uses, and then it will need to be overhauled. Such an overhaul can amount to 10 per cent of the purchase price. The break-even point is always the decisive factor.
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What do you see as the greatest challenge for businesses the size of Fries and OHAG?
GB: The challenges are different in each business area. However, in the case of packaging and technical moulded parts, the pricing is probably the biggest challenge. Our focus is on quality, but the customer sometimes prioritises cheaper products. The challenge is therefore to convince the customer of the benefits of higher quality. The increasing globalisation of our business presents a further challenge. We have to decide which regions are the right place to seek trading partners, and where we need to establish our own branch offices.

You have a broad network of connections with various organisations and institutions. How important is this network for the further development of the company?
GM: A broad network is essential to the development side of the company. Our development team is made up of four people, myself included. If you want to tackle challenges, such as developing a new material, you need to work together closely with specialists. If you need specialised tools or injection material, you need a partner like OHAG. And for tests and inspections external experts are crucial.

With the participation in Cup Concept, the technology company Fries has taken two steps forward in the value chain. To what extent is this forward integration an opportunity for the future?
GM: Selling products with a straightforward sales route is becoming more and more difficult. Because when the sales route is straightforward, there are many suppliers active in that area. Once the sales route becomes more complex and the sales process more lengthy, many suppliers drop out. This is where we want to come in.
GB: Our focus is clearly on the systems business. If you use Lego as an analogy: we don’t want to sell individual bricks, we want to sell the entire Lego system. Forward integration becomes of interest to us the moment we are the only supplier, rather than one of many.
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Plastic is being increasingly criticised. What materials do you see as possible alternatives?
GM: When it comes to PE and PP, our first priority is to overcome their negative image. As engineers, we know that this lobbying arises from a lack of knowledge. Bioplastics made of sugar or maize are sheer madness in terms of the ecological footprint. In addition, very few people are aware that only about four to five per cent of the world’s entire crude oil volume is used to produce plastics. When you mix plastic with any additional materials, it becomes impossible to recycle it. Plastic is a wonderful material, so our priority should not be to find a replacement for it, but rather to urgently achieve a higher recycling rate. As long as there is no real alternative available on the market, we will stick with plastic.

Thank you very much for your time, and I wish you every success on the path of innovation.