Convergence not merger

Image: Citizen and Miyano; getting closer From 1 Jan 2010, Citizen Machinery UK will expand its activities and become Japan's Citizen Machinery Co's second European hub. "Citizen has had a [machine tool] hub activity in Germany for some 25 years," explains Geoff Bryant, managing director, Citizen Machinery UK. "However, there are now around 25 active markets in Europe, and this is too many for a single hub to support, so Europe is to be divided between two." This means that Watford, Herts-based Citizen Machinery UK (01923 691500) will take over responsibility for eight countries in Western Europe – France, Italy, Spain, Portugal, Finland, Norway, Sweden and Denmark – servicing and supporting the dealer network within each. Citizen Machinery has a central warehousing facility in Rotterdam, and all machines for Europe are delivered from here. "Our role will be to motivate, train and stimulate the dealer network," adds Mr Bryant, who offers that, in a good year, the eight markets account for some 300 machine sales, with the UK adding a further 100 to that total. In addition to this move, there will be "convergence with Miyano". Already in October 2008, Citizen Holdings Co (ultimate parent of Citizen Machinery) increased its shareholding in fellow Japanese machine tool maker Miyano Machinery Inc to around 65 per cent; it had been just under 30 per cent previously, its initial shareholding taken in January 2007, in fact. At that time (October 2008), the company issued a statement that said that synergies and efficiencies would be pursued, taking in "development, procurement, manufacturing, sales and service". The two companies' product ranges are complementary, Citizen building sliding-head machines up to 32 mm diameter, with Miyano building fixed-head, bar and auto-loaded machines that start at 26 mm diameter and go up to 65 mm diameter bar, with the company having a particular strength in the automotive sector. Indeed, as far back as the 1990s, Mr Bryant says that he thought that the Miyano range would be a good strategic fit for multi-brand NC Engineering, as Citizen Machinery UK then was. A full merger between Citizen Machinery Co and Miyano Machinery Inc has been ruled out for the "foreseeable future", however, reports Mr Bryant, but the two companies are undertaking a "programme of convergence". This will bring the two companies together, "so that they appear to be a single entity in any market, but underneath there will be two entities," he explains. So this means that in Europe, Citizen will have two hubs and Miyano, likewise, will have two hubs. In each case, these are located in Germany and the UK, with the hub operations in each country converging. In keeping with that convergence, Mr Byant has become managing director of Miyano UK (01384 489500), located in Brierley Hill, West Midlands. In addition, Watford [Citizen Machinery UK] will be the head office, with Brierley Hill the branch office. "My job is to bring the two teams together," he underlines. John Stretton has become a director of Miyano UK, with a clearer focus on sales, while there will be four common sales territories for Miyano and Citizen in the UK, each covered by a single salesman for both product ranges, with this structure expected to be in place by the 1 January 2010. "The engineering teams share common skills, so the applications and mechanical and electrical engineers will cross-train so that they are able to support both machine ranges. All Miyano staff are the sort of people I would hire for Citizen. The two companies share the same ethos and long-term view; both recruit, develop and retain people over the long term. Indeed, the average length of tenure is around 13.5 years. "In Europe, it's the same plan: Citizen and Miyano will manage the same territories together. Each country has a Citizen dealer and a Miyano dealer, and we will seek to have the same distributor for both Citizen and Miyano. Already Spain, Finland and Italy (mostly) share the same dealer," says Mr Byant. But in all of this, Citizen Machinery UK's managing director emphasises that "the identity of the two products must be maintained…It makes no sense to merge strong brands, as others have done". There is "nothing radical planned that will destabilise the market, the products or brands". The UK market does have an advantage in all of this, it is highlighted, since the two companies are both members of the machine tool and related technologies trade association – The Manufacturing Technologies Association – and are both members of the turned parts sub-contracting association, BTMA, so have worked closely together. In fact, says Mr Bryant: "The UK customer base has been expecting this for some time, so this further coming together will be seen in a positive, not negative light, I believe." Indeed, earlier this year the two announced a shared sales strategy, although this is now updated by the latest move, of course. With Citizen Machinery UK to be the Citizen/Miyano head office in the UK and second European, converged Citizen/Miyano hub, as of 1 January 2010, there will be restructuring to support these new responsibilities. Promoted to technical manager, based at Watford, will be Citizen's Tom Totten; the company's Darren Wilkins will become sales and product manager, Citizen (currently still to relinquish sales territory in the UK); John Stretton, will be general manager, Miyano UK. The four territories will each be covered by a single salesman for both product ranges, with Citizen personnel taking on three and Paul North, Miyano UK, taking the South-East. Mr Wilkins and Mr Stretton will be the sales specialists for their respective product ranges, supporting the sales engineers on the ground. Image: The new team, L to R: John Stretton; Geoff Bryant; Darren Wilkins In terms of products, back in Japan there will be common development. Indeed, Miyano has already developed a machine using Citizen CNC technology – so-called Streamlining Machining, superposed technology) – the BNX machine, announced in July 2008. And launched in October this year, at MECT, Nagoya, Japan, was a non-guide bush, 26 mm bar Miyano machine, BX-26T, featuring a Citizen A32 headstock. It will likely make its appearance at MACH 2010 (NEC, Birmingham, 7-11 June). BOX ITEM UK-developed software on the world stage The Citizen Machinery UK-developed CNC Wizard for Citizen sliding-head machine program creation was launched in the USA this year; Japan in September; China, October; and saw its Italy launch at the biennial EMO manufacturing technology show, this year held in Milan, last month. CNC?Wizard is now a global Citizen product and discussions are already ongoing to extend it to the Miyano product range. A £600 solution described as a programming aid, not a full CAM system, it helps create and edit programs, cycle by cycle, without the need to look at a book/screen to know what the cycles are and what they do. The output is "a machine-ready program that won't need an edit", Mr Bryant stresses. First published in Machinery, November 2009