December 18, 2013      

KUKA (KU2:Xetra) has entered into a letter of intent with the shareholders of Reis Group (parent of Reis Robotics).

Under the terms of the agreement, KUKA will hold a 51-percent interest in Reis Group Holding GmbH & Co., beginning January 1, 2014; the Reis family, currently the company’s sole owner, will retain a 49-percent share upon deal closing.

KUKA will also have the opportunity to increase its interest in Reis to 100 percent.

The parties have agreed not to disclose other details about the transaction, which is subject to approval by antitrust authorities.

Reis Group Holding GmbH, with 1,300 employees, generates approximate revenues of $179M. The company’s major entity, Reis GmbH and Co. KG Maschinenfabrik, employs about 850 people and is based in Obernburg near Frankfurt am Main (Germany).

The company’s second-largest facility, in Kunshan China, has about 200 employees. In total, the Group has twenty locations worldwide.

Reis is a systems integrator, as well as developer and maker of industrial robots and robot controllers for a wide range of market sectors. The company applies robots and systems in numerous industrial processes such as welding, cutting and laser machining, as well making castings and plastic components.

Dr. Till Reuter, CEO of KUKA AG, explains: “Reis is an excellent fit for KUKA’s long term strategy. We want to penetrate new general industry sectors together and above all, expand our presence in China. We also see considerable potential for joint product development.”

Dr. Eberhard Kroth, spokesman of Reis Group Holding GmbH says: “In KUKA, we have found the right partner to further strengthen the outstanding market position of our family enterprise. Reis stands for innovation strength and outstanding product quality ? our technological standards and customer commitment tie us to KUKA.”

December to remember

What a month for KUKA: Opens new factory in Shanghai; wins Chinese orders for total of 1,375 robots; the Reis deal concluded very favorably; and KUKA shares rose 1.9 percent.

kuka_shanghai

KUKA is banking on growth in China to bolster demand for its robots, offsetting a slow recovery of manufacturing activity in its European home market.

Auto production in China, the world’s top automaker, is likely to hit 20 million vehicles this year and 35 million vehicles by 2020.

KUKA won orders for a total of 1,375 robots from the Chinese automotive industry, an unnamed Chinese carmaker ordering 1,125 robots for welding and gluing (Reis specialties), among other uses.

Additionally, Beiqi Automotive Foton Motor Co Ltd ordered another 250 robots for automotive production.

“I do not see market saturation there. Cars are an extreme status symbol in China,” Chief Executive Till Reuter told German daily Handelsblatt in an interview published on Tuesday.

In addition, he said he expects Chinese manufacturers to rely on industrial robots more in the future than they do now, shrinking a gap with German peers that have bought as many as 5,000 robots for their Chinese car factories.

Annual revenue for KUKA is $206M from the sale of robots in China, or a fifth of its overall robotics sales.

Future doubling

It aims to more than double that figure in the next three to five years and boost its market share in China from currently close to 20 percent, said Reuter.

Capacity at KUKA?s new Shanghai is claimed to be 3,000 robots per year, but it could grow that figure to 5,000 in the near future to supply more robots to general industry as well as the automotive sector.

The company’s rivals for Chinese market share for robots for car manufacturing, include Switzerland’s ABB as well as Japan?s Fanuc and Yaskawa Electric.

See related article: Shanghai Express: China?s Robot Metropolis 2014-2020