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Tom Burkhardt of Schmoll Maschinen and Hamed El-Abd of WKK spoke with Publisher Barry Matties about the recently formed distribution partnership between the two companies and specifically how each company stands to benefit from this very recent pairing.
Barry Matties: Tom, tell us what's going on with Schmoll and what you are doing.
Tom Burkhardt: We have been here in China for 20 years and have tried to establish a network and a customer base. We have been successful in some areas, and others not so much. After talking to WKK for quite some time, we learned we could win them as a distributor, and we’re quite happy because they will open us up to new areas where we just don't have any access.
Matties: And after 20 years of selling direct, you woke up and said, "what the hell are we doing?"
Burkhardt: Change the direction, right? Go new ways.
Matties: That's smart. Hamed, taking on a line like Schmoll, what does that mean for WKK?
Hamed El-Abd: This is WKK’s 42nd year in business, and when we started, we had been the distributor for another drill manufacturer for 27 years; then our relationship ended with them. After that, we moved to Dalyang, a Taiwanese company. Then they decided after the success we had with them, that they would go direct and then for the past few years we haven't had a drilling machine. That's kind of been a hole in our product portfolio.
A few weeks ago, we met Schmoll management with Thomas and Tom, at the TPCA show in Taiwan. I told them we were looking for an opportunity to do something. We said, "Well, maybe there's some synergy there." The more we talked we felt that this is something that could work for both companies. I think it's a total win-win. We are extremely happy about this. Our sales force is very excited because we know there are areas where we can get into and we have a customer base that would be very interested in acquiring a small product. It's a good deal, and what's exciting is that we could do this in only a few weeks.
Burkhardt: Within two weeks, we finished everything and put a machine in their booth, so it seems we connected fast.
El-Abd: Yes, and if we can do that, wow. Wait until the market sees what else we can do.
Matties: Exactly. Tell me a little bit about how the services work. You have a Schmoll team here already; is that going to stay in place or are you moving all the service over to WKK as well?
El-Abd: The way it's planned right now is that Schmoll will continue to do service on their accounts. The machines that WKK will sell, we will be trained on their machine to be able to do the service and the installation ourselves. We don't think that it's necessary, because our people are already good on drilling machines. It's not as if we've never done this before.
Matties: For Schmoll, how does this affect business? Obviously you're looking for an increase in sales, but does this open up other strategies for you?
Burkhardt: Not really, but our number of machine sales seems significant and I come from Excellon, so I think it's a win-win situation.
Matties: Good. What should the industry know about this relationship, beyond what we've talked about? It's pretty straightforward, it seems.
El-Abd: I think it's a straightforward relationship. What the industry needs to understand is that Schmoll and WKK are partnered up together and they should be worried. (Laughs) We're coming in and we're taking the gloves off. Look, there's a lot of customers out there that would like to have a Schmoll but the they haven't had the opportunity to do it. They have a limited sales force and we have a much greater sales force in many areas. We're located in more areas than they are in China, so we're going to be hitting areas that are normally not available for them. Our deal is for greater China, so Taiwan as well. We offer very good service, and we'll be able to sell support to those customers that have not had good quality support. We're going to bring a better opportunity for customers.
Matties: Nice. With the relationship, Schmoll has other product lines. You're only taking the drill on or how are you handling the other product lines?
El-Abd: At the moment, right now we're only focused on the six spindle driller and the routers. Let's see how good this goes and then we'll look at other opportunities as they open because we also have commitments with other suppliers, like ESI lasers, which is doing very, very well here. So we have to stay focused. It was a similar situation again; they were direct and they needed extra help, and they have come to us. All of a sudden, things have opened up and we're doing very, very well. They’re very excited, and we think we are going to be very excited and happy. If you come talk to us a year from now or at the next show, you'll see that we've got some things in the pipe right now.
Matties: Great. Now, for the rest of your product portfolio here in China, you'll still have your sales team?
Burkhardt: We were talking to Hamed, but actually we are not actively pushing those products, like laser drillers. We are not actively pushing so we do not interfere with each other. We don't want to do this in the future so I see no conflict situation between us.
Here, we're selling 500 machines and I think with WKK we want to increase it significantly. Their sales force is 10 times as big as ours, so it will be a win-win situation.
Matties: Congratulations guys. This is great news.
El-Abd: Yes, it is very, very good news. We are really excited about this. Like I said, you come and talk to us in a few more months at the next show and we'll be talking about the new deals that we were able to close.
Matties: It’s been great to catch up. Thank you.
El-Abd: Thank you.