–DMG Mori – Taiyo Koki Co – CNC Vertical Grinding Machine

Hey All,

I am trying to learn more about Taiyo Koki.
This Japanese company sells CNC Vertical Grinding Machines.

DMG Mori acquired 50% of the company a couple of years ago.
Thanks to this acquisition, Taiyo Koki could make use of the distribution network of DMG Mori.
Which is why they have been expanding production significantly over the years.
They grew revenue from $ 63 M (2016) to $ 101 M ( 2019).
Profit grew commensurate from $ 8 M (2016) to $ 17 M (2019).

The company Is debt free and is only selling for $ 52 M.
Which makes it very very cheap ( PE 3)
2020 will be a bad year due to COVID19 , which undercut investment capital goods significantly.

I am just trying to learn more about the CNC Vertical Grinding machines that Taiyo Koki – DMG Mori is selling.
Do any of you make use of the product? Are there any competitors you prefer? Why?
How is the CNC Vertical Machine space evolving?

Any help would be greatly appreciated.

Well, as a grinding professional.... I've never heard of such a beast.

My personal experience is limited to Studer and Haas Multigrind as far as CNC grinders is concerned.

One of those with the stepless head would be awful interesting.

Thank you for sharing.

macds said:

Well, as a grinding professional.... I've never heard of such a beast.

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As I'm a not-so-professional grinder, what do you think of this beast?

Vertical grinding machine - DANOBAT VG - YouTube

Milland said:

As I'm a not-so-professional grinder, what do you think of this beast?

Vertical grinding machine - DANOBAT VG - YouTube

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Great video!It's amazing to see how well the grinder operates.

If i am not mistaken DANOBAT is one of the larger providers of vertical machine grinders.
How useful is a vertical machine grinder? Why would you buy a vertical machine grinder?

Do you think vertical machine grinders will be more in demand? why?

Milland,

My experience with Danobats is limited to surface and cylindrical grinders.

That looks like quite the machine, certainly expensive.

Danobats are good machines, if there is support, like anything.


Makino also makes a version of the a51nx setup as a grinding centre.

In my opinion, the user interface is very important. Something I believe, Studer has nailed for ease of use.

The OP sounds like an investment analyst, which is no bad thing. I certainly like talking to them in our industry because you end up learning things you didn't know. I would say that vertical grinding must be so specialized that evidently the job shop, R&D and small manufacturing operation people here on Practicalmachinist are not familiar with them. So the interesting question is probably, are there general trends where these machines are replacing some other manufacturing method such as how EDM replaced a lot of jig boring and grinding? I'd be interested to know the answer to that question.

rcoope said:

The OP sounds like an investment analyst, which is no bad thing. I certainly like talking to them in our industry because you end up learning things you didn't know. I would say that vertical grinding must be so specialized that evidently the job shop, R&D and small manufacturing operation people here on Practicalmachinist are not familiar with them. So the interesting question is probably, are there general trends where these machines are replacing some other manufacturing method such as how EDM replaced a lot of jig boring and grinding? I'd be interested to know the answer to that question.

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@rcoope Thanks for your response.

I am indeed an investment analyst. But unfortunatly i don't know the grinding machine space very well. That's why i am trying to figure out if vertical machines are a highly differentiated niche or is the production of these machines easy to copy. I have only been able to find a small number of participants in this specific area. But as Taiyo Koki only does $ 100M in revenue it seems to me that the barriers to entry are "non-existant". Is it easy to start a vertical grinding machine operation and is demand for vertical machine grinding going to increase?

That's the $ 1M question.

rcoope said:

The OP sounds like an investment analyst, which is no bad thing. I certainly like talking to them in our industry because you end up learning things you didn't know. I would say that vertical grinding must be so specialized that evidently the job shop, R&D and small manufacturing operation people here on Practicalmachinist are not familiar with them. So the interesting question is probably, are there general trends where these machines are replacing some other manufacturing method such as how EDM replaced a lot of jig boring and grinding? I'd be interested to know the answer to that question.

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They are specialized machines and very expensive. Not many job shops or small manufacturers can justify one.

I got a budgetary quote for a Taiyo Koki vertical grinder 10 or 12 years ago as part of process improvement planning for aircraft landing gear components we manufactured. Long story short, the ~$750k price tag could not be reconciled even though the machine would have provided additional capabilities as well as capacity for the company. There was concern that we would not be able to capture additional work that could use the capabilities offered by that type machine.

If they have the geometric control capacity to also grind gears, I could see that being a nice filler application when more targeted work wasn't on hand. Wouldn't be as efficient as the purpose-made machines, but if the costs work out why not?

Probably could do some light Blancharding on the machine I linked to, more for finishing than roughing, of course.

Sound much like a campbell vertical grinder.

Yes, same sort of idea.

We were looking at a Campbell before purchasing the Haas MultiGrind at the last job.

The Campbells I've seen are MASSIVE machines.

vianney said:

But as Taiyo Koki only does $ 100M in revenue it seems to me that the barriers to entry are "non-existant".

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The barrier of entry has more to do with reputation and specialized knowledge than dollar figures.

Grinding is an old process. Certain applications have replaced grinding, whereas others have not and cannot.

Very much unlike 3D printing companies that can sprout up in a handful of years and develop/acquire a large patent portfolio.

Heavy specialization in old technology means a large amount of tribal knowledge. Limited growth potential, but possibly very valuable to an existing company/conglomerate that would like to add that type of capability/technology, possibly to the exclusion of their competitors.

vianney said:

@rcoope Thanks for your response.

I am indeed an investment analyst. But unfortunatly i don't know the grinding machine space very well. That's why i am trying to figure out if vertical machines are a highly differentiated niche or is the production of these machines easy to copy. I have only been able to find a small number of participants in this specific area. But as Taiyo Koki only does $ 100M in revenue it seems to me that the barriers to entry are "non-existant". Is it easy to start a vertical grinding machine operation and is demand for vertical machine grinding going to increase?

That's the $ 1M question.

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Is demand going to increase? Probably not. Plastics, near-net shape forgings & castings, 3D/additive printing etc. will continue to chip away at the demand for machined components in the future. On the other end, on the extreme-precision manufacturing front, there will probably be a steady, but not significantly growing demand for extreme precision machine work & machinery. Grinding makes up a small portion of that work. Vertical? grinding an even smaller portion. Whatever machines that Taiyo Koki makes, an even smaller portion. And keep in mind, these area very expensive, specialized machines. Not commodity machines that are often replaced.

Is the barrier to entry "non-existent"? Not even close. Building an extreme precision machine is going to require a very skilled team of engineers.

There's a reason that high end machinery tends to be dominated by older firms. The cost of entry is enormous to produce & support machine #1. Thus, legacy firms will innovate at the pace of competition, and are the only ones to survive.



If one were privy to insider knowledge of upcoming import/export regulations that would favor a machinery company, then maybe invest before the gates were burst open. But otherwise, precision machinery probably isn't the most attractive industry for investors.

vianney said:

Great video!It's amazing to see how well the grinder operates.

If i am not mistaken DANOBAT is one of the larger providers of vertical machine grinders.
How useful is a vertical machine grinder? Why would you buy a vertical machine grinder?

Do you think vertical machine grinders will be more in demand? why?

Click to expand...

Just combing through some of the Taiyo Koki product offerings on their Japanese Website as well as DMG Mori USA website.

Basically tighter tolerances are not going away. Vertical 'methods" have in some cases less distortion of the part due to gravity.

Hardinge spent a lot of money on grinding companies for similar reasons (Tolerance futures).

I would expect Taiyo koki would see an up-tick (long term 15 to 20 year arc) just for the manufacture of core components for electric vehicles (just one example).

+ Other aerospace / automotive applications where tighter tolerances equate directly to higher efficiencies / greener platforms.

The DMG Mori (smaller) vertical / Taiyo Koki solutions look easier to "drive" for novice users perhaps. The smaller footprint and older Taiyo Koki offering look very good but nor sure if they are available in the USA ?

As everyone has said these are specialized / dedicated production machines. + 5 to ten times more expensive than your "Average" machine purchase.

For more hands on work a combination of jig grinders, spin tables and cylindrical grinders + lapping / honing can produce similar results in a hands on way... (That's not high volume production) but at 1/20th of the investment cost in modern machines).

Good that DMG Mori has "Bought" some of Taiyo Koki's "Know how" and vice versa. So combination machines that turn, mill and grind in one clamping ARE useful for current and developing technologies , increasingly so.

But as you know @vianney "good product" does not always equate to a company you should invest in, no matter how excellent the product is - Management of the company is more critical as well as the "environment" said company is immersed in , in respect of it's direct competitors esp. who's fix'n to do you in/ run you out of business.