On Oct. 17, 2007, I interviewed Mr. Danny Haran, the CEO of Cimatron at Beijing, on their annual user conference and the ceremony of 25 anniversary of this specialized CAM software company.

Pei Huang: Please analyze the status and developing trend of global CAM market, technology and application. What’s the feature of global CAM market?

Danny Haran: We see several trends in the CAM market. If you look from the technology point of view, we see more and more automation, better integration of tools, and optimization of solutions. Manufacturers are looking for one solution carrying them throughout the entire working process. We are one of the best CAD/CAM providers to embrace these trends by providing end-to-end solutions from quoting to delivery. Another trend we can see is the transition of some customers from 2D design to 3D design especially in the die making industry. As for market trends - the CAM market is becoming more and more competitive, and will lead to more consolidations. Some companies will acquire other companies to get the desired technology or market channel. For example, PTC acquired NC Graphics, Siemens acquired UGS, and Delcam acquired FeatureCAM. So you see the consolidation. We are looking for complementary solutions to get synergy. In a word, the global CAM market is becoming mature.

Pei: The global CAM market seems to grow very slow, compared with CAE and other PLM technologies. What’s your comment?

Danny: I agree with you. CAM market is mature and stable. It will continually grow slowly. I don’t think that there will be great breakthrough. The reason why we can grow faster than the market is because we penetrate to additional markets such as die making. The mold and die customers could be more competitive by using our specialized mold and die CAD solution than using generic CAD, but many Chinese customers are still using generic CAD. It is a challenge for us to show them our advantages and grow as a result.

Pei: Please describe the competing status of Cimatron?

Danny: There are several players in the CAM arena. Some provide general CAD solutions while others provide NC solutions for 2.5-5 axis. Our unique competitive edge is that we offer integrated end-to-end solutions for the entire working process of mold, die and tool makers as well as discrete part manufacturers. That means they can use our solutions for the entire process – from quoting and data import through design, drafting, machining and even EDM programming. So, Cimatron is very specialized at CAM market.

Pei: Please summarize the growth of Cimatron globally and in China. Why the global revenue of Cimatron was almost the same in the recent years?

Danny: First of all, we see growth starting now.? At the first half of 2007, our product sales grew 9%, compared with the same period of 2006. We see a lot of customers going back to get maintenance and more product sales. It is true that Cimatron passed very difficult times at the last few years, and that was because the migration from our old product, Cimatron IT, to our new product, Cimatron E, took longer time than we thought, so the global revenue of Cimatron was flat at the past 5 years. In July, we have increased our holding in Microsystem to 51%, which is our Italian CAD/CAM distributor, with 10M US Dollars revenue in 2006. It would increase not only our revenues, but our profitability as well. So, we will grow both from organic growth, and acquisition. Our profit and gross margin also grew significantly in the first half of 2007, and our growing numbers will become nicer through our hard work. We are now looking for companies to acquire to become bigger. We will focus to bring value to our customers and shareholders.

Our business In China has been very well these years. We got good growth from mold and die industry, and from our 5 axis applications. We invest a lot at southern and eastern provinces and got good growth from those areas, because most mold and die companies are located at those provinces. We have much more sound organization, professional and committed employees than our competitors. We have cooperation with over 100 Chinese universities.

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分页Pei: How about the technological innovation of Cimatron recently?

Danny: The CAM market is very competitive and our customers require to use advanced application to shorten their delivery time and produce high quality tools and parts in record time and lower cost. In order to enable them achieve it and stay competitive, we need to provide innovation and that what we do. A good example could be the new die design which we just released this year. Die design is a very specialized application, because you need to take a sheet of metal and deform it in a way that not only bending, but also giving a lot of pressure on the punch. So, you need to do Finite Element Analysis. To do it better, you need special surfacing functions, which is not offered by standardized CAD systems. Our system offers the right balance between automation and full control over the process, enabling increased productivity without compromising on quality. Innovation really comes from our hard work at understanding the needs of our customers, applying our experience of 25 years. We have got very good response from our customers around the world. Another example is our automated drilling function, which can cut down the programming time by 80%. Cimatron is a CAD/CAM software company, which is our unique advantage. We use our CAD knowledge to do feature recognition, identify all the holes in all directions and automatically assign the drilling sequences. We also offer a new NC-Preview function, which can graphically presenting NC procedure input data and approximated results within seconds, while the former similar functions need two hours. In NC functions, we also offer new 5 axis CAM functions.

Pei: Many CAM users already use 3D MCAD software. Do you recommend them to use your CAD functions, or they still use other 3D MCAD tools?

Danny: We definitely encourage the customers use our CAD solutions, especially for mold and die manufacturers. We offer dedicated solutions for toolmakers (mold and die makers) that were designed to meet their specific needs, and more automatically process. We provide total solutions for them for the entire working process from quoting to delivery. If CAM users use other CAD software to build the model and then transfer to Cimatron, they will lose efficiency.

Pei: Do you also integrate other relevant software to your customers, such as DNC and verification software?

Danny: Yes, we do. We buy a third party DNC software and integrate with Cimatron E to provide a good solution for our customers. We have machine simulation and verification functions inside Cimatron E, but some customers want a high end verification tool like VERICUT, so we just integrate it with our solution.

Pei: In your view, what’s the difference between Chinese CAM market and US or west European market?

Danny: I think the big difference is the design and production process. Chinese mold and die makers are very dynamic, and smart, but sometimes they do not obey the right process, compared with US and west European manufacturers. It is also the area that Cimatron could bring value. Many of them are still use generic CAD tool to design mold. They should use better process to build the tool, so that they could compete with abroad competitors not only for low price, but also for better quality. I think, to improve the process is the next step of Chinese mold industry to build complicated parts and high quality parts.

Pei: Right now, there is a very hot topic in China. That is, changing form made in China to innovation in China. In your view, what could Cimatron contribute to Chinese manufacturing to bring this change?

Danny: I think that innovation has many shapes. It does not mean we need to build everything from scratch. Cimatron could help Chinese manufacturers to improve their manufacturing processes to bring innovation. Innovation should be applied in workshop, so Chinese manufacturers could get the benefit from our 25 year’s innovation experience and go to the next step.

Danny Haran and Pei Huang.