Iscar, which is actually short for Israel Carbide, is headquartered in the northern Israeli community of Tefen, and is also part of the International Metalworking, or IMC. When billionaire U.S. investor Warren Buffett bought out the remainder 20 percent of Iscar from the Wertheimer family for about US$2 billion, the Berkshire Hathaway completed the full transfer of ownership of the Israeli cutting tools firm from the Wertheimer family. Even before the purchase, Iscar was already proving itself to be up there amongst its competitors as a premium provider of cutting tools, especially for the metalworking world.

The company was founded in 1952 by Stef Wertheimer in the Western Galilee town of Nahariya and moved in 1982 to the Tefen Industrial Zone, about 20 kilometres away. In 1984, Stef gave the leadership to his son Eitan Wertheimer who then passed the CEO's seat to Jacob Harpaz in 1995. Jacob then went on to serve as chairman and later president.

Eitan validated Jacob’s leadership praising him saying that the executive team together with Jacob would continue the vision started out by Stef when he first started the company and with positive profit revenues in the last few years, I have no doubt that this trend will continue into the future.

Standing Out Amongst The Rest

Interestingly enough, thanks to the usual dose of misinformation of common mainstream media channels, the Middle East has been often portrayed as a place that is not very good for business and living. Moreover, on Israel, back in Singapore, religious stalwarts of the Abrahamic faiths often mention of Israel and how they would love to at least do a pilgrimage there once in their lives. Until I had done business and trade reporting, I had only known Israel for its famous Jaffa oranges! But this one trip alone made it clear that Israel is more than just a holy city or wonderful fruits; truly, it is the heartbeat of business in the Middle East.

That aside, there are many incredibly successful Israeli companies, and Iscar has, by far, been one of the most successful in terms of its offerings in the metal cutting arena. All over in Asia, their carbide inserts and grades are seen in many heavy and lucrative industries here in Southeast Asia and the Asia Pacific. The automotive industry which continues to dominate a large part of Southeast Asia’s GDP (Gross Domestic Product) regularly, is in need of cutting tools and timely innovations as demands get higher and expectations for superior low cost products increase.

Giri Drori, business development manager, Iscar, explained over dinner on the first seminar day that Iscar’s plan in the Asia Pacific region is to “continue to grow with the industry while committing to superior service in terms of technical support round the clock”. “I believe that every year with our innovations, we set the bar higher for not only the competition in the market, but also for ourselves in the areas of milling, turning and drilling. We look to not only capture the market but also the heart of the market because with that belief in us, only then can we show how much our customers mean to us with innovations that make every difference to helping their businesses.”

The contingent of participants that were present was an international bunch with the largest number of them coming from the United States. Kicking off the programme on day one was Jacob Harpaz who stressed on Iscar’s goal to provide customers with the latest technologies to bring down costs. “The new products create magic for our customers by improving technology and lowering production costs. Iscar’s strategic philosophy is ongoing R&D that drives our business growth. As soon as we introduce to the market our newest tooling families, another team from the R&D division focuses on designing tools that will compete with these latest tools. We basically never stop innovating.” Coincidentally, Jacob is a man from the ground, who has worked producing these tools before rising to the position he is at now.

Taking A Stroll Through Production Excellence

On both days of the seminar, we were treated to tours of the Iscar facilities and taken through the processes on how different tools were manufactured. Each cutting device goes through an extremely stringent checking process right down to the last millimetre. A very interesting innovation seen in the production process was the use of smart robots at one part of their facility to transport parts and pieces from one part of the shop floor to the next.

Moreover, Iscar takes the security of its production know-how very seriously especially at some portions of the installation where engineers were required to surrender their mobile devices. This is done to 1) protect the engineers from accidentally causing an accident that may endanger lives and 2) ensure accuracy in their work because in such a business, the margin for error is near zero.

The many demonstrations include those that showcased their hole making, gripping and turning systems as well as the introduction of new grades – all designed and made to increase cost efficiency in customers’ plants. There were countless very good demonstrations across all product ranges that definitely convinced the contingent about making further investments in Iscar products.

At the end of the seminar days, participants were taken to dive into Israel’s rich history that predates many civilisations today. Participants even dined at a port that was named after Julius Caesar (most famous dictator of Rome) called Caesaerea with the couple of thousand year old preserved ruins all around us. In the end Iscar gave the participants not only the good news that in the ever increasing challenging economy, new cost saving innovations were available, but also a side of the beautiful country of Israel that not many will get to see in their lifetimes.

A Five Star Performer

Following the successful introduction of the Penta 24 and Penta 34 inserts, Iscar has recently introduced the latest evolution of the renowned Penta family.

As the Penta prefix suggests, Iscar’s advanced new parting insert boast 5 cutting edges. Penta -IQ-Grip inserts, available in 2 and 3 mm widths, are ideal for parting up to a 40 mm part diameter or up to a 20 mm depth of cut.

An innovative dovetail wedge clamping system ensures very stable Penta IQ-Grip insert clamping, secure edge indexing and rapid insert replacement. In addition, the robust structure enables the application of high machining parameters, resulting in much reduced cutting time.

As well as delivering significant performance advantages, Penta IQ-Grip provides excellent straightness and surface finish characteristics in parting applications.

Penta -IQ-Grip outclasses all other self/screw clamping mechanisms currently available. Also, when compared to competitors’ parting inserts that have more than two cutting edges, Penta IQ-Grip provides double the depth of cut.

The new Penta -IQ-Grip is able to outperform other manufacturers’ single, double or triple-edged inserts for grooving and parting applications.

Penta -IQ-GRIP assures prolonged insert tool life, at least double that of single, double or triple ended parting inserts. Penta -IQ-Grip inserts are available in three sizes for parting: D22 (up to 22 mm part dia), D32 (up to 32 mm part dia), and D40 (up to 40 mm part dia).

D22 and D32 mm sizes can also be used on Swiss-type and small CNC machine tools.

All inserts feature C- and J-type chipformers to accommodate a wide variety of machining and material applications. Penta -IQ-Grip is produced from grade IC808G; a hard, fine grain substrate with excellent chipping resistance, whilst a TiAlN PVD coating provides impressive wear resistance.

A Chat With Jacob Harpaz, CEO of Iscar, President of IMC Group

1. Has the vision shifted from Stef (Wertheimer’s) to somewhat something of yours or has that ethos remained?

We have a very unique company culture and I had the pleasure of working very closely with Stef and then his son Eitan, later on, in different roles – from an engineer to that of a sales manager and then serving with the executive management. Even after the sale to Warren Buffet, I can assure you that the original philosophy of the company remains the same. We are proud to say that because of our very strong work culture, we have a very high percentage of people that have stayed for twenty years or more and honestly if you do ask them about the sale of the company, they would tell you that it was work as usual.

2. What are the future directions of cutting tools development, and what are the market expectations in the next two to three years?

The rapid increase of manufacturing in China and India is the main catalyst for US, European, and Japanese manufacturers to search for more efficient production methods in order to compete with them. Iscar (the IMC group) has given special attention to fast growing markets in the Far East and Asia by building modern production facilities in those regions. This is in order to be close to the customers and provide them with the same quality of tools that we provide our customers all around the world – with dedicated sales and engineering personnel in each country. Iscar sees itself as being its own number one competitor and strives to continue to innovate and add value to the industry. Currently we hold the number two position within the metalworking industry.

3. How much revenue of Iscar comes from the Asia Pacific?

Well we have TaeguTec in Korea and Tungaloy in Japan and these companies serve mainly that area just like Ingersoll serves customers in Europe mainly. I would say roughly about a third comes from the Asian market. As mentioned earlier, China is still the main driver behind how well the heavy industries like the automotive sector, does. With that, how things go in that market will determine how well our sales in the metal cutting and removal tools does, really. It is true to say that with the current downturn of the global economy, the consumption of machine tools is down in that area.

But however, we are constantly watching other markets and India, which previously was rather dormant, in my opinion, it has awakened and we are looking to explore that market more keenly. What goes on in the ASEAN region for the demand in cutting tools, let’s say the automotive industry in Thailand – that is very much dependant on the major markets like China, India and Japan. So if it is slow in these major markets, then things do slow down in these markets too.

4. What is considered as the top product among Iscar tools?

Machining intelligently is Iscar's way of thinking to promote new tool developments for increased productivity. Our customers know that they can rely on us as the bottleneck opener of the metalworking industry. The many milestones that Iscar has created over the past 40 years are legacies within their era, always just slightly ahead of their time. Iscar's renowned trade names such as Self-Grip, Tang-Grip, Helimill, TangMill, HeliTang, Multi-Master, ChamDrill and SumoCham paved the way for the new IQ products which were recently launched. Our focus is to constantly reduce machining costs, with the R&D team concentrating on tool developments characterized by more complicated and accurate shapes. The new High QLine products such as Penta-IQ, Dove IQ Grip, Tang-Grip IQ, Heli IQMill 390, and Dove IQ Turn can be applied to faster metalworking applications and have already proven their ability to cut production costs.

5. What are the functioning departments of Iscar?

Iscar has several divisions of which the most dominant is the production division. The processes are all in-house to enable a high level of competence and quality assurance demanded by the market. In essence Iscar manufactures tools and inserts from scratch, i.e. from raw materials to the finished product; with the highest level of quality assurance.

6. What are your thoughts on the role of R&D in your company?

I believe that R&D is the thing that drives the company and I would like to think that I am still the force behind it, giving the direction and vision to Iscar and the IMC Group. We are doing is investing up to six percent of our total revenue in R&D, which mind you, is quite a sizeable portion dedicated to a single area. Initially, upon acquiring more companies, they were replicating some of the existing tools so thus there was potentially some duplication in our offering but because I was overseeing the processes, I insisted that there be innovations so as to have useful differentiation amongst the different offerings – it was a chance to step up and give more to our existing customers. Hence I would like to say that we are always very aware of the existing market offerings and with our aggressive marketing strategy, we look to always be staying ahead of the competition.

At the end of the day we pride ourselves on what we put on the table to offer our customers. If you look around the industries that we serve, you will know that the people there (in those industries) rely and trust our brand. In return, I think it is our duty, above and beyond just simply the money to deliver a continuous, innovative product line to serve their needs. This would mean consistent cost reductions as the market conditions get more challenging and to always try and stay ahead of their competition. You could say that in more than some senses that we are our customers' partner like an ongoing relationship. At our end, that thing alone keeps the sales robust and I would like to think that about half of our sales are based on that goodwill that has been carefully cultivated over the years. Like you will always hear our product engineers and sales managers say: our customers can and will always know that we are reliable around the clock to assist them with their problems, eliminating as much downtime as possible.