Long-term success instead of short-term profit

ZKG INTERNATIONAL asked Dr. Christoph Beumer, managing partner and chairman of the executive board of the BEUMER Group, about the company strategy, the behaviour during the crises and seminal technical developments.

ZKG: What company strategy enables a company to operate successfully for many years?

Dr. Beumer: There is certainly no patent recipe that helps companies to operate successfully for years, and this applies equally to all companies. However, I can tell you the basic principles that have helped our company to grow continuously and healthily over the 75 years. The most important basic principle is that we are a family concern. This means that for us the aim is not short-term profit but long-term success. This leads directly to BEUMER’s second basic principle: we operate and trade sustainably. Sustainability is not a fashionable buzz word for us – we understand the term in its original meaning: the balance between ecological requirement, economic success and social responsibility. In specific terms this means that we not only offer products and solutions with which our customers can save energy but that we also deal extremely responsibly with resources of all types. It also means that from the start we involve our employees in all operational processes, that we take great pleasure in innovation, invest heavily in research and development and keep our marketing colleagues in constant communication with the engineering department so that the development work caters for the demands of the market. This is the basis of our forward-looking orientation. We want to grow in a controlled manner, extend our wide spectrum of products on offer and become even more global. This will secure the long-term success of the BEUMER Group.

ZKG: Which products have made particular contributions to stable growth?

Dr. Beumer: Right at the beginning, the development of the three-dimensional loading machine for loading cement bags onto lorries was an important milestone. This gave the workers significant relief from physical work. We then developed this loading machine to full automation. Later this gave rise to the static palletizer. In a completely different field there is non-contact power transmission. This technology continues to give us major competitive advantages in sorting and distribution technology. Another milestone was the bucket elevator. My father was heavily involved in pushing ahead with this development. Replacement of the chains by high-grade steel cord belts was a groundbreaking step. By using belts we can now manage distances between centres of more than 175 m. In packing technology our customers protect their palletized loads effectively and also competitively with the BEUMER high performance stretch hood^® packaging machine. And recently we have installed a troughed belt conveyor system in China that is 12.5 km long and crosses hills and valleys.

ZKG: How and when did the company adjust to the crisis?

Dr. Beumer: Naturally, we also felt in 2009 that the overall economy was not running as smoothly as it had in previous years – especially as 2008 had been the record year so far in our company’s history. But we survived 2009 well. We stayed in the black and have not had to lay off any of our employees. In fact we did not let 2009 worry us. Because of the reduced project situation we used the year as an opportunity to concentrate on our future and to do our homework. One part of this homework was to integrate Crisplant and KOCH Holding a.s. The economy is now rallying again and we will be able to concentrate better on our customers – which will also entail growth.

ZKG: What are your plans for the future?

Dr. Beumer: For the future we plan to set ourselves up even better and with greater presence worldwide with a strong internal network and strong internal standardization. This will ensure short decision paths and rapid execution, and will help us react even better to our customers’ requirements. This process has already been taking place in our company for some years and is not by any means finished – improvement and onward development are continuous processes. My aim is to set up the company so that it can operate stably in the long-term with our three company sectors in different industries and international markets. When I have achieved that I will be able to retire gracefully and pay even more attention to my favourite football club FC Schalke 04.

ZKG: What is the position of research and development in the company’s history?

Dr. Beumer: Innovation has always been one of the important factors in our company’s success and nothing is going to change there. For us innovation means that we not only bring out new products or develop existing solutions still further but also, and in particular, that we keep an eye on what will bring substantial benefits to the user and what is marketable. To achieve this it is necessary to proceed strategically with the development work. We are developing in many different directions to maintain and extend our market position. This mainly concerns basic development in which, for example, we are always making further improvements to the belts and chains. However, an important part of our development work also takes place in relation to specific projects. We have a great deal of expertise and experience in this field. This means that we really know what we are doing when we design and then also install such extensive conveying systems for such a demanding terrain as we have just done in China with the 12.5 km long belt conveyor system. Our local experience and the high quality of the components that we used there also prove advantageous. We can really rely on the support rollers, frames and belts, otherwise we just would not be able tackle such projects.

ZKG: How does Beumer ensure that experience and technical knowledge is passed on from retiring employees?

Dr. Beumer: Many employees spend their entire working life – sometimes 40 or 50 years – at BEUMER; they are part of the BEUMER family. They have a wide range of expertise because they have developed innovations in widely differing fields and have virtually grown up with the company. When it is clear that anyone with this type of expertise is retiring we look at an early stage for a successor – either from our own ranks or from outside – who can spend a lot of time with the experienced colleague and gradually acquire their knowledge. In addition to this, when employees retire they are still available to us with help and advice. They still come and visit us and if problems become acute we can also contact them at home. Just as with a family.

ZKG: What measures are being taken to ensure that you continue to have sufficient experts in the future?

Dr. Beumer: We rely heavily on education and training. It is no good if the entire world complains that it can’t get hold of skilled labour but everyone expects someone else to do something about it. For example, we train young men – and also young women – in classical manufacturing occupations and then provide them with qualifications through appropriate assessment so that they can contribute later in areas such as construction or marketing. For trainees with high development potential we provide shortened occupational training followed by a course at a technical college that we assist with a bursary. We place great emphasis on further qualifications for employees. We prepare young people for future management tasks or we impart skills so that they can operate with confidence in international surroundings. These are just examples. We look after students before and during their studies with internships so that they can get a real feel for their future occupational field. After their studies we support them during their theses and in various international trainee programmes. We also support programmes in various associations that help more students to become involved with technology so that they can have a technical education. Just as an example, together with Deutsche Messe (the German Trade Fair Association) and the VDMA (the German Machinery and Plant Manufacturing Association) we invite school leavers to the CeMAT intralogistics trade fair and provide them with a comprehensive programme so that they get a good idea of the prospects that conveying technology can offer them.

ZKG: How are the employees included in the company development?

Dr. Beumer: Employees at BEUMER are members of the family. This means that we always give open and transparent reports about what is actually happening and how together we would like the company to develop. It also means that our relationship is based on a high degree of mutual trust. The employees can develop freely and follow up their ideas. This provides far more motivation than if pressure were applied “from above”. This approach can only succeed through mutual trust.

ZKG: Which markets have current and future potential?

Dr. Beumer: The growth markets continue to lie in the BRIC countries, i. e. Brazil, Russia, India and China. As an example, when we entered China a few years ago the country produced about 700 million tonnes of cement per year, but this figure is now around 1.2 billion. About 20 production lines are being built in China per year, compared with one every five years in Europe. This is why we have had our own manufacturing facilities in China for some years. India, as well as Brazil and Russia, are also markets with great potential for growth. Our advantage is that we have been present on the spot in these markets for some years and have served our customers well. We profited from this head start when the economic situation deteriorated and we naturally intend to maintain this advantage and extend it further.

ZKG: What is the ownership structure at Beumer?

Dr. Beumer: BEUMER is a family company. This means that all the shares are owned by the family and cannot be sold. Thankfully, this means that we can act and control the company independently. This has all been clearly regulated in a contract since the start and ensures the future of our company.