“Mutual confidence is an essential part of our corporate philosophy”

Since 1.1.2010 Claudius Peters, the cement plant and ­materials handling specialist for coal grinding systems, coal injection plants, alumina handling, gypsum calcining systems and silo & pneumatic conveying systems has a new Managing Director – Mr. Reiner Fruehling. ZKG INTERNATIONAL met Reiner Frühling and spoke with him about his new position, his visions and the development of Claudius Peters.

 

ZKG INTERNATIONAL: You took over as CEO in January 2010 – what were the main milestones in your own career?

Reiner Frühling: My background is that I am a university-qualified process engineer, I finished my degree here in Hamburg in 1978. For a year I then worked in another industry, and started at Claudius Peters in 1980 – something different – I went into the Design department, and well-founded technical knowledge was, of course, very important. I then became head of the design team for coal and gypsum grinding systems, and then head of the Design department as a whole. After a few years on the technical side, I transferred to Sales, and took over responsibility for international marketing of our grinding systems – this had always been my main technological focus. I have always had a great deal of contact with customers, so the changeover was not difficult. I was offered the job of sales and marketing director for cement and steel technology in 1999, and then overall sales director for all CP products when Langley Holdings took over in 2002. I worked there until being appointed CEO – this was a classical “in-house” development, something which is becoming rarer and rarer these days, in general, but is still typical of CP. We consciously try to give young people good opportunities for their development within the organization, because they then identify closely with it – our very low rate of staff fluctuation is the proof.

 

ZKG INTERNATIONAL: What are your aims and visions as CEO?

Reiner Frühling: My overriding aim is to ensure that Claudius Peters survives this international economic crisis unharmed, and remains in profit. I put my faith in continuity in our business, the results demonstrate that our management policy up to now has not been a bad one. We will continue economizing, and we will not be living beyond our means.

I see good development potentials for Claudius Peters in Eastern Europe and Russia, in India, China and the rest of Asia, and also in the USA and Canada, so these will be the focuses of our market developments.

On the technical side, I envisage Claudius Peters’ products continuing to have a first-class reputation around the globe, and that our customers continue to show their appreciation by ­buying from us!

ZKG INTERNATIONAL: What is particularly important to you in the practical management of Claudius Peters?

Reiner Frühling: We give our employees a lot of responsibility, and thus put great trust in their abilities. Mutual confidence is an essential part of our corporate philosophy – critical comments must be possible! We also have a company suggestion scheme – something which is extremely helpful – and this has led to many good ideas being taken up and developed. I also think it is extremely important to give employees potential for development within the company, because that also assures continuity, which is extremely important at CP.

 

ZKG INTERNATIONAL: What is the corporate strategy that gives a company like Claudius Peters its many long years of success?

Reiner Frühling: Our successful market activity, over more than a century, has been based, primarily, on innovative products with a high market awareness rating, and on mutually confident cooperation with our customers. From the very start, we have always devoted particular attention to designing machines and systems whose efficiency in daily operation and quality meets the customers‘ ever increasing demands. We know we have nothing to fear from benchmarking comparisons. Despite the cost-pressure on the world market today, Claudius Peters has never relinquished its claim of supplying high-quality innovative products. Our declared intention is to retain the lead in the coming decades, too.

 

ZKG INTERNATIONAL: And what are the underlying principles of the Claudius Peters corporate philosophy?

Reiner Frühling: This is best illustrated by our internal philosophy, of: “providing world-class engineering solutions to world-class clients, building mutually beneficial long-term relationships”.

 

The aim, in particular, of building long-term business relations that are beneficial to both sides presupposes a high degree of honesty, plus continuity and reliability. Only satisfied customers come back to the same supplier, and they are, therefore, the decisive factor in long-term success.

 

ZKG INTERNATIONAL: How is this achieved, jointly with the employees?

Reiner Frühling: Within the company, we maintain a work culture that permits each individual a large degree of freedom for self-development and initiative, but also demands a high level of responsibility. This is how we promote motivation within the company. We consciously encourage team-thinking, but we do also have clearly defined responsibility structures, of course. Claudius Peters has always invested continuously in the development of new products and refinement of existing ones. Our team-work approach has produced particular benefits in this respect. Our teams are made up of developers, designers, production specialists, automation experts, to mention only a few disciplines.

We also pay a lot of attention to good technical and commercial risk management.

All the same, we are always aware that errors can happen in the context of everyday work. If there are mistakes, we think it is most important to learn together from them, to prevent repetitions. We operate an “open door” policy – everyday work problems can often be solved more quickly by a short conversatiton than by endless e-mails.

ZKG INTERNATIONAL: What have been the milestones in your company history?

Reiner Frühling: In technical terms, there are quite a lot of milestones we should mention:

 

As early as the late seventies, Claudius Peters developed gypsum calcining systems that incorporate grinding and calcining of the gypsum in a single machine, the CP EM mill. This process is still the leading method in the world for calcining systems for production of drywall panels.

 

Secondly, the Claudius Peters name has always been directly associated with clinker-cooling technology. We were the first to develop roller crushers for clinker – a technology which has become established around the world for higher-output coolers. The development of the ETA cooler marked yet another milestone in clinker cooling. The ETA is a fourth-generation clinker cooler, and is notable for maximum availability, maximum heat recovery, and minimum spares requirements. Also – a complete innovation in clinker-cooling technology – the number of parts that come into contact with the clinker has been reduced almost to zero. The results are extremely long service-lives and the almost total elimination of wear parts. Forty-three ETA coolers have been sold since the market launch in 2004, and these successes confirm that our development strategy is the right one.

 

Another milestone was the development of the expansion-chamber silo – this technology has been impressing ever more customers around the world for many years. Expansion chamber technology means that optimum extraction behaviour from the silo is assured even after several years of operation. Expansion – or depressurization – of the cement before it leaves the silo minimizes the potential wear on the extraction elements.

 

I would also like, at this point, to mention the development of the FLUIDCON conveyor system. This is inspired technology that is capable of achieving energy-savings of 50  % compared to conventional pneumatic conveying methods.

The examples I have mentioned give only a brief outline of the most important milestones. They do show, though, that innovation and the continuous development of our products are high priorities at Claudius Peters.

 

ZKG INTERNATIONAL: Which business sectors have made particular contributions to stable development?

Reiner Frühling: Claudius Peters realized very early the importance of exploiting synergies and of supplying a mix of different industries – we now mainly supply five different sectors – cement and building materials, gypsum, aluminium, steel, power generating plants, and coal and minerals crushing and grinding. We realized a long time ago that this broad spread pays off. The cement and building materials industries still account for the major part of our activities, but all the other sectors mentioned also make significant contributions to our success.

 

Take our activities in the steel industry, for example, where we supply complete coal grinding and injection systems for blast furnaces. These are extremely complex, in some cases, and they make maximum technological demands in terms of operating reliability, availability, coal-distribution accuracy to the burners, and so on. Claudius Peters is the only company in the entire world market that can supply all the necessary processes from a single source, starting with storage of ROM coal, via grinding and pneumatic conveyance, through to distribution to the burners.

 

ZKG INTERNATIONAL: What unique selling propositions distinguish Claudius Peters?

Reiner Frühling: Our most important USP, in my opinion, is our Technical Centre, the cradle of our in-house developments, equipped with its own important processes and machines. We use it to test new developments on an industrial scale, before taking them to the market. As a side-effect, we can also offer our customers the opportunity of testing their product on our machines – we have the capability to test industrial-scale pneumatic conveying systems up to 600 m long, just as an example. The Technical Centre includes a bulk-materials laboratory, where we analyze all the bulk products sent to us – our bulk-materials data-base now covers more than 10 000 different substances, which is unique within this industry. Big industrial corporations often contact us with requests for detailed analyses of unusual products.

Another innovation is our extremely close cooperation with the universities in our region. We are continuously supporting students who perform analyses and tests at Claudius Peters as part of their Bachelor‘s or Master‘s degrees.

We are also particularly proud of our own production. Our core products are made and tested at our site, which guarantees constant high quality and prevents complaints.

Finally, we should also mention our internationally structured network of companies and agencies. Claudius Peters is now represented by ten subsidiaries around the globe, enabling us to provide our customers with fast and expert support.

 

ZKG INTERNATIONAL: How and when did the company adjust to the current crisis? What is done for staff motivation?

Reiner Frühling: The first signs that the economic boom was coming to an end appeared as early as mid-2008, and we began then to take a hard look at our capacity utilization. We used our flexible working-hours model, and short-time working was introduced temporarily in a few cases. Like a lot of other companies, Claudius Peters has also reduced its workforce a little. The people affected were mainly temporary staff and employees on fixed-term contracts, who had been working for us during the boom. These adjustments, which were absolutely unavoidable, are now completed, and we closed 2009 successfully, as planned. We consider ourselves well positioned for 2010.

The best motivation for our employees is working, even in economically difficult times, for a company that is profitable and totally sound. This gives every individual maximum personal security, something which is very highly valued by our employees during the present economic crisis.

 

ZKG INTERNATIONAL: And how do your concepts for the future look?

Reiner Frühling: We still have the same main objective for the future. We intend to carry on selling first-class machinery and systems to our customers, and to remain a profitable group. Claudius Peters still pursues the aim of developing new machines and processes and introducing them in industry. In parallel, we also have the target of bringing known processes and methods into use in industries that are new to us.

The many years of experience that we have in coal-grinding and injection systems in the ferrous-metals industry, for instance, are an excellent basis for entry to the coal-gasification sector, which is developing fast. Our know-how in pneumatic conveying systems is also extremely useful to us here.

Claudius Peters will continue to pursue its objective of being the front-runner in the development of new machines and processes in our specialized fields. It is nowadays possible to find imitations of recently developed products and processes on the market, with similar features, and after only a very short time, in many cases, but the knowledge base gained during development - extending over years, in some cases - will always remain with the inventor. Luckily, this cannot be copied, and it assures our technological lead for years to come.

Alongside these technical advantages, we intend to continue close liaison with the market, to enable us to provide our customers with the best possible information and advice.

 

ZKG INTERNATIONAL: What ranking has R&D had, in the history of the company?

Reiner Frühling: We have already touched briefly on this topic in one or two previous questions. Claudius Peters aspires to the development of innovative machines and processes for our client industries. Around 5 % of our total staff work in Research & Development, and we invest a significant amount in R&D every year. In some cases, the development of a new product takes several years, when you include the necessary practical testing. Take the development of the new ETA cooler, for example. Around five years passed between the initial concept and commercial maturity. We validated the basic principle in peace in an industry with similar conditions, and with a product similar to clinker, before ever using this cooler in the cement industry. Our breakthrough in this industry, by the way, was due, to a large degree, to the innovative approach shown by Holcim – they were convinced by this new technology from the start. The lesson is that even the most fantastic development will not succeed if there are no customers prepared to take the risk of being the first to use the new product. Only customers with innovative attitudes, who are also prepared to accept part of the risk, can give the suppliers the confidence necessary to develop creative products.

Our present-day business is based most essentially on our own successful developments. And only non-stop further development will assure this into the future.

 

ZKG INTERNATIONAL: How does Claudius Peters assure the transfer of the experience and technical knowledge of employees who leave the company?

Reiner Frühling: There is, in principle, no way of preventing the bearers of knowledge and experience leaving to seek new challenges. The best defense against loss of know-how is to document all technical discoveries, and to distribute this knowledge within your organization. In addition to general technical tips for design and construction of our systems, our specialized knowledge is also stored in special design programs. This is a technical function of our product-line managers, who are also responsible for Research & Development.

We also try, of course, to operate a systematic personnel policy that will prevent only one person holding an improportionate share of the necessary technical knowledge. From the start, Claudius Peters has always provided good promotion opportunities within its own organization. We always prefer to fill vacant and new posts from within the company, and we are extremely pleased with our very low rate of fluctuation.

 

ZKG INTERNATIONAL: What provisions have been made to ensure the continued availability of a sufficient number of experts in the future?

Reiner Frühling: As I have said, on the one hand, we have extremely close contacts with universities in our region. Many of our present top performers did their degree work at the Claudius Peters Technical Centre, in many cases with the result of mutual interest which, not infrequently, led to their employment by the company. This positive situation still applies, unchanged.

We also pay special attention to our technical-service employees. They, after all, are responsible for installing and commissioning our machines and systems around the globe, and they have an enormous amount of technical knowledge. The great experience these employees possess makes them especially important for us. We are always happy if, for example, a commissioning engineer, after years or decades of working abroad, decides he or she would like to work at head office in future, and we try to meet these wishes wherever possible.

In future, we intend when appointing young engineers to try to raise their enthusiasm for firstly gathering some practical experience, before they go on to work as project or sales engineers. Our conviction is that a practical-knowledge lead like this will bring great benefits in personal and technological development. Claudius Peters also offers its employees good development potentials and, as we already noted, vacant posts are preferentially filled from within the company‘s own ranks.

ZKG INTERNATIONAL: How are employees integrated into corporate development?

Reiner Frühling: As a company bound by collective agreements, Claudius Peters naturally possesses all the obligatory bodies, such as the employees‘ council, economics committee, etc., and these keep our staff informed on all planned developments. Corporate strategy matters are firstly discussed in person with the owner, Mr. Langley, of course.

On the technical side, we have a very good company suggestion scheme which has already triggered a lot of useful developments.

Marketing, product-line management and technical implementation cooperate closely in the R&D field, analyzing markets and suggesting new developments. We then jointly approve new projects, and review ongoing ones, at joint R&D meetings.

 

ZKG INTERNATIONAL: Which markets do you consider to have potential for growth now, and in the future?

Reiner Frühling: We see good potential in a number of countries in Eastern Europe. The Russian market will also revive again very soon, in our opinion. India also has extremely great growth potential. But, from experience, we believe that this market should be serviced directly from India wherever ­possible.

China is still our most important market in Asia. We have been represented there by two CP branch offices for a good number of years, and we are also anticipating continued good business there. Two or three Asian countries, including Indonesia, ­Malaysia and Vietnam, have interesting projects, others practically none. We do not see any signs of a boom in the Middle East in the near future. Egypt and some of the North African countries will probably develop interestingly, though. We see interesting coal-gasification projects in the USA and in Canada, and the signals from South America are still positive. All in all, though, we are still expecting a lot of hesitance in investments in 2010.

 

ZKG INTERNATIONAL: What is the significance of integration into the Langley Holdings group for corporate development, and what are the effects of membership of a private engineering group on day-to-day business?

Reiner Frühling: Claudius Peters was taken over by Langley Holdings toward the end of 2001, after over thirty years of membership of a group, and this has naturally brought changes. The process took around a year, and we managed to position Claudius Peters even more successfully for the market during that time. Management structures have been modified and decision-making routes shortened. Langley Holdings has also acquired three other groups since 2002 – more than 2300 people now work for Langley around the world, and the group as a whole includes more than forty-five companies – it functions extremely profitably, and it booked sales of 425 million euro in 2009. Profit has remained virtually constant, despite a turnover lower by around 17 % compared to the previous year. All companies naturally benefit from this extremely good financial situation. In 2003, the Langley Holdings group was placed 54th in the UK list of fastest-growing enterprises, and in 2006 the group was ranked 101st among the top 250 UK companies.

We retain responsibility for day-to-day business, although we naturally discuss and coordinate special projects closely with the owner.

 

ZKG INTERNATIONAL: Which products have – or are going to – set technological benchmarks? Could you tell us a little about Claudius Peters’ latest innovations? How do you see the future of the building materials industry?

Reiner Frühling: There have been a large number of products in the past, so I will mention here only the most important developments:

 

– Hydraulic drive systems for clinker coolers

– Roller crushers for clinker coolers

– ETA coolers

– FLUIDCON conveying systems

– Expansion chamber and inspection chamber silos

– Coal-grinding and injection technology for blast furnaces

– Closed grinding-circuit gypsum calcining

 

I could, of course, continue the list of products and processes in which Claudius Peters has set the benchmark almost ad infinitum. But I think the second part of your question, on the latest innovations, will interest your readers more.

I would like to mention here two new Claudius Peters developments as examples. We have, for instance, developed a distribution system for fine bulk materials, capable of distributing mass flows with an accuracy that was never possible up to now. We see a large and diverse range of potential applications for this, in many different industries. This technology can also be used in pressurized systems without any loss of accuracy. At the moment, we expect to see applications in the steel industry, in power-generating plants, in lime kilns - wherever fine-particled materials need to be distributed as accurately as possible to a number of feed points.

In gypsum calcining, we have developed processes that will significantly improve the quality of the gypsum product; the result will be improved product quality, and worthwhile energy-savings for drying of drywall panels. These techniques also open up potentials for processing FGD gypsum and other industrial gypsum grades to high-quality end products.

 

We have no doubts that the building-materials sector will remain the key industry for Claudius Peters. This industry has always been hit by cyclical trends – I have been at Claudius Peters since 1980, and we have always talked about “a seven-year cycle”. The striking thing about this economic crisis is the reciprocal effects between very different industries – this makes clear to all of us just how globally our world is now interlinked, and how much one industry is dependent on another.

 

It will take a while before demand for building materials has risen again sufficiently to bring back full utilization of the existing capacities. Until then, we expect investments in upgrading of existing facilities, and in expansion of output and productivity. Claudius Peters is the right address for these kinds of projects, and I have no doubts about keeping our share of the market.

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