FLSmidth – internationally the group faces every challenge

In mid 2013, Dr. Thomas Schulz was appointed as the new Group CEO of FLSmidth & Co. A/S. ZKG INTERNATIONAL had the opportunity to meet with him at the group‘s headquarters in Copenhagen and to talk about education and company targets.
Thomas Schulz: What language should we use?
ZKG: It‘s up to you, but we are not very good at Danish! Are you?
Schulz: No, not at all. I grew up with German as my native language and, because of the proximity to France, I also learnt to speak French quite well. At school, I added English. Since my university studies in Aachen and in my professional life, English has become my main language. My children now also speak Swedish. Here in Denmark the language situation is similar to Saarland and one learns to be open. In addition to the TV programmes, which can be achieved from the neighbouring countries, the children are picking up various languages, which quickly get mixed with English. But there are also many German influences, and these are even reflected in company names.
ZKG: Are those only linguistic influences?
Schulz: No, not only. The Germans have the repu­tation of training good engineers and technicians, while the English-language education system is very much focussed on economics and marketing. With regard to technical terms, the German language is more comprehensive and precise. You can also notice that in discussions and publications. ZKG, for instance, is a specialist magazine that I was already reading during my studies and AT was naturally added during my time at Sandvik. As an engineer, both magazines appeal to me and I know what the subject matter is about.
ZKG: In your opinion, what background do students need today?
Schulz: If they want to work in this sector of industry, they certainly need to have done a course of study in a technical discipline. In the mid 1970s Germany lost her technological lead because of a political aversion to industry. Students today are still suffering from that aversion, which culminated in the abolishment of diploma courses. MBA graduates do not have any advantages. They are ultimately left alone with a “half knowledge” that is not adequate for either an economic or an engineering career. They have been robbed of opportunities.
ZKG: Do you see any signs of this being reversed or of good alternatives being presented?
Schulz: Yes. The RWTH Aachen University has reacted by providing a bilingual engineering course.
ZKG: Hopefully it‘s not too late!
Schulz: I think that German universities should sharpen their profile and not always “go with the flow”. In 1990, for example, the German coal mining industry went into a state of crisis. This situation had ramifications that reached right into the German high schools, because the mining industry was no longer attractive. As a consequence, hardly any students took up studies on this field. Today, we are lamenting that there is a lack of specialist knowledge and the lack of skilled employees on the mining sector, even though the worldwide demand for raw materials is growing constantly.
ZKG: That is why ZKG INTERNATIONAL is now also offering special field study trips for students, for instance in collaboration with the RWTH Aachen, that take place at cement factories and provide the student with a deeper insight into the work involved.
Schulz: The labour market and the requirements on employees are developing further. Anybody wanting to start an international career has to be familiar with process structure and process cycles on the one hand, and with financial matters on the other hand.
ZKG: How is FLSmidth situated in this international environment?
Schulz: FLSmidth is a strong global brand and enjoys the high esteem of customers all around the world. Our business model covers not only the sale of individual machines, engineering or plant commissioning, but also includes plant operation and maintenance. This O&M concept is a unique selling point and strengthens our customer loyalty. A customer can contract us to operate and take care of his plant for a period of, for example, up to five years.
ZKG: Only FLSmidth plants?
Schulz: No, our specialists are able to operate all plant components, and also all integrated cement plants supplied by other companies. Due to the fact that ­FLSmidth has always been an internationally set-up and open company, we have no problem with meeting any challenge anywhere in the world.
ZKG: You have just published your Q2 report and accounts, in which the intention is stated to make adjustments in the firm‘s organic growth and to integrate acquired companies and improve quality and safety, R & D, human resources and business development. What measures are being taken here?
Schulz: Viewed soberly, the prospects are nothing special: we are in a continuous cycle of ups and downs. At the moment, we are not sure whether we are just about to reach the lowest point or have already passed the lowest point. We are well positioned anyway. And we are optimistic, because we have in any case proactively suitably adjusted our business model. We are competent, customer-focused and competitive. And so our circle closes. For about five years now, we have been training our employees and junior engineers in our worldwide training centres as knowledge holders. We are therefore well-equipped to face future challenges. In difficult times, our customer can focus on their core competence, and we can focus on ours. Taken together, this produces an added value that benefits everyone. Ultimately, we even benefit from the fundamental Danish philosophy of “Value Setting” and “Soft Skills”, in that we respect our customers all around the world and react flexibly to their wishes.
ZKG: And can you even do that at short notice?
Schulz: We even support our customers by means of a so-called “ICE-Room” - “Intelligent Collaboration Environment”. When we receive a call for help from any corner of the earth and know what problem is involved, we can call up all the required experts via the ICE room, link up on the control screen and also send in local staff equipped with satellite telephone and helmet camera in order to see the situation for ourselves.
ZKG: Is that your O&M concept?
Schulz: Part of it. Our employees travel around the world almost 200 days in the year and have lots of discussions with customers in widely differing cultures. Therefore we are always aware of what is important to our customers.
ZKG: Are you considering any expansion of your business areas?
Schulz: No, we only ever make promises that we can keep. For example, it makes no sense to think of other means of producing electricity above and beyond WHR if the customer intends to concentrate on the cement business. In our portfolio, we have companies who are absolutely capable of meeting every wish expressed by our customers. As already mentioned, we currently see the need to consolidate and make sure that we achieve healthy growth. We have no particular geographic orientation – we go where the customer needs us. We exclusively follow the fundamental idea of the process line and the service philosophy. We identify the problem and offer the solution. We receive an order and execute it quickly – that is how partnerships are created. Even if a customer experiences financial problems, negotiations with the banks proceed more smoothly if the name FLSmidth is in the background. That is certainly a kind of quality hallmark, as we have a good reputation and are on the banks‘ positive list. We aim to have a lean organization that is highly efficient and can offer customers the best solutions for their needs – the more rules there are, the more problems you have with structures. Our people are intercultural engineers!
ZKG: Many thanks for your time and for the very interesting conversation!

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