Siempelkamp CEO Dr Martin Stark has done his fair share of video meetings in the past eight months since taking over the helm of the company.’
Dr Stark, a Swabian who says he is cautiously optimistic about 2021 business prospects, was appointed Siempelkamp CEO in June last year with a mandate to help the company “rediscover its old strength” and is excited about what he says is a targeted, gradual transformation of the company. Krefeld-based Siempelkamp is, of course, a global active technology supplier with a focus on three main divisions: machine and plant engineering, foundry technology, and engineering and services. Its origins can be traced back to 1883.
Its machine and plant engineering division is a major systems supplier of press lines and complete plants for the wood-based panel industry, the metal forming industry as well as the composite and rubber industry. Wellknown subsidiaries include Büttner, CMC Texpan, Pallmann and Sicoplan.
Dr Stark was chairman of the Siempelkamp supervisory board (2017-2020) before taking over as CEO.
“This means that I have been close to what the company has been doing for four years,” Dr Stark said.
In some respects, Dr Stark says his taking the helm at Siempelkamp during the coronavirus pandemic mirrors an equally uncertain global environment when he sat on the management board of global technology group Freudenberg during the economic fallout of the collapse of investment bank Lehman Brothers.
“During the Lehman crisis we made similar changes we thought we needed for the future and came out of the crisis stronger than expected,” he said.
Covid Pandemic
Dr Stark said he first became aware of Covid-19 from Chinese colleagues. He had been in China holding meetings with colleagues in the south of the country just before the Chinese New Year at the end of January, 2020.
“My Chinese friends told me there was something going on, so they were already aware of coronavirus, but even they did not know what was to be coming in the weeks that followed.
“Then one week after returning to Germany all the negative messages popped up from Wuhan. Even for them it was a shock and surprise and you can imagine how the shock here was.
“A lot of German companies acted very fast and so did Siempelkamp. We established a Covid-19 taskforce at the beginning and we focused on social distancing and good hygiene.
“Then in Q1, 2020 when the first wave started, we established home office working and we supported staff with equipment. In some areas it is not possible to work in home offices, so there we established a two-shift operation so there was no overlap.
“At that time we had one or two employees testing positive, with the infection coming from their family members, not from within the company. For the second wave we established the mask campaign and reduced staff congregating in some critical areas, such as elevators.”
Rejuvenating the Siempelkamp brand
There is a saying that in times of great challenges there are also great opportunities. Siempelkamp agrees and is using this time to focus on improving in some key areas – boosting innovation, becoming stronger in the Chinese market, making full use of digital communication and becoming leaner and more efficient across its operations.
“We set up our strategy, which is very simple – Siempelkamp has to go back to its old strengths,” Dr Stark concluded.
“We needed to be better at innovation so we are boosting this, secondly we have to be stronger in China.
“We were one of the first in the engineering sector that started with sites there, but we have to boost our business there. We also established new management and an investment programme there.”
Siempelkamp has an increasing migration of contracts to China, estimating that close to 50% of its market is shifting to Asia.
It finds that the middle segment of the Chinese market is highly cost competitive with Chinese suppliers for press sizes of 4-8ft width and a length of around 30m.
“We lost in this segment in 2017 and 2018 but we are now gaining back business there.”
“We’ve also been strengthening our site in the Czech Republic where we have engineering and production. So, it is a transformation and strengthening of our international organisation.
“Now we have the pandemic crisis, so we have time to restructure, transform and make all the changes.
In 2017-2018 we had great years and were so busy with customers and projects that there was no time to do this.”
Siempelkamp finished a period of restructuring in December, which resulted in the loss of 160 employee positions in Krefled, Germany.
“We have had to become better and faster in our business execution. Siempelkamp is a great brand but it is also an old company, so sometimes a boost is needed.”
Siempelkamp’s restructuring and new vision follows a period in the global woodbased panels industry (2019-2020) when business for new panel manufacturing lines has been weaker, even before the onset of Covid-19.
“We already saw a decline in order intake in Q4, 2019 and if you look to the figures of the VDMA (German Engineering Federation) you see clearly a decline from 2018. This drop was hit further by Covid in the first half of 2020, which affected us.
“I would not say the customers were over-invested but they already had many investments so they slowed down in 2019 and then Covid came.”
Siempelkamp noticed business enquiry levels started picking up again from the middle of 2020, and accelerating in Q4. Regular contact with global customers during the pandemic reveals that their wood-based panel plants have been running at full production.
“They did not have time for upgrades and modernizations that would have caused down-times because they had to keep their production lines running. But work on projects had already started and there are enough projects in the market now to keep us busy,” added Dr Stark.
“In terms of projects, we gain some and we lose some, but overall there is not any change in the market share of panel production equipment supply.
“We have new orders in China, Turkey and Russia,” said Dr Stark.
“We are currently working on first designs and construction for these, while the order intake for Q4, 2020 is not published yet.
“So, overall we see a decline but the situation is better than I feared and for 2021 I am optimistic.
“We reduced our expectations in 2020 but now our business is coming back and we have changed our strategy.”
Siempelkamp is currently in advanced talks about a further project in South America, while other project orders to have been signed in recent times include last September with Guangxi Xiangsheng Household Materials Technology Co Ltd and Jiangsu Shuntian International Group Machinery Import and Export Company.
The equipment purchase agreement with Siempelkamp is for a production line with annual output of 300,000m³. The first board will be produced by the end of September 2021.
The plant includes a ContiRoll Generation 9 press measuring 8.5ft x 40m.
Equipped with five forming heads, it offers production capability of OSB, light OSB, fine surface OSB and load-bearing special purpose PB, underlining recent trends and local market requirements of hybrid boards and increased production flexibility, combining the strength of OSB with the lamination possibilities of conventional particleboard.
The plant includes Siempelkamp’s Universal Flaker, a key factor for the customer’s decision, which makes it possible to use more economic wood assortments, resulting in boards with good mechanical strength and low weight.
This process, Siempelkamp says, allows the usage of smaller log diameters below 80mm and other wood assortments that would not be suitable in the traditional two-stage process with knife ring flakers.
The Ultimate Flaker attracted a very positive order intake at the WMF exhibition last year.
Turkish producer Starwood has also signed a new contract this.
Another project of note was the official opening in September, 2020 of one of the most modern particleboard plants in Europe – Klaipedos Mediena’s (VMG) 660,000m3 capacity plant in Akmene, northern Lithuania. It is now the third greenfield particleboard plant that VMG has ordered from Siempelkamp.
Alternative Raw Materials Trend
Dr Stark said use of alternative raw materials to manufacture panel products is also a big focus and can be seen in several Siempelkamp projects.
Siempelkamp planned, designed and supplied the entire machine technology for the CalAg, LLC/CalPlant 1 in Willows, California, which utilises rice straw to make fibreboard of 2-30mm thickness.
Annual production capacity is 250,000m3 and the plant has been ramping up production rates.
More recently (in February, 2020) Siempelkamp signed a supply deal with Wood Technology Co (WOTECH) in Egypt. The contract for an MDF plant with an annual production capacity of 205,000m3 will use 100% rice straw as raw material.
The equipment has been shipped and erection is due to start soon, with the first board likely to be produced by the end of 2021/start of 2022.
“We are definitely focused on all the issues of sustainability and it starts with the material,” said Dr Stark.
“The raw material source – wood – is getting weaker and we have to think about recycling wood and focus on alternative materials like rice-straw and others.
“I’m sure we can push for further projects, because this is a hot issue for us.”
Overcoming Pandemic Restrictions
Some of the challenges presented by the pandemic include plant commissioning, travel and communications.
In every case there has been a solution, with new ways of doing things – principally using virtual and remote communications.
“There have been some challenges with plant commissioning during periods when people could not travel – for instance to the US, but later the US opened some doors for us which means travel, testing and quarantine,” said Dr Stark.
“In some cases, people can’t immediately enter the plants, so there are some drawbacks.
“Before the crisis, our sales people said they needed to travel to the customers, but this has now changed completely.
“First of all, during the crisis we thought we might lose contact with customers but we learned how to keep it, how to bridge the distance.
“I’m sure we need more travelling after the crisis, but there is no need to have every meeting physically.”
Use of digital communications is a high focus area for Siempelkamp’s marketing and communications team. It has joined the Virtual Reality Business Club based in Berlin.
It participated in the virtual International Fibreboard Conference last year and has developed its own digital communications to bring a human, personal touch with discussions, presentations, training and streaming.
The Siempelkamp service team uses all of this, not just relying on publishing animated videos for customers.
This digital suite has also been developed to augment Siempelkamp’s attendance at exhibitions, particularly as Covid restrictions may prevent some customers from attending events or spending much time physically on stand.
The Ligna exhibition in September will be a major focus for its joint physical / digital approach to connecting with customers.
“Ligna is a big event physically where customers come and meet us,” Dr Stark added.
“Of course, we need that but we are also prepared to do a lot in virtual rooms with digital presentations. Here in the woodbased panels industry we are adapting very fast.”
Meanwhile, Siempelkamp has established an EDI (electronic data interchange) interface with one of its biggest customers for fully automatic spare parts ordering and direct shipping.
“The crisis has pushed this approach forwards,” continued Dr Stark.
“Our engineers can assist customer production commissioning and optimisation remotely by being able to log into data of machines thousands of kilometres away.
This means we only need small core teams on site.
“Customers are accepting this now but two years ago they were very reluctant for us to get access to the data. This has now changed.”
As we start 2021, Dr Stark is hopeful of personal, physical contact with customers again in the not-too-distant future.
“I do not know how fast the business will come back but the project list we have at the moment makes us cautiously optimistic. From the order side we are quite optimistic that things will come back in 2021 almost to the old level.
“Siempelkamp is known for technology leadership and premium equipment – this is our battle cry!”
