“Resilience is the new buzzword”

Christian Grosspointner has been CEO of the AICHELIN Group since March 2022. In an interview with HEATPROCESSING, he shares his insights into his first few months in the new role, the company’s strategic direction, and current issues and challenges surrounding the energy and raw materials crisis.

What were your most important tasks in the first few weeks after taking office?

Christian Grosspointner: Listening and learning. As there was a proper handover period with my predecessor, Dr Peter Schobesberger, it was important for me to ‘take in’ as much information as possible and gain a good overview of the entire AICHELIN Group. We also took the opportunity to visit all ten of our Group’s sites together – with the exception of China due to the coronavirus measures. In this way, I was able to get to know all the managers and many employees personally, and also learnt about the company’s historical development and the site-specific ‘special features’ from my predecessor whilst travelling.

What strategic goals will you set as the new CEO?

One of the most important priorities is to ensure the organisation is well-equipped to cope with the ever-faster pace of change in the operating environment. Current events show us that we can no longer rule anything out and must prepare as thoroughly as possible for all eventualities. Crises will become more frequent in the future; those who manage to cope with them better than others will be more successful. Resilience is the new buzzword. The AICHELIN Group is strategically well positioned with its operations in Europe, Asia and the USA. The task now is to further strengthen internal cooperation and to offer our customers the best solutions from across the globe. The growing expansion of our service and after-sales operations also plays a major role in this. Another very important project for our Group in the new plant installations sector is the construction of the new production site in Celje, Slovenia. There, from the end of 2022, we will manufacture all plants of the AICHELIN, BOSIO, SAFED and AFC-Holcroft brands for the European market in a joint “Assembly Centre Europe” with high efficiency. This is a major step towards future-proofing our European business and further strengthening our competitiveness.

Which growth markets will be the most important for the AICHELIN Group in the future?

Looking at current developments and forecasts, the Asian region will continue to be the strongest driver of growth. The currently very positive performance of our sites in China and India underlines this trend.

What are currently the biggest challenges facing thermoprocessing companies?

The energy crisis – particularly the supply of natural gas – as well as high energy costs, a shortage of skilled workers, price rises across almost all sectors and the requirements relating to decarbonisation are, in my view, the most significant challenges ahead.

Decarbonisation is the central issue for energy-intensive industries. How can CO₂ emissions from heat treatment be reduced and brought down to net zero by 2050?

This can be achieved by switching to electric or hydrogen heating. However, the rapid expansion of renewable energy generation plays a key role here. At present, there is still too little ‘green electricity’ to heat the plants or to generate hydrogen. Furthermore, the infrastructure required for large-scale power supply to heat treatment plants is simply lacking at present. Hydrogen would offer the great advantage of being storable, whilst allowing the existing gas infrastructure to be utilised. Conclusion: generating hydrogen from wind and solar power, and storing and distributing it via the existing gas network.

Will decarbonisation lead to a surge in investment in the industry?

I believe that as soon as the framework conditions are in place and alternatives to gas are available in sufficient quantities and at a reasonable cost, there will also be an increase in the conversion of existing plants or the replacement of old ones. Technically, this would already be possible now, but unfortunately such an investment is not yet truly economically viable and there is a shortage of renewable energy sources.

How is the AICHELIN Group positioning itself in this market?

We have already invested extensively in the development of highly efficient electric heating systems and in the use of hydrogen as a heating medium, and the technology is ready for use. With our “Green Check”, we offer a specialised service whereby existing plants are assessed for potential energy savings as well as opportunities to switch to electric heating; appropriate conversion measures are then proposed and
implemented.

What impact have the exponentially rising energy and raw material prices had on the industry?

As in all other industries, price rises affect the final price of products. Manufacturers are now forced to pass on the increased costs to end customers in order to survive. For Europe in particular, this has a very negative impact on competitiveness.

What role will green gases such as hydrogen play in the future for heating industrial furnaces?

Hydrogen will become increasingly important in the medium and long term, but before that, the efficient and sufficient production of ‘green hydrogen’ must be ensured. Currently, a large proportion of hydrogen is produced from natural gas, and the necessary amount of sustainably generated electricity is also still lacking for production using electrical energy.

Induction and electric heating are becoming increasingly important. How large will the proportion of electrically heated plants be in the future?

As soon as the necessary energy is available, I can imagine that a significant proportion of the plants – where technically feasible – will be electrically heated. But the same applies here: the electricity must first be available at a reasonable cost, and the grid infrastructure must also be designed to cope with this, as we are talking about very high-power loads in this context, which cannot currently be provided for many customers.

Will there be changes to the AICHELIN Group’s product portfolio?

We expect growth in the service and conversion business, particularly in Europe, which is also a key focus for us. That is why, in recent months, we have consolidated our entire service business in Europe into a single organisation, ‘AICHELIN Service Europe’, in order to become even stronger in this area. Furthermore, with the transformation of our subsidiary NOXMAT from a specialist burner manufacturer to a specialist in heating systems, we anticipate additional business beyond the field of heat treatment alone.

What significance does digitalisation hold for the Group, and how is this reflected in the company’s strategy?

Digitalisation is a top priority within the AICHELIN Group and is firmly embedded in our strategy. With our process control system ‘FOCOS 4.0’ and our maintenance tool ‘#jakob’, we have developed two products that enable our plants to be connected to the digital world. In doing so, we offer our customers modern tools to make optimal use of the collected plant data and to generate clear added value in the area of plant availability.

What can digitalisation achieve, and what are the limits of heat treatment process automation?

Advancing digitalisation means that a large amount of data is collected automatically and then processed and evaluated. This provides the plant operator with a very good overview of the ongoing plant processes and allows conclusions to be drawn about stability. Furthermore, the plant can readjust itself based on these evaluations and pass on data to upstream and downstream sections of the plant. These analyses can also be utilised for preventive maintenance. The resulting reduction in unplanned downtime significantly increases plant availability. AI is already being used here to calculate the expected service life of components under current operating conditions. However, when it comes to initial plant settings for complex components or when heat treatment processes are to be optimised to the limit, the many years of knowledge and expertise – that is, the experience of the heat treatment specialists – remains indispensable. Often, only countless trials can help here until the optimum settings and processes are found.

There is a trend towards deglobalisation. What impact might this have on companies that are major exporters?

The AICHELIN Group has always had a decentralised organisational structure with strong local operations. We live by the motto ‘local for local’ and are therefore also less vulnerable to selective disruptions in supply chains or local market fluctuations. ‘Think globally, act locally’ certainly has a major impact on our positive international development as a strong group. If we had to serve the whole world from just one region, it would be much more difficult, and that would severely limit our scope for action.

How do you assess Europe as a business location compared to other economic regions?

Europe will always remain an important market, but it is definitely no longer a growth market and I think we have reached our peak. Competitiveness has declined, and other regions have caught up significantly in many areas or have already overtaken us. The difference is that European countries have to defend a high level of prosperity, whilst other regions are eager to achieve a certain level of it. Europe will certainly have to tighten its belt in future, and we will have to step up our efforts once again so as not to fall behind, at least in the fields of technology and development.

Mr Grosspointner, thank you very much for the interview.