‘Expect The Unexpected’

Interview with Michael Ziesemer, Endress + Hauser COO and executive board member

28.07.2011 -

Record Year - Endress+Hauser can look back on a successful 2010: With about 8,600 employees worldwide, the company achieved a turnover of €1.3 billion. The company reported excellent or even record-breaking numbers in most areas, making 2010 "the best year ever" for Endress+Hauser. The one downside: The strong Swiss franc over the euro did its job of tarnishing the positive news a little. In francs, the company's was much lower than its record year in 2008.

CHEManager Europe's Dr. Volker Oestreich asked Michael Ziesemer, Endress+Hauser COO and executive board member, about the company's plans for further development.

CHEManager Europe: Which regions and branches would you say contributed the most to Endress+Hauser's success in the last year?

Michael Ziesemer: The economic recovery was palpable worldwide from the beginning of the year. Just a few markets - including Greece, Ireland and Scandinavia - were exempt from this. We saw the strongest growth in the U.S., where our business grew 38.2%, which was even stronger than the growth in Asia, which was 28.5%. Emerging markets have gained much more importance much quicker than expected, mainly as a result of the economic crisis.

However, investments are also being made in Germany: It's now considered to be the most competitive EU country.
Our largest branch - the food industry - gave us our greatest push. In this area, plant and machine engineering companies - manufacturers of bottling plants, for example - recovered very quickly.

Also, thanks to the need for more raw materials, basic materials industry also contributed to our success. The pharma and chemical industries, the oil and gas sector, metallurgy, power plant technology as well as water and effluent treatment also developed well. Only the paper and pulp industry remained in the red.

How has your company reacted to the economic upswing?

Michael Ziesemer: Our financial independence allows Endress+Hauser to set its sights on long-term goals and to stay true to our convictions. Since we hardly made any reductions in staff during the crisis, we were able to go full-steam ahead once the recovery began.

In 2010, Endress+Hauser inaugurated a new building in Wrocław, Poland. Our sales center in China also started up a distribution center in Shanghai. Our Dutch marketing company recently moved into a new building in Naarden. Endress+Hauser Thailand is planning on expanding its offices, and the sales center in Malaysia will invest in its own building. Also, we plan on establishing a Saudi Arabian office together with a partner this year. We are clearly sending the signal that we are continuing our global expansion in all relevant markets.

What about the risks?

Michael Ziesemer: 2011 got off to a good start for us. Our new orders and sales are currently in the double-digit range over 2010, which was also a good year. However, we expect this development to taper off in the second half of 2011. There are still many uncertainties that can affect the market: The financial crisis is not completely over, and many countries' debt - also in the eurozone - is like a mortgage on the future. The political unrest in North Africa and the Middle East, but also the disaster in Japan showed us that a company has to expect the unexpected at all times.

After what happened in Japan, we were far less concerned about the economic developments there as we were about worldwide production losses, particularly in light of the fact that Japan is the most important distributor of electronic components, and the supply is already tight. We have to remain vigilant and flexible and keep taking advantages of opportunities, but we cannot overlook the risks.

What technological developments have you observed in process automation? What are your expectations for the near future?

Michael Ziesemer: Wireless fieldbus communication has gained in industrial importance. As we expected, our customers use WirelessHART technology where it makes sense, such as in plant areas that are far from each other or in mobile applications. Our largest contract in this area came recently from Colombia: We're installing 700 WirelessHART transmitters in an oil field. Other communication topics include the integration of equipment, where we work intensively to support the process with FDI in order to find a comprehensive solution. We also work with web technologies, from which significant benefits for the customer can be created.

What specific web technologies?

Michael Ziesemer: I am thinking of mobile application with apps for service and maintenance as well as continuous communication from the field over the plant asset management all the way to EPR. This could be used, for example, to allow the field device to trigger an order for spare parts.

But that could also be risky.

Michael Ziesemer: You're surely thinking of data security. The Stuxnet worm startled the entire automation industry. Protection from sabotage and espionage is important. Every new piece of technology that is installed has to be safe from hackers. Because of cost reasons and because of application reasons, there is no way getting around the fact that the established standards surrounding hard- and software must be used. There is still a lot to be done.