The magazine of Friedhelm Loh Group

The magazine of Friedhelm Loh Group

Innovation – Stahlo

Smart move towards the East

Expansion. The Friedhelm Loh Group is ­expanding its steel expertise with a takeover. The focus will increasingly be on Eastern European markets in particular.

Text Markus Huneke ––– Photography

When Magnus Carlsen plays chess, he isn’t doing it for show. There are no dramatic moves. Instead, his concentration soars, and he reaches an unparalleled level of performance. Thanks to this strategy, the Norwegian has been the reigning world chess champion for five years running. Keeping one step ahead doesn’t depend on making theatrical decisions but on analysing your position and using this to make your move.

Stahlo Stahlservice GmbH & Co. KG made a strategically important move at the start of this year when it took over ­Blech-­Service Nordhausen GmbH & Co. KG. Located on the southern edge of ­Germany’s Harz mountains, Blech-Service Nordhausen specialises in the manufacture of sheet steel blanks with optimum surface quality. This makes the company a perfect fit for Stahlo, with the expansion representing a logical step in the latter’s strategy. Despite all the political risks that currently threaten global markets, the economy in Germany is booming.

Good prospects in Germany 

The Forecasts are positive: 

2018

the vecicle manufacturers reported a five-year high for new car registrations 

7%

increase in incoming oders recorded the mechanical engineering sector 

Up to 2.3% 

increase of GDP in Germany in 2019. 

Rising demand

However, it isn’t all sweetness and light for companies. Although order levels continue to be encouraging, as does the resultant capacity utilisation, growth also presents risks. The major challenge for steel service centres also lies in being able to meet growing demand when economic conditions are good, without neglecting service, deadlines or product quality or losing sight of customers.

This is precisely where Stahlo has acted tactically by investing in Blech-Service ­Nordhausen and bringing on board a strong partner. The new Stahlo site’s production expertise perfectly matches the steel service centre’s strategic focus. The machinery and equipment at Blech-Service Nordhausen include three cut-to-size lines. The site doesn’t just produce standard formats but also customised blanks, as well as small blanks and special sizes manufactured on fully automated cutting centres.

“Stahlo’s takeover of Blech-Service Nordhausen is a huge boon for both companies. This enables us to further expand our end-to-end expertise in manufacturing sheet steel blanks,” says Guido Spenrath, Managing Director at Stahlo, explaining the benefits of the acquisition. This view is shared by the previous owner of ­Blech-Service Nordhausen, Katrin ­Dietzmann, who will continue to contribute her experience and knowledge to the company as Managing Director, alongside Spenrath.­ “We’re looking forward to ­working with Stahlo and to the prospect of continuing to grow with one of the largest independent steel service centres in Germany on the sheet steel market,” she says.

Positive forecasts

The takeover is also a smart move in terms of the Eastern European markets. In particular, the immediate neighbouring countries Poland and the Czech Republic are dynamic markets with strong economies. These countries are already key customer regions for the Friedhelm Loh Group’s steel service centre. The site in Gera, where Stahlo is opening a completely new factory building at the start of 2019 with state-of-the-art, networked production and logistics facilities, means the two countries are practically right outside the factory gates.

Just as in Germany, the economic indicators in the two eastern neighbours are encouraging. Two figures underline this. Gross fixed capital formation in Poland rose more than 5 per cent to 82 billion euros last year. The picture looks even better for this year – on average, experts predict an increase in growth of 9 per cent for gross fixed capital formation, as reported by ­Germany Trade & Invest, Germany’s foreign trade and location marketing agency. This provides a sound basis for investing in steel-intensive sectors such as mechanical and plant engineering and mobility.

The Czech Republic’s importance as an economic region is shown by a further figure. In 2017, the volume of trade exceeded 300 billion euros for the first time. Over half of this is made up of machinery, equipment and vehicles. The country is a significant importer of semi-finished goods, and demand is rising. Its most important trading partner is Germany.

To supply these markets, Stahlo has taken numerous steps, both big and small, to position itself. “With Blech-Service ­Nordhausen on board, we’re not just ­gaining new customers – our growth in Eastern Europe is also being supported,” says Spenrath. And that is precisely the overriding strength of world chess champion Magnus Carlsen – manoeuvring himself into a strong position, game by game, move by move.

More interesting reads