In an interview with Stainless Steel World News, the two CEOs discuss what the group’s philosophy of ‘creating value’ and ‘sharing knowledge’ means to them, how they are steering the business through the COVID-19 crisis, and how they hope to grow the group in the future.

^ Damstahl´s Fitting Center in Langenfeld.


Article By Frank Wöbbeking
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What was the rationale for the division into Damstahl Nordic and Damstahl Central? “To put it simply, the markets in the Nordic counties and Central Europe are so different that they call for different strategies. We are even talking about different products for the two regions. At the same time, we also have a lot to learn from one another”, explains Michael Lund. “The transition to the new structure was very smooth, which is usually not the case in this industry”, adds Stefan Müller-Bernhardt. The two entities will remain closely linked, especially in terms of their joint financial management.
For example, CFO Claus Bang Christiansen is responsible for CFO Damstahl Group. In the areas of IT and Business Consulting, the company is implementing shared service centre structures.
Damstahl has so far survived the COVID-19 pandemic virtually unscathed. “We haven’t had to resort to reduced working hours and have successfully delivered all orders on time. We have even created new jobs”, reports Müller-Bernhardt. “Our sales volume for this year will be slightly below 2019, but more than 2018”, adds Lund.
The two CEOs attribute the group’s success to its structure as a family-owned business. Financial stability thanks to a high equity ratio, a safety-focused company policy, and pragmatic owners – the best foundations for success in uncertain times. “We are one-of-a-kind in our industry: a family business with no external shareholders”, Müller-Bernhardt enthuses. “We don’t need to explain to anybody involved why market conditions are tough this year. Our owners can see that for themselves. That means that we can focus all our attention on business operations”, says Lund. He has experienced how it is to working for publicly traded companies himself, and knows that a different mindset prevails: “There is far less patience in the working environment there.”

Investments
A prime example: Damstahl is investing in the construction of a new high-bay warehouse in Leverkusen. Even with the current crisis, the owners are not deterred by costs in the tens of millions. The project will be implemented without any modifications, although over a slightly longer time frame. The product portfolio has also been expanded as planned: the number of available materials has increased from 18 to 25 – without any negative impact from the coronavirus. The number of employees across the group has increased by more than ten, including additions at the management level: Damstahl Central has appointed Gudrun Breuer-Federwisch as its new financial director.
These conditions ensure a comfortable launchpad for management to think about further growth – a ‘Damstahl blue future’. In this vein, the company has made a successful entry into the French market. Management is interested in expanding to other countries and is therefore examining suitable options. The Damstahl Group is currently active in eight countries.
Country-specific differences aside, one thing is universal: the service philosophy. You will not find the word “no” in the Damstahl dictionary in any country, at least not when it comes to customer enquiries. “If we don’t have a product in stock ourselves, we will source it for the customer. Even on a Friday afternoon. The main thing is to help the customer”, Lund emphasises. The current market conditions demand creativity at every level if a company is going to set itself apart from its competitors. This also applies to logistics. “Standard solutions do not help our customers. So, for every order we ask ourselves: what is needed sooner, what is less urgent? Do we need to set up an on-site storage facility? Together with the customer, we develop tailored solutions to suit their business”, adds Müller-Bernhardt.
Creating value
This is the basis on which Damstahl creates value. Which brings us to the company slogan: “We create value.” But what does that mean exactly? “What we value the most is our employees. When they are happy and motivated, our success is guaranteed. They are invaluable to our company – and thus also for our customers. When we work skilfully, reliably, and efficiently, when we are smart about exploiting the possibilities of digitalisation, we are saving the customer money and thus creating value for their company,” explains Müller-Bernhardt.
Of course, that applies just as much to Damstahl Nordic as to Damstahl Central. In which areas can the two divisions learn from each other and benefit in the future? “We combine the best of both worlds”, explains Müller-Bernhardt.
“For example, in Denmark we have committed to declaring CO2 footprints for each of our products. That way, the customer knows how their purchases affect their own CO2 footprint”, Lund elaborates. These details are provided in the quote, along with the price: “If they are purchasing a product made in Europe, it has a certain CO2 footprint. The footprint might be higher or lower if the product is made in India.”
Thus, the customer knows precisely how much CO2 has been emitted in making the stainless-steel products they are buying from Damstahl. In particular, the large OEMs have strict targets and have to reduce their CO2 emissions by 50 to 70 percent. So, they appreciate this information and the associated range of options.

Climate change
These considerations are not yet commonplace in the DACH countries, but why not follow the Nordic model? “If we also introduce this procedure here, we will be pioneers in our markets”, responds Müller-Bernhardt. For example, while it might seem cheaper to buy a product made in Asia, things can look very different when you take the CO2 footprint into account. In some cases, the more expensive goods from Europe might turn out to be the most cost-effective option overall. The customer can then decide what is more important to them. “We don’t always have to reinvent the wheel – a great benefit of the close team-work within the group.”

All in all, Damstahl takes climate change very seriously. In contrast, many other companies write extensively on their websites about their efforts to reduce CO2emissions, but tend to neglect to take corresponding action. Lund shares one of his experiences: “The biggest paradox I’ve come across was in a discussion with the operator of a wind farm. They sell renewable energy, but don’t need to account for the CO2 footprint of building the wind farm, or of their suppliers. Amazing! This is exactly why we try our best to persuade our customers in one-on-one discussions. Cutting CO2 emissions is a vital issue.”

Digitalisation
Climate change isn’t the only area in which Scandinavia has the lead on Central Europe – they are also blazing trails in digitalisation. These developments are also reflected at Damstahl. “Damstahl Nordic is a pioneer in digital business, with 40 percent of orders already generated through digital channels”, states Müller-Bernhardt. So, in this regard, our Scandinavian colleagues already have a four- or five-year head start. Now we can learn from their experience and position ourselves as a driving force for central Europe.”

In order to enhance digital skills throughout the company, the firm has co-founded Slize Digital, which specialises in digital solutions for the steel industry. The start-up is led by a former Damstahl employee, who combines his experience in stainless steel with digital know-how. The team comprises six members, whose first task is to develop a new e-service portal for Damstahl. “This is one bandwagon we at Damstahl Central have to jump on – progress won’t wait for us,” emphasises Lund. In the CEO’s opinion, the platform models employed by other providers have not proven successful. The future, therefore, lies in the company’s own area of expertise. “We are primarily a stainless steel distributor, that is our core business. For digitalisation, we need professionals with the appropriate experience.”

In keeping with the digitalisation of the business, the Communications and Marketing departments are also continuing to evolve their digital approaches. For example, Damstahl has just published a company video which is being distributed through digital channels.

Sharing knowledge
Despite all its digital know-how, the company’s main area of expertise is obviously in the trade of stainless steel and consulting on its applications. This represents a wealth of knowledge and experience that Damstahl actively draws on. Which brings us to another important pillar of the company’s philosophy: ‘sharing knowledge’. But what exactly does that mean? “Thirteen years ago, we decided that we should know even more about our own products. So, we recruited the renowned chemical engineer Claus Qvist-Jensen”, Lund recalls. The expert in stainless steel has already shared his knowledge in four reference books. In addition, he regularly gives public seminars, training sessions and webinars covering topics such as surface preparations, application scenarios and design issues. Within the company itself, know-how is also collated and shared, enabling customers to benefit from the expertise.

“Damstahl is operating in a world of commodities, so we have to seek out special niches. This in turn leads to a high demand for consulting. And we can meet that demand”, says Müller-Bernhardt. In Scandinavia, for example, Damstahl products are in particular demand for the food and beverage sector, as well as the pharmaceutical industry. “Highly sanitary products are needed here, and those involve a lot of consulting.” This is one area in which the experts from Damstahl can showcase the depth of their knowledge.

Testing and inspection capabilities
In Germany, the chemical industry is one of the most important customer segments for Damstahl. “For example, we are the main supplier of stainless-steel tubing and flanges for BASF”, tells Müller-Bernhardt. “We have, therefore, developed quality testing systems which we can apply in-house for our customers. We are setting the standard for distributors in this area. That is one of our unique selling points”, explains the Damstahl Central CEO.

Processing is another aspect that the company is looking to develop further. “So we are going to invest in CNC technology”, announces Müller-Bernhardt. Milling, drilling, sawing…this is another area where customer requirements are our priority.

Despite the COVID-19 pandemic, Damstahl is not slowing down. What does that mean for the future? “We have big plans”, the two CEOs agree. But, and this again reveals the level-headed nature of the family business: “Of course, we can’t implement everything all at once. So we are making progress step by step.” And that is how Damstahl will always remain at the cutting edge of the market….
Frank Wöbbeking