"The energy transition drives increasing demand!"
Interview with Arndt Freytag, Managing Director of Socomec GmbH
As a manufacturer of switchgear, measuring devices, UPS systems, and energy storage systems, the French Socomec Group develops and produces essential components and equipment for a wide range of applications from transformer stations to data centers. Arndt Freytag, Managing Director of the German subsidiary, spoke with Wirtschaftsforum about current market developments.
Wirtschaftsforum: Mr. Freytag, for the past six years, you have been responsible as the Managing Director of Socomec GmbH, a 100% subsidiary of the French Socomec Group, which has a global turnover of over 900 million EUR. What products exactly do you operate with in the market?
Arndt Freytag: Basically, our range of services rests on four pillars: We act as a manufacturer of switching devices in the low voltage range and of measuring devices such as meters and other measuring systems. In addition, we produce UPS systems and energy storage systems in the medium and higher power range. Beyond the production of the respective components, we also offer all the associated services related to the devices.
Wirtschaftsforum: A market segment that promises strong growth in the face of the energy transition?
Arndt Freytag: Due to regulatory framework conditions, especially the requirements for the distribution network, many municipal utilities and other utility companies will have to retrofit their distribution stations so that the incoming and outgoing electricity flows can be measured cleanly enough to deal with the fed-in and dispensed energy carefully in the context of increasingly decentralized power generation. To this end, 40,000 of the transformer stations existing in Germany need to be completely renewed each year. Here we already see a huge market for our products - and also private sector companies are now required, as part of the Energy Efficiency Act, to correctly demonstrate their savings potential, which of course first requires appropriate values to be measured. Overall, we recognize a very favorable market situation for Socomec. Nevertheless, we also face challenges.
Wirtschaftsforum: What are the challenges involved?
Arndt Freytag: Despite the large volume of demand, there is indeed a risk of substantial structural changes in Germany, which are due in part to significantly higher energy prices. In Eastern Europe and the Southeast Asian region, manufacturing can be done with completely different cost structures, while the technological advantage in Western Europe has largely melted away due to strong development spurts in new technologies. If the German industrialization rate continues to decline in the coming years and possibly reaches the significantly lower level of France or the UK, there would generally be less production in this country and thus also a decrease in demand for our products. Overall, however, we clearly see more opportunities than risks for the German market – not least because we also offer large applications for data centers, a segment that will experience strong growth rates in the future.
Wirtschaftsforum: How are your services changing in the face of these technological upheavals?
Arndt Freytag: Our customers are increasingly looking for concept solutions within which they can get a measurement solution from a single source and don't need to hire numerous subcontractors anymore. At the same time, fewer routine services are needed at our customer's sites, but more comprehensive consulting is demanded. Accordingly, the competency field of our employees in the relevant areas will also need to shift somewhat. Another added value that is gaining importance lies in our remote services, which are not trivial to implement due to legitimate security concerns of network operators. However, we have now succeeded in developing a service concept where we evaluate messages sent from the customer's network to our control center, then derive precautions from it that we play back to the customer without needing to access their network.
Wirtschaftsforum: How flexible can Socomec be as a company in adapting to these changes?
Arndt Freytag: Despite its size, Socomec has remained a medium-sized, owner-managed family business, characterized by very flat hierarchies and short decision-making paths, even across the borders of individual national companies. Coupled with an exciting field of work, we see this as excellent conditions for a successful future. Interested customers and potential employees are warmly invited to see for themselves at our headquarters in Mannheim!