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Securing the future of German engineering

Interview with Dr. Antonio Fernández, President and CEO of HOSOKAWA ALPINE AG

European Business: Dr. Fernández, you joined HOSOKAWA ALPINE in 2012 and were appointed President in 2016. What has been your focus so far, and how would you describe the firm in terms of philosophy and culture?

Dr. Antonio Fernández: My role is naturally strategic. Besides managing, I like to create. Digitalization is one very important topic. I think every firm has to find its own way in this respect. I would say we are at the start of this journey. It will involve a lot of change, and the challenge is to drive the firm forward whilst bringing the staff along too. In general, my job is to question processes and find ways to cut costs, reduce delivery times and increase quality. That is not a contradiction in terms; it is just a question of finding new approaches. This task is aided by the company culture: Communication is open, and everyone is prepared to jump in and help when things get tight. As a result, we have a high number of long-term employees, which is also good from a skills and experience perspective. We believe strongly in personal development – we have our own training campus, where knowledge is transferred from one generation to the next. This keeps learning at the forefront of our employees’ minds, and it means that we retain the know-how within the firm. We are in a complicated business, and this ultimately reduces the time we spend on inducting new employees.

European Business: Can you explain HOSOKAWA ALPINE’s business, and what makes it so complex?

Dr. Antonio Fernández: We produce machinery in two distinct categories. Firstly, there is the powder and particle processing equipment, which involves the production of standalone machines and turnkey systems used in the processing of powders and granules. The second pillar of our business is technology for the production and finishing of blown film. In both segments, we undertake the whole process from design and development to manufacture, testing and trials, and maintenance. We provide a very strong advisory service, and the vast majority of our machines are designed specifically for individual customers. We see ourselves as a bespoke solution provider. On the other hand, some products – laboratory equipment and spare parts, for example – are sold online as off-the-shelf items.

European Business: What impact is digitalization making on your business, which is in what is traditionally a relatively conservative sector?

Dr. Antonio Fernández: We are focusing on two areas where digital transformation can make a difference. Internally, it can help make our processes and automation more efficient. From a customer-facing perspective, we are working on digital products which will allow for new business models and plant operations. We are also looking at equipment rental and leasing – even a pay-per-use approach is conceivable. Fundamentally, for our customers, our machines are a means to an end. They want to sell their end product, and we, indirectly, manufacture that product for them. Ultimately, I envisage adding more value than just selling our customers a machine. Artificial intelligence is another topic. Our machines generate a lot of data. The question is, ‘How can we use it?’ We are also starting to use virtual reality to test the usability of our designs before they are built, something that our customers are increasingly demanding.

European Business: What are your most important markets?

Dr. Antonio Fernández: Our powder and particle processing equipment is sold to, among others, customers in the food and chemicals industries; producers of minerals for the construction industry, which is a growing market; and the pharmaceutical sector, an area with very high and stringent demands. Our film blowing and finishing equipment is used primarily in the food industry. In some parts of the world, a huge amount of food rots before it can be packaged – not surprising when logistics and infrastructure standards are often relatively low. Our machinery is used in these locations to speed up the packaging process. In total, exports account for around 80% of our turnover, which is currently in the region of 179 million EUR per year. Growth is around 10% annually, due mainly to the film blowing equipment business.

European Business: What keeps HOSOKAWA ALPINE customers loyal?

Dr. Antonio Fernández: I believe that they value our extensive experience in process technology – well over 100 years in total. In addition, we are able to carry out extensive testing and make well-considered recommendations to our clients. Many of our customers have been with us for over 25 years. They value the competent service they receive from our employees. We believe this service is what differentiates us from our competitors.

European Business: What do you see as significant for the future of the industry and for HOSOKAWA ALPINE?

Dr. Antonio Fernández: Firstly, although the market in Africa is currently small, in five to ten years, I believe this will be a very interesting region for us. We are looking at the capacity of our current operations to ensure we have scope to grow in the future to meet increased demand. We have invested 30 million EUR in the past eleven years and have already become more efficient and flexible. We must continue to focus on knowledge transfer between the generations. We have always believed in quality made in Augsburg, and we want this to remain our motto.

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