An outward flow
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“There are things in our industry that you can’t just pick up and move elsewhere, like a quality working culture, team spirit and productivity. These are things that German and European businesses are renowned for,” Mr. Kutz says. He is keen to emphasize these qualities in SPXFlow’s European operations as part of a confident approach to global markets. “Globalization has challenged us to refine our identity and present a clear choice to our customers.”
SPXFlow’s German operations are in a state of flux, as Mr. Kutz explains: “I have taken on the role of interim Site Leader, as our last manager recently retired, so we are really in a process of renewing the vision of our operations here.”
For Mr. Kutz, this means pivoting the company to an understanding of challenges facing any modern business. “I think, as a product of our international company structure, it was always going to be the case that we had a highly export-oriented approach, but because of increasing market saturation in delivering components for different industrial processes, we’ve had to build more onto our service, to develop and design whole systems in a more bespoke way for our customers when they require it,” he says.
Turning to a more service-oriented, start-to-finish service has helped make the most of SPXFlow’s European reputation, gaining it a 60 million EUR turnover in the last year, with an 80% export share. “Of course, the argument still remains that it’s much cheaper to find components from emerging market manufacturers,” Mr. Kutz concedes. “Wages in the Hamburg area are high. But for our high wages, we are incredibly productive. We automate processes where we can and spend a lot of time on product development. This makes up for the difference in price between us and somewhere like China, where wages are lower and work is more labour intensive.”
All this makes Mr. Kutz sure that his products will give a competitive advantage to clients. “Having a component manufactured in Germany is important for many of our clients,” he says. “They know the pumps we provide will last longer, that the product development is more thorough. It’s about investing in the future for them.”
Being part of a large corporation has allowed SPXFlow’s Norderstedt operations to focus on industrial pumping technology. Coinciding well with SPXFlow’s strategy are the trends in this sector. “In oil extraction and chemical processing, the trend has been towards efficiency and integrated solutions, which favours higher-quality manufacturers like us,” Mr. Kutz explains.
“Globalization has challenged us to refine our identity, and present a clear choice to our customers” Karl KutzSite Leader
For SPXFlow, this means offering not just component production, but also bespoke engineered solutions to generate long-lasting value for clients. “If a customer has a requirement, we develop a solution for it in-house,” Mr. Kutz says. “We have our standard product service, but when our clients require something, we develop it just for them.”
SPXFlow’s vision is a refreshing one in a time when many companies feel under threat from competition in the emerging markets. By pivoting towards a more bespoke and supported approach towards its clients, SPXFlow has positioned itself to offer something beyond its competition and make the most of the reputation that many European businesses have for quality and long-term value.
