Arnd Kulaczewski, incoming president/chief executive officer (right); and
Daniel Thomas, managing director, Niehoff of India (left)
Last September, the Wire and Cable India (WCI) team had a friendly conversation with three stalwarts of NIEHOFF Gruppe – Heinz Rockenhauser, outgoing president/chief executive officer; Arnd Kulaczewski, incoming president/chief executive officer; and Daniel Thomas, managing director, Niehoff of India – at wire and Tube Southeast Asia 2013 – 10th International Wire and Cable Trade Fair for Southeast Asia held in Bangkok, Thailand. During the conversation, the WCI team gained detailed insights into how NIEHOFF became one of the leading manufacturers of wire and cable machinery in the world and gathered the latest information about the group’s subsidiaries – especially the one in India – and its future targets.
Gaining Customers’ Trust
As we already know, Mr. Heinz Rockenhauser is retiring on October 31, 2013, and Mr. Arnd Kulaczewski has been appointed to succeed him as president/chief executive officer. In the last twenty years of his service as CEO, Mr. Rockenhauser has taken NIEHOFF to dizzying heights. “Much has happened and much has been achieved. But let me tell you that NIEHOFF is still a family business in Germany. I am the first outside manager to enter this family business. This company was founded by Mr. Walter Niehoff. He wanted his company to grow into a leading supplier and so keenly developed it. He drew up the corporate strategy and organised a team of efficient people who played a vital role in strengthening the base of the company. When I joined the company in 1993, things were not really looking up. Walter Niehoff passed away in 1990, and we had a sharp recession in the early nineties. The times were tuff. Fortunately, the company has a sound base and that came to our rescue. Because of its strong base and our untiring efforts, NIEHOFF continued to deliver quality products. We believed in giving the customer the best possible service – that was our philosophy,” said Mr. Rockenhauser.
As in the past, so also in the present, NIEHOFF attaches most importance to credibility. The company tries hard to make its customers realise that they are in good hands. To do so, NIEHOFF makes special efforts to know the customer’s requirements. It works with its customers and partners to develop innovative production systems that manufacturers can use to meet the needs of the fast-changing global market. “We take real care of our customers’ concerns even after they have invested in our products,” said Mr. Rockenhauser.
Expertise Augmentation
To remain as a leading supplier of wire and cable machinery, NIEHOFF also works hard to augment its areas of expertise. “We are customer driven; we believe in expertise and service. At NIEHOFF, we live by these values. Over the years, we have become better and have been successful in improving our specialist know-how and design-engineering skills. Our brand should be seen as a premium brand – that’s what we aim for. We stand for extraordinary quality when it comes to wire drawing, and our team of experts works hard to achieve quality through innovative ideas in the automotive industry, which is a highly competitive sector. We have top quality workforce at NIEHOFF and that’s because we invest a lot in training. There is an interesting fact that you might not know about the way we train people in our company. We have a training centre where young people receive technical training for three-and-a-half years. We hire around 12 teenagers every year. So, in four years, we have around 40 to 50 so-called apprentices… . Within a period of four years, a young apprentice becomes a full-fledged worker – ready to efficiently contribute to the production of quality products. Training is the starting point of quality,” said Mr. Rockenhauser.
Team Spirit
NIEHOFF also attaches a lot of importance to team spirit. “Team spirit is of paramount importance. When I look back, I realise that team spirit has been one of the major factors behind our success… and open and honest communication is part of it. I know my successor will do his best to continue to foster team spirit at NIEHOFF,” said Mr. Rockenhauser. Mr. Kulaczewski, who is all set to take on the challenge, said, “A company doesn’t consist only of the chairman or president. A company consists of top management and many employees – all working together as a team. We have a cohesive team at NIEHOFF, and I will strive hard to strengthen team spirit in the company.”
Understanding Market Trends
Mr. Rockenhauser also gives considerable importance to understanding the current trends in the export markets across the world: “We constantly look for ways and means of exporting our products not only from Germany but also from other countries. In mid-1970s, NIEHOFF started a medium-sized branch factory in Brazil. So, we have been in Brazil for the last 38 years. Surprisingly, many big-sized companies could not survive in this part of the world. Ten years later, we started our own facility for sales and services in the US. In the 90s, Asia became important to us. We have been active in Southeast Asia, Korea and Taiwan since 1992 with our subsidiary NIEHOFF Singapore Pte Ltd. We have been running our own sales and service centre in Singapore for over 20 years now. We currently have 9 subsidiaries. Incidentally, we also sell licensed products in India as well.”
NIEHOFF of India
Speaking about NIEHOFF ‘s subsidiary in India, NIEHOFF of India, Mr. Daniel Thomas said, “During Mr. Rockenhauser’s tenure NIEHOFF of India achieved many landmarks. NIEHOFF of India was formed in 1997 as a joint venture. In 2003, NIEHOFF of India became an independent subsidiary and since then it has gone from strength to strength. When we started, our workforce consisted of just 13 workers. It now consists of around 100 workers. In its early days, NIEHOFF of India was an India-centric company – a company offering machinery only to the Indian wire and cable industry. The presence of today’s NIEHOFF of India is felt in markets in neighboring countries as well. We have also gone to markets in selected countries in Africa… and we achieved all this under Mr. Rockenhauser’s leadership and the guidance we have been receiving from our headquarters in Germany.”
Why India?
After becoming active in Japan and Singapore, NIEHOFF turned its attention to big countries like China and India. In China, it started a service group, in 1994, which gradually grew into a full-fledged sales and service organisation. It currently has nine workers, including five service engineers. However, it was in India that NIEHOFF decided to set up a subsidiary. “The question was in which of the two countries – India and China – should we start local production. We knew that we could be active as a medium-sized company either in India or China, not both. Our decision went in favor of India, because of certain compelling reasons. First, in India, we already had a license partnership. So, we had learned a lot from the local production. Second, English is widely spoken as a second language in India. Third, Indian law is based on British law. We knew that our investment would be safer in India than China because of Indian law and democracy. Fourth, the level of technology in India is lower than that in China, so we had a bigger role to play in India than in China. Lastly, and above all, we already had a partnership in India. We are currently exporting our products from India – thanks to the efforts made by Mr. Thomas. Also, we are now focusing on India’s neighbors; we are concentrating on Africa as well. But in these countries, including India, we have to compete with secondhand machines and low-quality Chinese machines. Despite these difficulties, we are trying to be active in as many countries as possible. We have also recently started small local production in China, but our main area in this region is India. Around 50 per cent of our sales were achieved in Asia. However, wire and cable markets keep fluctuating. As a result, there are always ups and downs,” said Mr. Rockenhauser.
Message for the Industry
Giving a message to Indian wire and cable companies, Mr. Rockenhauser said that Indian manufacturers must note that worker training and development can never be discredited. “There is always room for further improvement. As manufacturers, we must keep improving our specialist know-how and honing our technical skills. We can increase our savings through greater efficiency and competiveness. We must also give more emphasis to international exchange. You see, more technology is coming in and we must not stay away from using it,” he said.
Corroborating the outgoing CEO’s observations, Mr. Thomas said, “Wire and cable companies in India should invest more in research and development. They should think more of driving the market than following the international market. The wire and cable industry should try to develop new products to have a leading edge in the area of wire and cable manufacturing. If this happens, the industry will witness phenomenal growth and development. But this does not mean that training, housekeeping and maintenance of the plant should be disregarded; they are also important as they enhance workers’ efficiency, loyalty and morale.”
Future Targets
Speaking about NIEHOFF’s future targets, Mr. Rockenhauser said, “It is true that we have achieved a lot… much has happened, but this doesn’t mean that there is no room left for further improvement. We must understand that both technology and demand do not take long to change. We therefore need to be able to assess new situations and adapt accordingly. This I believe will be one of our major targets… and I know Mr. Kulaczewski is seriously thinking of the task ahead.”
Mr. Kulaczewski, who is quite determined to live up to the expectations of the outgoing CEO, said, “NIEHOFF has always been close to its customers and markets. One of my future goals is to continue establishing a good relationship with our customers. I also have to concentrate on identifying customers’ needs and market trends, as this is necessary for continuing successful business. Also, we will continue improving our presence, our abilities, in worldwide customer service. There is also room for innovation bringing additional value to our customers; for example, improved design of machines, so they work in a more energy-efficient manner and help our customers save money.
“This aspect will definitely get more importance in the coming years. Besides, supporting our worldwide customers in optimisation of the wire production process even more in the future will help them to be more successful and will be a proof that an investment in NIEHOFF’s high-quality products finally pays in the long run. Our focus has been and will be on India, as we are sure that India will grow significantly in times to come and that there will be a big demand for the equipment we offer. This finds evidence in the fact that still 300 million people in India are waiting to get access to electricity. Despite the temporary depreciation of the Indian rupee, our business prospects in India look quite bright.”
