Dr. Peter Schobesberger / Aichelin

Hi Peter. To start off while I am quite familiar with Aichelin some of our readers might not be as familiar with the company. Could you please give us a brief background about the company?

“Aichelin started in business in Germany in 1868 with cooking stoves for private and large-sized kitchens as well as living-room heating stoves built of iron and porcelain. At the turn of the century, in addition to these stoves, the company expanded their production range to include coal- and coke-fired ovens which were used for heat treatment of steel parts for industry. Aichelin today is an international group of manufacturers of heat treat equipment for the thermal and thermo-chemical treatment of metal components. We serve a broad range of customers – starting with manufacturers of large gears, wheels, bearings, fasteners, automotive suppliers to suppliers of small, precision parts for the watch industry. The group employs more than 1200 people and its turnover amounted  to 148 m€ in 2011. (Editors note; this is roughly $188 million USD).”

The company is of course based in Austria but has a number of locations around the world. Where are your sales based geographically? Would you say that Europe remains your focus or is this gradually changing to other areas?

“Today, the Aichelin Group is internationally very well positioned. Our headquarters is in Austria, south of Vienna. This is the main manufacturing site for Aichelin furnaces in Europe. NOXMAT – specializing in the production of burner systems, EMA – a manufacturer of induction heating systems and our after market sales operation are all located in Germany. Our specialist for mesh-belt furnaces is SAFED with operations in Switzerland, France and Germany. Aichelin USA is located in Michigan and we feel our technical innovations give this location a real advantage. With a strong know-how basis from the European core companies Aichelin concentrates especially on the development of the business in the growing markets of China, India and Brazil. In all of these countries Aichelin is represented by our own production sites, service locations and/or sales offices. The business volume is constantly growing in Asia therefore we need to become more “Asian”.  This does not mean that we will forget our roots and certainly we will keep on cultivating our strong base in Europe.”

January 1st, 2011 you became CEO and President of Aichelin Holding, how did you ever get involved in this industry and how long have been in the heat treating industry?

“Since starting my professional career I have been involved with high temperatures-there must be something in my genes. After studying process engineering I worked for a thermal power plant builder until 1999. This was the year when I decided to change from power generation to heat treatment as I was very familiar with high temperature applications and the associated chemistry. Looking at the heat treat industry and all the different applications in the fabrication of gears, bearings and other products I grow more and more fascinated. That`s why I am still here and I have not regretted one single day.”

My understanding is that Aichelin makes most types of furnaces available on the market with the exception of vacuum furnaces and vacuum carburizing systems. Are you seeing any particular type of furnace growing at the expense of others? For instance a trend towards batch IQ furnaces as opposed to pusher style?

“The decision about what type of furnace to use is always a matter of part geometry, size and number of pieces you need to produce. Several years ago there was a clear trend to vacuum carburizing and a lot of users were curious about this knew technology. Now the dust has settled and one can see clearly its benefits and disadvantages. Nowadays decision makers prefer a more rational approach and usually the type of furnace has a lot to do with the experience of the end user. In the US and Europe the approach is pretty conservative while in Asia the actual furnace builder has a lot of influence in the decision about what type of furnace to use.”  

Tying in with my previous question about trends in furnace styles I have to ask you my favorite question-where do you see the industry going in the future? At the end of the day this is a very conservative, staid mature industry where things do not change quickly. Do you foresee any substantial changes in the next 10, 20 or even 50 years? For instance a consolidation in the furnace building industry with only a few of the major players left or a dramatic  drop in the amount of heat treating done around the world?

“This is the kind of question one can fail at tremendously and part of the answer you gave already. Since heat treatment is a mature conservative industry things do not change quickly. This gives all decision makers in this industry with enough foresight sufficient time to adapt. Electro mobility will have different needs with respect to its applied parts and materials. How fast and to what extent we are moving in this direction however is at present pretty uncertain. In the near future I see no decrease in heat treatment around the world. For sure the increase in Asia will continue while in North America and Europe my expectations are not that high but I also do not see a major drop. Some consolidation probably will occur but since small to medium size furnaces are not very capital intensive to build, there will pop up new competitors with smart ideas. There is no danger that competition will die.”

My impression is that Aichelin is the largest builder of new furnaces in the world. Would you agree with this statement?

“Whether or not we are the largest manufacturer of furnaces depends upon the criteria you use. Don’t forget that Aichelin is not active in what we call “primary heat treatment”-the production of semi fabricated goods. It is true that we are pretty strong in heat treatment of already machined parts, which get their final hardness by carburizing, nitriding or similar process steps.”

One thing I have personally witnessed is the growth of new furnace builders in areas such as China and India. Some of these companies are growing at a tremendous pace and every day that goes by they become more and more technically advanced and rivaling the capabilities of some of the “western” long established new furnace builders. How much of a threat does this pose for your company? Do you see some of these new builders becoming major players in Europe of North America?

“In the last few years it was also our experience that the growth in China and in India allowed a lot of start ups in the furnace industry. Aichelin itself has taken advantage of these favorable market conditions and has gown tremendously in these areas. Generally we are successful in keeping these new suppliers out of our current customer base. For several reasons I am not really worried about the competition from the East. If you have a close look at the quality provided from Chinese furnace fabricators for instance, there is still a huge difference. The prices in China or India are rising nearly 10% per year, which diminishes the present cost advantage steadily. The transport of a bulky good such as a furnace to a western country adds another 5 to 10% to the investment. Most important however is the lack of good customer support after a furnace is installed. Spare parts, trouble shooting and maintenance support in Asia has not grown as quickly as it should have. We see that many Asian competitors are not nearly as focused on after market service and support as they should be. Without being worried, however, we are always alert to quickly follow the market trends in Asia.”

Of all of your competitors which one do you respect the most?

“I do not want to place names here and deeply respect every honorable creative competitor. Sometimes I see exaggerated performance data given by competitors which leads to an investment decision based on a faulty base, which makes me angry, particularly when I later on see no severe consequences when this data is proven to be incorrect. Aichelin always wants to be identified as a trusted and reliable partner for all in the heat treatment industry. We are fully committed to our mission “Reliability at Work”. I believe more furnace manufacturers should take this approach.”

You always strike me as a very happy, optimistic individual who truly enjoys what he is doing. While none of us can forecast the future do you plan to spend your entire working life involved with heat treating?

“Again you want me to make look into a crystal ball. I have more than a decade ahead of me in my business life. At present I am enjoying my assignment with Aichelin and I don’t see any signs on the horizon, which would lead me to believe I will be looking for  another challenge.”

So what interesting developments can you tell us about at Aichelin? Any “juicy” tidbits of information or gossip that you would care to share with us?

“I do not know whether you have already heard about our recent acquisitions in China. Aichelin, China acquired in the spring of 2012 two furnace fabricators in Tangshan, which is located some 200 km from our main production site in Beijing. This allows us to proceed with our growth strategy in China and to expand upon our leading position in the country. Aichelin now has three production facilities in China with approximately 750 employees.”