Insight

With so many political, economic, and industry, factors currently influencing the fastener market we decided to invite leading fastener businesses, from all European countries, for an insight into the prospects and challenges of their domestic markets.

We asked them to consider not just economic and financial issues but also technology drivers for the fastener industry and to identify priorities for the future. We are really grateful for the time and thought generously invested in assembling a unique perspective of the European fastener landscape.

For space reasons we have edited some contributions but have been careful to retain the core of each contributor’s insight. Of course, there will be other, and perhaps divergent, viewpoints. Yours may well be one and we would be very happy to hear it for a future issue: editor@fastenerandfixing.com

Meanwhile, we hope you find this anthology as fascinating as we have.

fischer Group of Companies
By Florian Birkenmayer, speaker of the board of directors for the fixing systems division and managing director development and product management

By helping shape the future, the fischer Group of Companies remains a known entity in the context of global competition, social and political innovations, as well as technological progress.

The fixings industry is growing in our domestic market and we are using these starting conditions to our advantage. We are also expanding our market share with new products and services for our partners in the rest of Europe. We are currently seeing substantial growth rates across all regions. 47 subsidiaries in 35 countries, and exporting into over 100 countries, creates proximity to the market and customer.

Our production sites are located in Argentina, Brazil, China, Germany, Italy, the Czech Republic and in the USA. Approximately 75% of our turnover is generated abroad. At the same time, our family business sees the strong ties of the Fischer family, and many employees, to their native Black Forest as a crucial foundation for global growth and innovative solutions.

Numerous trends are presenting new challenges to the fixing industry while at the same time offering tremendous potential. This includes advancing digitalisation, newly established construction materials and growing dimensioning requirements. Things are gathering speed and there is increased demand due to globalisation.

We are aware of the fact that we can only expand our international growth if we continue to set new trends and high standards in the market – with our products and services. fischer products represent innovation, security, quality and ease of handling. We also have a diverse and wide range of fixing solutions, which we are continuously developing and expanding so that it meets many different global customer requirements and applications – all while taking into account changing parameters, such as new construction materials. We must prove these competitive advantages time and time again.

We use the opportunities that result from trends. When it comes to digitalisation, we have already implemented various methods and techniques as a step towards modern and smart production in-line with Industry 4.0 standards. We also provide support with planning projects, based on current standards, through our modular fischer design software FIXPERIENCE, as well as through data for various software applications (BIM, 3D).

Building Information Modelling (BIM) is growing in importance in construction and therefore in the fixing industry. Project business is crucial for our turnover objectives. In order to be involved in this trend, we offer BIM-compatible data for our products and are continuously expanding this area. Through multiple construction projects of ours across the globe, we have become convinced that BIM speeds up construction progress, reduces costs and improves quality.

We furthermore offer digital services such as the plug finder App for end users, and professionals, and we will continue to expand this area in future. We are using indirect sales channels and therefore promote every market introduction with comprehensive sales support for our stationary and digital retail partners. It is important for us to offer a wide range of e-commerce services. This involves the customer journey beginning on our modern website, the fischer Apps or the six fischer social media channels, as well as the fischer blog, and ending with the purchase of a product in the online store of the retail partners.

Keller & Kalmbach GmbH
Dr Florian Seidl, chief executive officer

At the moment our market is stamped with a lot of question marks: How will the economic situation develop? How will the trade disputes conclude? Where and when will a bubble burst? Will the phase of cheap money last forever? Will there be a currency crisis in the Eurozone? Will e-mobility disrupt the fastener markets?

These big political questions dominate the economic situation, which is at the moment marked by a high volatility. Last year and the first quarter of this year were also marked by a strong growth driven by the three most important world markets – the USA, Europe and China.

At the moment Europe proceeds tediously – besides a booming construction industry in Germany, China is slowing down, and it is only the USA that is proceeding reasonably well.

During recent years, our industry has developed very well with a lot of investments made in warehouses, acquisitions and expansion. However, the current uncertainty reduces the willingness for further investments. Furthermore, many distributors like ourselves are suffering from high stock buildings, which have to be reduced gradually. In consequence, the order entries at the producers are declining. In such uncertain times the pressure to reduce costs are increasing for industrial customers.

The fastener and fixing distributors are tremendously important to reach this goal. Order and warehouse proceedings can be simplified with our support. Constructions can be made easier by consulting. Concerning fasteners and other C-parts, we will play an important role as a big number of different products is needed, which are produced by many different producers, and the customers do not want to get in touch with so many producers. The German fastener and fixing industry is in a strong position, as it is very competitive due to the strong situation of competition in our home market.

Keller & Kalmbach helps to make its customers more successful. We can give technical advice; show them the best solutions for their supply chain of C-parts; develop new helpful logistic tools together with the Frauenhofer Institute; and we are working to be more efficient through the digitalisation of all processes.

If the answers to the questions above will not be negative, we will be successful also in the future.

R + FK Schulte KG
Carl Philip Schulte, associate/deputy chief executive officer

The German market for fasteners has seen a tremendous growth and development since the last big crisis in 2008/09. However, in 2019 we have seen the first signs that indicate a sharp decline of the economy – putting the super cycle of 10 years within the fastener industry in Europe to an end.

Competitiveness and reliability are the most vital characteristics of a supplier for the fastener industry. For more than 80 years we have worked in the industry in the heart of Germany – striving for customer satisfaction and the best price performance ratio, with our huge range of high-quality standard and special washers/stamped parts from 0.05mm up to 12cm of material thickness (or inside diameter: M0.8 to M160).

Since 2008/09 the fastener industry in Germany has had long years of growth and development with 2018 being its pinnacle. All this happened despite the premature revocation of the anti-dumping measures against the Peoples Republic of China at the beginning of 2016.

At the end of 2018, however, multiple negative effects interfered and reinforced each other: Permission problems of car manufacturers with regards to WLTP and CO2/NOX emissions, trade war between USA and China, a downturn of the general economy, over ambitious expectations of many market participants concerning sales volumes – leading to considerable inventory increases – and last but not least the fear of a hard/chaotic BREXIT.

These effects have led to a very toxic situation within the German (fastener) industry. Especially the reduction of inventory volumes of distributors and the significant increase of imported goods from China in 2018 and 2019, which has led to major challenges on the side of the (European) manufacturers that someday might lead to an existential crisis and the ceasing of production of standard parts in Europe – with all its follow-up effects on the industry.

We have tackled this challenge by massively increasing our stock levels and ensuring short term availability of standard parts to support customers with the quickest reaction times from the very heart of Germany.

Another key driver of market development in recent years was the focus on creating value-add for the customer through individual customised solutions – especially in the area of special parts and washers. This requires the technical background to generate and develop adequate technical solutions (R+FK has its own state of the art toolshop with 35 employees); the right organisational set-up to funnel the customer needs efficiently through the organisation; and finally highly motivated and trained employees as translator and facilitator for the customer.

But in the end it all comes down to the most competitive solution – on a global scale. Given the many uncertainties in the upcoming months and years it will be a very interesting and demanding future to come: Distortions in the political, economic and financial background of Europe, the global trade wars, the e-car, CO2 and environmental measures, digitalisation and automation, the developments of the global steel manufacturers industry, etc.

Nonetheless, competitiveness and reliability as a supplier will always be the cornerstone for partnership.

Würth Industrie Service
Rainer Bürkert, executive vice-president of the Würth Group and general manager of Würth Industrie Service GmbH & Co KG

The fastener market in Germany is characterised by the manufacturing industry in Europe, and all over the world, and cannot be considered independently. This is exactly the branch of industry the customers of Würth Industrie Service belong to.

We have noticed that the requirements and needs of our customers in the field of production materials have become more specific in recent years. That is why individual and automated supply solutions, and a unique logistics concept, are more important than ever.

As a family business, the Würth Group is the world market leader in its core business, trading in assembly and fastening materials. In the business year 2018, the Würth Group generated total sales of €13.6 billion; adjusted for exchange rate effects, growth stands at 8.6%.

At Würth Industrie Service – as a company of the Würth Group and a specialised partner for the needs of the manufacturing industry – the growth course is quite similarly pleasing with sales of €568 million and a growth rate of 12.5%. This also reflects our view of the fastener market and the good economic situation last year and at the beginning of 2019.

From our perspective, the global growth dynamic – especially for our customers from a wide variety of industrial sectors – is not only influenced by the ongoing trade and tariff conflicts, as well as the uncertainty caused by BREXIT. Megatrends such as Industry 4.0, mobility, demographic change, networking, and digital transformation, also play a crucial role in the strategy alignment of organisations, technologies, and business models, which require solutions in the C-parts sector that are exactly adapted to these needs.

The automated supply of connection and fastening and fixing technology, DIN and standard parts, as well as special and drawing parts, is an integral part of our company strategy. In addition, we supply our customers with further product groups up to auxiliary and operating materials and offer an integrated, networked supply concept. The focus is on processes and systems that are to be made more efficient, safer and more user-friendly with digital solutions, with the aim of achieving an automated C-parts management for procurement, intralogistics, workstations, production lines and maintenance.

For example, the integrated supplier integration, CPS®miLOGISTICS, presented in the last fiscal year. Behind this is an intelligent concept based on the principle of ‘everything from one single source’, with which customers can completely manage not only the Würth product portfolio but also non-Würth parts – and this within the proven supply systems such as RFID Kanban. Würth Industrie Service thus offers a solution with which users can digitise their entire supply chain and make it more transparent.

Digitalisation enables us to automate recurring manual activities with the aim of concentrating capacities on our customers’ core purchasing and procurement tasks. In the digital age, however, people still play the central role and can spend, for example, even more time on personal communication and solving complex logistical challenges. There is more than enough of that!

Lederer GmbH
Dr Volker Lederer, managing director

One of the key questions these days is ‘how will the current political and economic disruptions affect our future business in the short run and in the long run?’. ‘How can we cope with all the radical changes, some of which are already obvious?’

There are major disruptions that have their origin in politics. The never-ending creativity of the current US President in creating trade conflicts is a heavy burden for the whole global economy.

The unclear circumstances of BREXIT are a burden especially for the European economy. And, when we look at Germany, the political instability after the European elections could lead to a political paralysis.

We also face important economic disruptions. The frequently discussed digitalisation is changing our way of doing business at a tremendous pace. Huge global players like Amazon or Google are standing for completely new business models, which will for sure affect our business model in the fastener industry as well. And last but not least new types of mobility (electrically chargeable vehicles) have a major impact on the European car industry and therefore also on European fastener business.

We German fastener distributors are at the centre of all these disruptions. Most of our customers are German or European-based companies. The growing uncertainty caused by the widespread political trouble makes international trade more and more difficult for us and our customers. Nationalism and protectionism are leading to higher trade barriers – limiting the export opportunities of the European industry. Furthermore, impending tariffs by the US administration worsen the business climate.

For German (and European) fastener distributors the future challenges caused by all the economic upheavals are enormous. Coping with digitalisation is certainly our biggest challenge in the near future.

But we will also have to question our business model at ever shorter intervals – so we are able to compete with new and very powerful market participants and can satisfy the growing demands of our customers. We need to constantly improve in terms of efficiency, flexibility and process safety. Financial strength is an essential prerequisite for successfully facing all these challenges.

All these radical changes increase the economic uncertainty. This will definitely have a strong impact on the way we fastener distributors do our job. We must act more and more professionally and consistently follow the path of a permanent improvement process. I am convinced we will continue to have many opportunities to grow profitably in the future, but more vigilance is needed.

Download the full European fastener market report here