Insight

Here Dr Florian Seidl, managing director at Keller & Kalmbach GmbH, discusses how the specialist for fastener and fixing technology, as well as C-parts management, has managed the numerous challenges of the last two years.

Like most companies in our sector, the last two years provided Keller & Kalmbach with a lot of unforeseen and unknown problems. Several pandemic lockdowns in 2020 and 2021 caused a never experienced reduction in turnover. As a business we could reduce the effects on the profit by introducing short-time labour (known as Kurzarbeit in Germany). However, we still had to struggle on many other fronts.

In the last quarter of 2020 until now, we and our customers had and have huge problems with the supply chain – especially the automotive industry, which is a very important part of our business. The sector could not produce cars because of the bottleneck with chips and other parts. The Far East imports of fasteners and other goods were also heavily disturbed and due to the backlog, a lot of emergency actions had to be taken. The third unexpected challenge, and for most of our employees completely new experience, was the sudden price explosion in our market beginning in the last quarter of 2021. Many suppliers of standard parts increased the prices more than 20% and some up to 50% due to the price increases in raw material and production costs. The anti-dumping duty for imports from China gave another push on prices and made the supply additionally difficult.

With a lot of work and a great effort from our team, we could avoid major problems for our customers and we seemed to be better than many others in providing the services our customers are used to receiving. Many of our customers do not have to worry about their supply chains, as our highly sophisticated warehouse and tools helped guarantee a safe flow of the goods in demand. Our huge stock also helped us to bridge supply problems.

During the last two years, Keller & Kalmbach has reduced its investments internally and instead developed an IT-tool called Logimat, which our customers can use for their own logistic processes – not only with us but also with other suppliers. We also acquired the distributor Fameco in Sweden and our long-term supplier HEMA – whose owner was seeking a new partner to go on with the business in Germany. We also founded a joint venture for customers in India.

Market outlook

To give an outlook for the rest of 2022, I would say that the delivery situation at the moment is stabilising but we still have very long delivery times of up to nearly one year and there exists a great uncertainty in the market if and how the international tension (war in Ukraine, lockdowns in China, worldwide trade restrictions) will influence the growth of the market.

One thing is sure, the high price level will be kept for a long time and perhaps go up even further due to not only the material prices for steel but also many other prices exploding, especially for energy. Those price increases have hit us hard because we have with many customers long-term contracts, so we have not been able to pass them onto the market. It is even possible that the prices will increase furthermore if the central banks do not act as necessary and/or the supply of oil and gas causes even larger problems.

Whilst the anti-dumping duties against China impacted us partly, we have for most of our products a two source or multiple-source-strategy so it did not cause huge problems for our customers. We think that those duties are justified in so far as China subsidises the steel prices, but we think that the percentage is much too high.

All of these challenges have also provided opportunities because our customers saw that we have our processes under control and are performing better than a lot of our competitors. We think that also in the future this will give us a chance to win new customers and help us to get even leaner. As mentioned before, we also developed an IT-tool that our customers can use for their own logistic processes – not only with us but also with other suppliers.

We think that the fastener distributors will play an even more important role in the market in the future. That’s the reason why we, despite of all the huge challenges, are quite optimistic about the future. We will continue to work on further improvement and rationalisation of our processes. We see a lot of chances in digitalisation and automation and think that the market will develop a concentration process.