A task for generations to come

Mr Dahmen, SMS group is one of the leading companies in plant construction and mechanical engineering for the metals industry. Your aim is to become a trailblazer of a CO2-neutral metals industry, as embodied in the hashtag #turningmetalsgreen. How can your company contribute to the green transformation?

DAHMEN: Conventional production of steel, aluminum and copper creates a lot of carbon dioxide, accounting for some 10 percent of all global CO2 emissions. The steel industry is a particular factor because it uses coal to smelt iron ore in blast furnaces for producing pig iron. Carbon from the coal combines with oxygen from the iron ore to produce large amounts of CO2. We’re pursuing two technologies to change this. First, for converting iron ore into pig iron we’re using a direct reduction process that replaces coal with hydrogen or synthesis gas. Ideally, the hydrogen for this process is produced with renewable energy. We are implementing the direct reduction process at Thyssenkrupp Steel in Duisburg, Germany, and at Swedish startup H2 Green Steel. But we have a long way to go before the entire steel industry is in a position to decarbonize with this approach.

Is that why you’re pursuing an additional route?

DAHMEN: Exactly. We can optimize existing plants by injecting additional hydrogen or syngas into the blast furnace process. That significantly reduces the amount of coal needed to produce the pig iron, which in turn reduces CO2 emissions by at least one-third – potentially even as much as two-thirds. Parallel to this, under the banner of #turningmetalsgreen we are pursuing an end-to-end approach that includes recycling metals and recovering waste materials. For example, we’re working with Hamburg-based Aurubis to build a plant in the US for melting down and processing electronic waste. And our joint venture Primobius is developing a lithium-ion battery recycling plant for Mercedes-Benz where we first shred the batteries and then use a wet chemical process to extract their valuable raw materials such as cobalt and nickel.

Your examples show there is a lot of momentum. How significant are climate protection and sustainability as drivers of your business?

DAHMEN: The green transformation is a huge opportunity for us because we have the necessary technologies. We’re ready to go down this path with our customers. We’re not only concerned with selling our products but also actively pursue project development. We view ourselves as long-term partners for our customers; we discuss a great deal together and we work cooperatively to keep driving projects forward.
 

What do you see as noteworthy strengths in the partnership with Endress+Hauser?

DAHMEN: As a family-owned company, we are pleased to work with other family companies: there’s that similar corporate culture with its high regard for personal and professional interaction. Also, Endress+Hauser is well positioned with its global network. We’ve had excellent experience with availability, ad hoc service and on-site support at our construction sites. Last but not least we have a sustainable partnership. We develop solutions hand-in-hand with Endress+Hauser, and we see in them the potential to offer customers added value through new instrumentation for cutting-edge fields such as hydrogen.

Both Endress+Hauser and SMS are increasingly relying on services and digitalization. How significant is this development? 

DAHMEN: We view services as a pivotal element of the partnership with our customers. Thanks to good margins, the service business makes a significant contribution to our operating result. It is additionally much more constant than the plant business, which is very cyclical. It provides the company with a steady stream of revenue, as well as with a valuable feedback channel regarding the real-life performance of our systems. These findings help in technology and product development. And last but not least, the service business is also an acquisition instrument. When we discover a need for modernization in a plant, we can approach our customers at an early stage and propose a solution.

ALTENDORF: Digital services also play a key role. Process plants are usually major investments that need to be protected. If a production system experiences an unplanned outage, every minute of downtime costs a lot of money. To avoid this, the reliability of the instrumentation is extremely important. The technology must be able to monitor itself. And we even go one step further. Our service people can use digital tools to actively warn plant operators if a process could potentially become problematic. The key phrase here is predictive maintenance. We want to automate such services to a greater extent in future, as the skilled labor shortage also affects service staff. Automation and digitalization enable us to expand our service offering, even though there is a tendency for fewer staff to be available.

Both of you will soon hand over your responsibilities to someone else: Mr Dahmen in October and Mr Altendorf at the end of the year. What, for you, were the most important aspects in arranging your successors?

DAHMEN: First off, I think it’s great that with Jochen Burg we found an internal candidate who is not only familiar with the corporate culture but personifies it. This will ensure strong continuity with respect to corporate values: highly important for a family company, particularly when it comes to the workforce and works council. Secondly, my successor is customer oriented, with the strategic vision to keep the company on course for the long term. This carries more weight than a short-term, profit-oriented mindset.

ALTENDORF: I too believe that a long-term perspective is crucial. My successor Peter Selders will have time to shape the company. We’re not talking about years, but decades. I also think it’s important that the new CEO advances the human-centric worldview that we have as a family-owned company. This vision gives our employees the confidence they need to effectively tackle the major challenges of the future.