Aug. 6, 2020 - Refwin Team is pleased to have an exclusive interview with Marco Olszewsky, President China & East Asia, and Rudi Xiao, VP of Steel China, RHI Magnesita, with details as follows.
Refwin: Please introduce some development plans and objectives of RHI Magnesita in China.
Marco Olszewsky: RHI Magnesita has been in China for more than 20 years and experienced a very good development in high-temperature industries and is still growing. I'm very delighted that we increased our revenue dramatically and won more shares in the market. We have a clear strategy for China market and large-scale investment plans in the near future. We will invest significantly into sales force, R&D, service organization by hiring more refractory professionals and talents. We will also upgrade all our major plants to achieve advanced automation and digitalization of our facilities. 50 million Euros have already been invested in “Digital Flagship Plant” in Radenthein. We will continuously improve quality control, offer better data tracking and improve our supply chain services.
Refwin: We know RHIM started in China very early and have witnessed a great development. As a Joint Venture, RHIM reportedly makes frequent advances in other developing countries like India. Is RHIM’s focus shifting from China, since the market gets mature and costs are rising?
We started our business in China with JV partners as WOFE was not allowed to have 100% share in a company. China market is strategically important for RHI Magnesita. In 2018, we invested above EUR 20 million in our dolomite plant in Chizhou, Anhui Province. This is part of a decisive response to address global pressures in the supply of raw materials to the refractory industry and provide additional volumes to our customers worldwide rapidly. One of the reasons for the merger of RHI and Magnesita was to create a global leader in the refractory industry capable of capitalizing on growth potential while China and Asia are the key areas for this strategy. We’ve seen China is the first country with strong recovery during and after the COVID-19. We fully believe China is still in a leading position of global economy in the world. For the future, we have a very clear roadmap for executing our strategies and China is one of the company’s key focus for global growing strategy 2025.
Refwin: At current stage, what are the new changes in the development strategy of RHIM in China? We have heard that RHIM is participating in the bidding of some small and medium-sized steel mills. What are your considerations?
We didn’t evaluate the business by the size of the mills. Maybe it’s a small-sized mill in China, but for some other regions, it could be a large one. We participate in both medium and big steel mills when the customers have more requirements on the quality and service instead of the low price only. If they are ready for a professional and value-added solution from us, we are open to any kind of business opportunity. Some of the customers have already changed to pay more attention to product quality. Sustainable business requires a professional partner who can provide solutions to problems and requirements. It is not only in steel industry but also in all other related industries.
The size of the steel mill is a concept that basically talks about capacity. But we are focusing on developing the value in the steel industry and helping our customers develop faster and become stronger.
Refwin: See your point. So there's not so much change for RHIM’s strategy, right?
Marco Olszewsky: We always adjust our strategy to quickly adapt to the market since the market environment and customers are also changing.
Refwin: The impact of COVID-19 is still not over at the moment. What trends do you think will appear in the development of refractories industry in the post-epidemic period?
I came back to China immediately after the pandemic breakout even I was still attending a very important global meeting. It is very impressive how China, my Chinese team and everybody here adapted so quickly to the situation. We have more than 2,000 employees in China with no COVID-19 confirmed case till now. A lot of colleagues from other countries called us and learned a lot from our China team. The outbreak of the pandemic accelerated the regionalization, digitalization and automatization in RHI Magnesita. It impressed me how quickly my team are using WeChat or other digitalized way to communicate with customers. We will invest much more on the local automatization and digitalization because this will be one button for the future.
During the most difficult time, we guaranteed our on-site support for customers and received a special Letter of Thanks from customer’s top management to our headquarter in Vienna to express their appreciation for all the very special support during this special period.
Marco Olszewsky: We were also the first foreign refractory company who sponsored Wuhan Charity Federation with 1 million RMB. We also received recognition from the local government. This was very important that we have already done what we should and could at the very beginning of the pandemic.
Refwin: Leading companies are always responsible. Do you think the digitalization and automation is one of the trends after the Covid-19?
I would say this trend is already existing, but COVID-19 does especially speed up the situation much more. China has already quickly kept up with this automatization, with new platforms and new technology industries springing up. But the rest of the world must adapt and react much faster now. The world’s population will grow from existing 7 billion in 2017 to 9 billion by 2040 and most of the 2 billion growth will be in Asia Pacific. 4 billion people will become middle-class by 2040 and life expectancy will increase to over 70 years in average. With the increase of population and mid-class there is a strong need of more new cities, roads, railways, houses cars… Refractories are essential for our modern world. RHIM’s creativity and new solutions are needed more than ever to facilitate future development.
Refwin: So the market demand is growing, and there is huge market potential for the longer term.
It’s no doubt that Asia pacific is growing. Taking cement industry as an instance, it's not only a growing industry in China, but also backward integrated. There are steep lands for all industries, which also have to be profit-oriented. So it has to be operated in a much more efficient, sustainable and clean way with pollution free. There have been a lot of projects ongoing. For refractory industry, it's not only about selling the brick and we are going to provide the whole solution with additional and advanced service to customers. We have to be a partner of our customers. But some of our competitors are working on the cheap selling which is disrupting some markets and, in the end, causing damages on the customer. In future, more and more suppliers who could provide high-quality products together with solution will succeed to get more market share. So we try to have the full setup of the portfolio within China.
Refwin: What experiences can we learn from RHIM in emergency response?
We are more regionalized after the crisis. We have planned to open more offices in China, which could bring us closer to our end users. And also in Asia Pacific, we will have an office in each country. However, it shouldn't be only sales office. We want to bring solutions to the area and offer our customers with a full range of support.
Refwin: With regard to the digitalization in China and Asia Pacific region, what are RHIM’s immediate investment plans? Can you share some information with us?
We have already made big investments in automation and digitalization in both Europe and China in large scale. RHI Magnesita Digitalization Hub was established in Shanghai in 2019 to help the company achieve digital transformation with the help of the booming AI and Industry 4.0 technology and talents in China. We developed the global Hub in China instead of the headquarter because the changing is much faster here. We started with quite a few trial projects in China. If the projects are successful with our partners, we will roll them out globally. Automation and digitalization of RHI Magnesita will be developed or created from China but for the whole company worldwide. We will have many more talents in this field and work together with different partners.
Refwin: We have heard that you have an App for refractories in cement industry, right?
It’s still under development and hopefully could be finished within this year. Our Cement partner is building up a nearly 40,000m² factory with automation manufacturing line in Chongqing. And we organized RHI Magnesita Intelligent Manufacturing & Industry 4.0 Forum in July. Around 50 business partners and customers from Industrial Business as well as local government joined. We shared our experience and got a lot of inputs from our partners and customers which fit in exactly with our strategy. We will continue with this win-win exchange.
Refwin: What’s the target of RHI Magnesita in China for 2020?
The first priority for us is to keep our employees safe, especially under the circumstances of COVID-19. But we are still keeping our business growing and quite coincident with our budget plan.
“Talents are the most important asset for the future of the company” AND “Our Job is to make our customer more successful and do it in the most efficient way by also reducing our cost position ” said Marco Olszewsky
Refwin: Great! Thank you so much for taking time to accept our interview.