As the new CEO, Jan Weber has headed the Possehl Erzkontor business since February 2020. Working together with the Erzkontor management team over the past months, he developed the future strategy of the Lübeck trading company. Erzkontor intends in future to increase their verticalisation and diversification under the motto "ROAD#2024PLUS".
Refwin: Before joining Possehl Erzkontor, you have extensive management experience as a regional vice president, COO and CEO. What attracted you to join the company? What optimizations and improvements will you bring to Possehl?
Mr. Jan Weber: After I finished my last mandate in summer 2019, my family decided that we would move back to our hometown Lübeck, where Possehl Erzkontor’s Headquarters are located, after we lived abroad and elsewhere in Germany for some time. During my professional career, I worked in the mining industry and lime business for 23 years which was enough motivation to return to the exiting raw material world. With the CREMER group (Parent company of Possehl Erzkontor) we have a shareholder which is looking for growth and development, thus we were able to align our views about the future potential of Possehl Erzkontor.
Refwin: As a 105-year-old global minerals and raw materials trading company, can you introduce the company's history and achievements? What do you think is the key to Possehl Erzkontor’s success?
Mr. Jan Weber: Of course, the long and successful history of the company and our experienced employees are building the backbone of our strategy. As a Lübeck citizen, I know Possehl Erzkontor very well, but the great reputation of our company globally surprised me. Possehl Erzkontor is generating today some 250 to 280 MEUR as top line and is active in almost all regions around the globe. For many decades, we are not only serving the refractory business, but serving the steel industry as well as other applications such as plastics, foundry, welding and brake lining. Now it is important to implement our strategy road#2024PLUS with a focus on verticalization and diversification.
Refwin: Recently, Possehl Erzkontor started the process of global change. Can you share the background, target, and specific implementation plan?
Mr. Jan Weber: During spring 2020, we defined our strategy which got approved in the summertime by our shareholders. The mineral markets as well as the trading structure changed in a way. In order to position ourselves with a long-term view and to be a sustainable cornerstone of the CREMER portfolio, we defined our vision statement. The target is to be the first team of choice around mineral solutions for our customers. Thus, we will invest in the verticalization, moving ourselves deeper into the value chain, and diversification, using our knowledge and partly product portfolio to develop into new customer segments.
Refwin: Possehl Erzkontor has taken over the majority share in the mineral grinding plant Mineralmahlwerk Hamm. What are the main considerations for making this decision? Does it mean Possehl Erzkontor will gradually transform from a pure trading company?
Mr. Jan Weber: Yes, the target is clearly to create more value for our customers. The verticalization can be backward integrated towards processing, logistics, and raw materials. But we are evaluating as well the market approach around technologies and platforms. We are ready to invest in the value chain as well in other regions outside Europe. To reach such target, we are working with experts in different kinds of projects. As we believe major trading will happen in the future through platforms, digitalization is a focus area where we currently invest in Human Resources capacity.
Refwin: As a well-known trading company in the refractory industry, Possehl Erzkontor cooperates with suppliers all over the world. What are the criteria for supplier access and selection? How do you manage this huge global supply network and ensure efficiency, competitiveness, and synergy? Can you introduce the specific cooperation model?
Mr. Jan Weber: We are currently preparing and defining such a model. Possehl Erzkontor is already today part of a bigger network offering many possibilities. But we have agreed to open up a function being responsible for strategic issues in the world of purchasing. Looking ahead, sustainability will be a megatrend and one dimension of evaluating potential new sources. The new function will have as a main goal to open up new partnerships in order to secure the future demand of our customers in the different industries. Of course, in order to reduce risks, we aim for different specifications as well as geographical regions. The function will of course be the main driver for our diversification process.
Refwin: An efficient sales network is another core competitiveness of trading companies. Can you share your insights and management experience to build and remain competitive (from sales side)?
Mr. Jan Weber: Structure follows strategy. We have defined a new global set-up called “ONE Erzkontor”. The business owners will be the sales force and face to the customers and structured in 4 divisions and 4 regions. The divisions (Refractory & Steel, Industry, Sustainability & New Biz and Chemicals) will be responsible for strategic purchase and the global sales approach. The Regions (Europe, North America, Latin America and Asia & Middle East) will run the operative business. Our aim is to move closer to our customers and will challenge us every day to improve customer benefits. The new structure will be valid from 1st of January 2021.
Refwin: Both of your customers and suppliers are based in different countries (different cultures, far geographic distance, different demands, etc.). How do you connect both sides effectively and efficiently and ensure all the needs can be met timely? What are your unique advantages in warehousing, logistics, and procurement and sales models?
Mr. Jan Weber: Working with different cultures can be so much fun. One of our company values is respect which is building the base in a cross-cultural structure. We made sure that all cultures are part of the top and middle management. Through the regions, we have decentralized power which will help and support, too. Having a global organization, it is easier to evaluate business models based on rational and sustainable parameters.
Refwin: The epidemic has caused a sharp decline in global demand. What specific measures have you taken to promote the achievement of sales targets? What’s the result of those measures?
Mr. Jan Weber: As more than half of our top line is generated by Refractory & Steel we got our challenges, too. Through good cost management and countries like Brazil and US, we maintained a decent profit generation. Looking again at our strategy: diversification will help in any crises position. In addition, we aim to develop our international sales force to further improve our presence in strong potential regions. Such investments will be seen in Europe where certain business activity slowed down for us as well as in North- and South America where we have seen great development during past years. Especially in Latin America, we were able to kick-off already the diversification into industries such as textile, gas & oil as well as the food industry. Besides the minerals, our chemical business grew lately.
Refwin: Could you share some of your points on the future trend of the global refractories industry? How does Possehl Erzkontor deal with this change?
Mr. Jan Weber: We see our customers offering rather solutions and not just physical products. Further, we believe service as such is getting higher importance. Last but not least, recycling and sustainability might become a clear game-changer in the future. In all these areas we want to support our customers around the world.
Refwin: Thanks for your time for accepting Refwin's exclusive Interview. Wish Possehl Erzkontor to achieve "ROAD#2024PLUS" soon.
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