Investing In Ceramics: Still Standing

September 1, 2005
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After 80 years in business and a number of operational changes, Riedhammer is poised to provide new firing solutions to the ceramic industry.

The first kiln for electrodes, built in 1924.
Riedhammer GmbH, based in Nuremberg, Germany, has produced more than 8000 kilns of virtually every type for a range of sectors. A sampling from The Guinness Book of World Records is a testament to the company's prolific output: largest kiln produced (4000 cubic meters); most powerful kiln (9000 kW); fastest firing cycle (25 minutes); and heaviest kiln (18,000 tons). In fact, the company's ubiquity suggests that a number of the items encountered in everyday life-from spark plugs to electronic circuit board components to bathroom fixtures-were likely produced in Riedhammer kilns. Nevertheless, success has never been a given for the company. Over the years, Riedhammer has overcome many obstacles-financial and otherwise-on its way to becoming a premier global kiln manufacturer.

A modern kiln with a mobile head for firing ceramic oxides (up to 1800°C).

A Storied Past

In 1924, engineer and Nuremberg resident Ludwig Riedhammer decided to start his own company for the development and construction of industrial furnaces for manufactured carbon. The aluminum and steel industries were growing rapidly at the time, and large quantities of graphite anodes that could only be manufactured through a special baking process were needed. The pit furnaces developed by Riedhammer were soon accepted throughout the world, allowing the company to overcome the recession of the 1930s and focus its attention on a new branch of business-firing porcelain. Riedhammer reportedly became the first company to build electrically heated kiln plants for the decorative firing of porcelain. With electrically heated kilns, firing time was reduced and end product quality was improved considerably. The subsequent introduction of gas-heated tunnel kilns for the glaze firing of porcelain marked another milestone in Riedhammer's firing technology. Capitalizing on its success, the company expanded its operations and launched a worldwide export business that extended all the way to Japan and Manchuria. Interestingly, a licensing agreement with Mitsubishi signed in 1939 still exists today. The 1940s saw the ascension of Hans Riedhammer, Ludwig's son, to the top position at Riedhammer. Though further expansion of the company was temporarily hindered by the destruction of World War II, Riedhammer rallied in the '50s to meet the demands of the booming electronic and electrical appliances market. Kiln plants for the calcining and sintering of hard and soft ferrites-indispensable components of electronics and electrical engineering-were developed during this time. Pusher-type kilns (featuring tray conveyance, adjustable atmospheres and pressures) and rotary kilns also proved to be essential means of production for ferrite manufacturers. Current president Peter Riedhammer joined the firm in 1976. Subsidiary companies in Switzerland, Great Britain and the U.S. were also founded around this time. Though the company continued to gain recognition for its fast-firing innovations throughout the '80s, 1990 distinguished itself as a year of strategic decision making for the company. Riedhammer sold its subsidiaries in Switzerland and the U.S., founded a branch office in Japan, and incorporated Georg Mendheim, a leading manufacturer of refractory kilns since 1870.

A tunnel kiln for bathroom fixtures.

Bumps in the Road

Since 2000, a series of unfortunate events has conspired to threaten Riedhammer's international business. In addition to a slowdown in the worldwide ceramic industry, the cost of European production has increased dramatically, and the euro-dollar exchange rate has slowed exports. Figuring a little internal restructuring was in order, Riedhammer began searching for a solid business alliance, which it found in Bologna, Italy-based Sacmi Imola in 2002. Aware of the safe synergy that the two companies had the potential to develop, a cooperative of mechanics from Sacmi, a leader in ceramic engineering, bought a 30% stake in Riedhammer GmbH. In May 2004, as Riedhammer completed a drastic reduction in manufacturing personnel, Sacmi's share in the company grew to 90%. A task force was organized during this time to specify the strategic actions the company would take to ensure a more agile and reactive business structure. According to Peter Riedhammer, the integration of the two companies has gone smoothly. "Since Sacmi has increased its share in Riedhammer, no changes have occurred in our relationships with our customers because our sales management staff remains intact," says Riedhammer. "Only our manufacturing activities have changed. We're much more concentrated on procurement and global logistics now that we have the support of Sacmi's existing production facilities in Italy, China and Mexico." Riedhammer suggests that the biggest challenge his company faced in its merger with Sacmi had more to do with societal differences than anything else. Riedhammer GmbH, on one hand, was a third-generation, family-run business, while its Italian counterpart was an 80± year-old cooperative with a firm labor structure. Despite this cultural divide, the companies have managed a complete integration, thanks in large part to the skills each team brought to the table. "The qualifying element has been-and continues to be-the quality of the company's upper-management relationship," Riedhammer says. "The value of the personal relations between the members of the board, Sacmi Imola and the new Riedhammer is the glue that allows for the creation of one powerful team."

Riedhammer's board of management. From left: Carlo Marzi, general manager of Sacmi Forni; Peter Riedhammer, president of Riedhammer; and Stefano Lanzoni, former sales manager of Sacmi's Whiteware division.

A Bright Future

The sharing and optimization of technical research and constructive application know-how is but one of the advantages of the alliance between Riedhammer and Sacmi, two leaders in the thermal machines field. Another benefit is a sales structure integration that complements specific sales activities in sectors and regions where the two companies were formerly competitors or were not particularly active. Moreover, it is thought that Sacmi's dimension and financial power will provide the revamped Riedhammer with new and more aggressive expansion operations. "Riedhammer's goals are to reinforce our position in the worldwide fine and technical ceramics markets, as well as the market expansion of kilns for anodes backing for the aluminum industry," Peter Riedhammer says. "We will also be able to strengthen our offering of tile kilns through Sacmi-particularly the Sacmi Forni division."

For more information about Riedhammer, contact the company at Klingenhofstr. 72, D-Nurnberg 90411, Germany; (49) 911-52180; fax (49) 911-521-82-31; e-mail mail@riedhammer.de; or visit http://www.riedhammer.de. More information about Sacmi can be found at http://www.sacmi.com.

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