Investing In Ceramics - ESK
Elektroschmelzwerk Kempten GmbH (ESK) was established in 1922 in Kempten, Germany. Today, with its C&C subsidiary in Bazet, France, and other possible acquisitions still to come, the company’s name and influence span the globe. ESK manufactures a variety of high performance engineered ceramics from carbides, borides, and nitrides produced in-house at its facilities in Kempten—but its main “product” is service. Behind each change the company makes in its product line or business operations is the desire to provide solutions to customers’ problems, and it is this driving force that will continue to make ESK a reckoning force in the ceramic industry for decades to come.
The “ESK Culture”Like any other company, ESK faces its share of challenges. The pressure to reduce costs while maintaining a high level of innovation, for example, can be almost overwhelming. To ensure that each of its processes are as efficient as possible, the company hired a team of consultants two years ago to implement a plan for systematic cost reduction. This step has helped save the company millions of dollars per year.
“The ideas generated were a natural part of an ongoing business,” said Paul Lindblad, managing director of ESK. “But what the consultants gave us was a system for assembling the ideas together, for prioritizing them, as well as tracking their success after implementation.
“Our goal is to build systems that enable cost reduction to become part of our culture,” Lindblad said.
Environmental concern is also a major part of the company’s philosophy. Beyond legislation and government requirements, ESK and its parent company, Wacker-Chemie, have chosen to do as much as possible for the environment. To that end, the companies participate in the initiative called “Responsible Care,” which mandates that participants have a desire to do more than legislation requires and communicate any environment-related actions to the surrounding community.
In general, ceramic processing does not create major emission issues. However, management of cooling water from the furnace processing is an ongoing effort. ESK balances its needs between heat exchangers, a cooling pond, and recycling back to the local water supply.
As with any urban manufacturing environment, noise can often be an issue. “We have residential neighbors right next door,” said Lindblad. “Because their property is so close to our industrial site, we have to be careful about noise from operations. These issues have been resolved by building housings around compressors and other equipment to reduce their noise levels.”
Lindblad admits that some of the changes they have implemented can be costly. But for ESK, being good neighbors is part of the business. “Europe is sensitive to environmental concerns, and Germany is particularly sensitive,” said Lindblad, “Especially in this scenic part of Bavaria, with its impressive mountains and meadows, there is a certain natural motivation to be environmentally sound.” Rather than waiting for feedback from the surrounding community, ESK actively goes out and solicits comments from its community. According to Lindblad, their system has worked very well so far. But, he emphasizes, “the environmental issue is not forced on us. The whole company embraces it as part of our culture.”
In the third quarter of 1999, ESK was certified to the ISO 14001 environmental quality standard as further evidence of its stand on environmental issues. But while the ISO certification provided the documentation to back up the company’s claims, it really just solidified what had already been in place for years. “Our environmental consciousness and environmental management system has been in place for at least five years,” said Lindblad, “and it’s been very good for us.”
New Product DevelopmentIn the same way that ESK reaches out to its community, it also strives to “partner” with each of its customers. “Our product portfolio is still focused on some of the hardest and chemically resistant materials in the world (non-oxide ceramics), and that fundamentally hasn’t changed. What has changed is moving the emphasis from selling the materials to partnering with customers to find what problems our materials can solve for them.” said Lindblad. As for new products, there are upcoming applications in consumer goods, in the coatings business and in automotive applications. But in general, “we are out trying to give cost effective solutions to customers’ problems,” said Lindblad.
To ensure that the company maintains this focus, ESK spun off its silicon carbide powder production into a separate business, ESK-SiC, in 1998. This action has allowed the company to renew its dedication to value-added products and advanced applications.
According to Lindblad, in addition to being the world’s largest producer of boron carbide and evaporation boats, ESK’s main advantage in the marketplace is its understanding. This understanding comes from ESK’s 80 years in ceramics processing—from powder preparation to sintering and machining—as well as its low staff turnover.
“We have been lucky to retain excellent people. The average employee stays at ESK some 35-40 years,” said Lindblad. “They know what they are doing and what projects ESK has done in the past. When customers talk to us and say they want to do a certain project, we can say ‘We had something like that 10 years ago’ and, with some tailoring, we can often meet their needs more quickly than other companies based on our past experience.”
The company’s mission statement is basically composed of three words—experience, service and know-how. These three words are the guiding force in any product line the company manufactures. “We’re not just selling a commodity,” said Lindblad. “We’re providing added value by solving problems, and our employees have the experience and the know-how to handle just about anything in our field.”
Into the FutureSolving customer problems remains ESK’s greatest goal as it heads into the 21st century. On a financial level, the company aims to grow in excess of 10% to 12% per year, both through new product applications and acquisitions. In early 1999, the company acquired Céramiques & Composites S.A. (C&C) in Bazet, France, a manufacturer of sintered silicon carbide ceramics. Other acquisitions may be in the company’s near future, “specifically in the U.S., where we’ve had a long and very successful presence with Wacker Engineered Ceramics,” said Lindblad.
While ESK remains headquartered in Germany, it partners with customers around the world and will continue to maintain an international vision. The two managing directors of the company—Dr. Christoph von Plotho, a German who has worked in Italy, France and the U.S., and Paul Lindblad, an American who has worked in the U.S., Singapore and now Germany—are further evidence of this vision.
“We’re not just ESK, Kempten anymore,” said Lindblad. “With Céramiques & Composites in Bazet, this is really our first step toward being more global.”