Kloeckner Metals in 2017: An interview with Kaha Avaliani

2018 certainly has a lot to live up to, following a successful 2017 for Kloeckner Metals UK.

With a focus placed on digitalisation and investment, 2017 enabled us to continue providing our customers with the highest level of service; developing our offering and making the purchase of steel more straightforward and accessible.

We sat down with Kaha Avaliani, Executive Vice President of Kloeckner Metals Europe, Region West, to talk about the accomplishments of 2017, how the wider industry can affect business and his predictions for 2018.

Read more below…

1.    What were the 2017 successes for Kloeckner Metals UK?

2017 was a good year with several positive developments. The launch of our Online Shop must be a highlight, following a successful launch that saw an immediate uplift in traffic and online revenue which was great considering it was just the beginning of the initial process.

We have also seen a positive development in our Value Added Services as we invested in new machinery towards the end of 2017. In November, we received delivery of the FICEP Endeavour Saw and Drill line which will hugely benefit Westok. And, more recently, we have launched the LT14 Tube Laser which is sited at Dudley and offers new opportunities for our customers. With Value Added Services in general, we had a very positive development last year.

Earlier in 2017, we ran our Customer Satisfaction Survey which came back with positive feedback. We obviously still have areas to improve, but it is always beneficial to hear from our customers.

2017 was a year of improvements and following audits towards the end of the year, we acquired the new ISO 9001:2015 and ISO 14001:2015 certifications. We also saw a major turnaround in our plates and profiling business, based in Durham, where business went in the opposite direction to the market. It improved dramatically compared to 2016.

So overall, 2017 was a good year for Kloeckner Metals UK.

2.      Was there anything that happened in the wider industry that had an impact on Kloeckner Metals UK?

I think that of course, the elephant in the room is the Brexit development, or no development depending on which way you want to look at it. As I mentioned earlier, manufacturing had a pretty good run and we will see if it continues into this year as well,

it is a bit too early to say for 2018, but nevertheless. Our Export-focused customers benefited from the devaluation of the British pound, and this also helped us to grow our Value Added Services.

But there was a gradual negative development for the construction sector, which is one of the two main sectors that we serve. Towards the end of Q3, that sector went into an official recession, because they had 2 consecutive quarters of negative growth. So, of course, it had a somewhat instrumental effect on our performance, but it was also an issue for everyone in the industry.

I think it’s important for us to continue to focus on investment, as we did throughout 2017.

3.       What did the introduction of the Online Shop mean for Kloeckner Metals UK?

Well, it has certainly brought the business into the 21st century and this is also evident in the overall business environment around us. Equally so, it is important that our employees see us as a progressive company to work for, so introducing these modern tools gives our colleagues good motivation for learning and development.

It is also important to us to make it easier for our customers to work with us and offer flexibility. With our Online Shop, customers can have an easy access to place their new orders or view their order history 24/7. We have seen many users purchasing products over the weekend and during out of hours since introducing this service.

We’re obviously looking to further develop the Online Shop, with a view to widening our offering of products online so that all our products are available. Among other initiatives, we will also be looking to introduce the option to pay with credit cards and a sophisticated tool which will enable customers to order Value Added Services online.

4.       Why was it so important for digitalisation to be a priority for Kloeckner Metals UK in 2017 and do you think it has been a success?

Our businesses in other countries have had the Online Shop service for much longer, in Switzerland and the Netherlands for example, although not at the same level as today. So, sometime in 2015, senior members of the team here at Kloeckner, through conversation with other business leaders, concluded that we needed to accelerate the process. Obviously, we didn’t have to start from zero as we already had some tools in place but this became the main drive for Kloeckner in the UK.

The world around us is changing and it’s almost impossible to imagine that other companies and industries don’t have or aren’t considering having these tools available. These days it’s very common so why shouldn’t we do the same? Without digitalisation, Kloeckner Metals UK wouldn’t have the complete ‘One Stop Shop’ capability.

5.      Moving into 2018, what possibilities will the introduction of the Jumbo Laser bring?

We already have 6 tube lasers; however, these lasers operate within a certain size range which limits the industries we can work with. For example, our current tube lasers could not fully cater for the large processing requirements of the Offshore, Construction, Agricultural or Defence industries.

We are always looking at trends in the marketplace and are lucky to have business in other countries where we can share experiences. Recently, it became apparent that it was a trend to use tube lasers for bigger pieces and, as we were unable to do that in the UK, it was logical for us to invest in the LT14 Jumbo  Laser.

It’s exciting because it is only the second machine of its kind in the UK and opens up lots of opportunities for us in different sectors. Plus, we already have live commercial orders!

6.       What else does Kloeckner Metals UK have planned for 2018?

2018 will be the year of Kloeckner Metals UK penetrating further into different sectors! This will be enabled by our new machines which allow us to give customers new Value Added Services opportunities. There will be a continued focus on digitalisation too, and looking at a wider product offering.

Our main drive will also be a focus on efficiency throughout 2018, looking at cost control to weather uncertainty. We’re entering a certain business environment now, due to Brexit, so it’s important for us to keep this in mind.

7.       Will 2018 see the further integration of digitalisation into the business? What will this mean?

Yes definitely. As we spoke about previously, we’ll be looking to enhance the features of the Online Shop to make the service even better for our customers. We’re also launching our eProcurement service in the very near future which will enable our customers to connect their own ERP to our Online Shop. We already have several customers expecting to have access to this feature.

We’re looking to carry out wider improvements to our digital environment and this will include a new digital software which will increase the efficiency of our transportation and logistics functions.

8.      Are there any industries that Kloeckner Metals UK will be placing a focus on in 2018?

Yes, as we discussed previously our recent investments in new machinery will enable us to better assist wider markets, ie. Construction and Transport with their larger processing requirements, whilst we are also seeing opportunities within Offshore and Defence sectors. We already have significant live projects for Stainless and Carbon Steel within the Nuclear sector and we will continue to penetrate this sector too.

The automotive sector is doing so well in the UK currently, and we have all the relevant equipment at our site in Dudley as well as experience in working with car manufacturers, so we will keep pushing into this sector. We’re starting to join in the drive and work on major infrastructure projects, like HS2, Hinckley Point C and others.

Additionally, the Oil and Gas sector is recovering and this is good news for our industry.

9.       How do you see 2018 panning out for the steel industry?

It is early to tell and as always, opinion is a bit divided so it depends on whom you ask. We’re not expecting material growth in demand, Brexit isn’t helping anybody. But, the key question to ask is what is going to happen with the Construction sector. They are the biggest consumer of steel across all sectors so the outcome will have an industry-wide impact.

10.       What are you most looking forward to in 2018?

Well, I’d like to see everything we have talked about in place! We will certainly be continuing our focus on Value Added Services, particularly with the new machinery and equipment we have invested in so I’m looking forward to seeing how that will continue to grow. We’ll also continue our emphasis on digitalisation throughout 2018 so it will be interesting to see where we are with that.

I’m hoping that by the end of the year, thanks to our new machinery, we will see some new and exciting projects in place. And, obviously, I would really like to see the Construction sector recover.

 

It’s clear that 2017 was a good year for Kloeckner Metals UK, with plenty to look forward to as we move into 2018! Make sure you’re following our Facebook, Twitter and LinkedIn accounts for the latest news and updates throughout 2018.

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