Jose Berasategui, General Manager of GHI Smart Furnaces, interviewed in Heat processing magazine
“Traditional business models must be online ready to adopt new technologies” Jose Berasategui is General Manager of GHI Smart Furnaces with headquarters in Galdakao (Bizkaia), Spain. In this interview with heat processing, he talks about the impact of globalization, digitization and new technologies on traditional business models.
What is the core competence of your company?
Berasategui: GHI is an industrial engineering company with more than 80 years innovating in the field of equipment for the fusion, heat treatment and heating of metals. Our value proposition is to offer personalized comprehensive solutions to our customers based on our deep knowledge in processes and equipment including industrial furnaces, turnkey plants, technical assistance, digitization and consulting services to improve their results. Innovation, quality and long-term relationships are key components of our company’s DNA. We have more than 8,000 installations worldwide in different sectors including: automotive, aeronautics, steel works, aluminium recycling, renewable energy, among others. This affirm us as a global leader in segments such as aluminium recycling, heat treatment, hot stamping, wheel manufacturing plants and primary aluminium plants.
What management strategy do you prefer?
Berasategui: We empower our people, so that we can work together to achieve the company’s objectives and face together our challenges. We are great defenders of the millennial talent, defenders of giving confidence and responsibility to the top and middle management. Our company has 80 years of history and we are in a generational change that has been quite abrupt because during the last year we have incorporated 50 people, young talent, millennials with incredible potential that are passionate with the company’s challenges; veterans are giving the relief so that the new generations can contribute from
the very beginning.
What are the main challenges for the business development of your company?
Berasategui: One of the main challenges for our company is the digital disruption. We have worked hard to be ready to adopt new technologies, to be leaders in the industry. This has been a great opportunity as we are working hard in enhancing our value proposition of our 4.0 services to offer to our customers not only data monitoring systems, but also a value-added services such as predictive maintenance and improvement suggestions based not only on the captured data but on our expertise in the process and the equipment. This digital transformation will mean an improved competitiveness and increase in productivity not only for our customers but also for our company. The second challenge is the low-cost competition. We have seen that there are many companies in the market offering unreliable equipment that are mythologizing the process of investing in a new plant, a new equipment or a revamping project. In this matter we work handby-hand with our customers guiding and advising them in terms of the process and supplying reliable equipment and integral solutions. We ensure that the equipment’s features and the process results are preserved throughout its complete life cycle.
How much does your company invest in research and development?
Berasategui: Our company is highly implicated with R&D projects, innovation is part of our DNA. We work closely with research centres, customers and suppliers in the development of innovation of projects. We support our efforts with subsidies of the government that promote innovation in the region. Our most important projects in the last years are the results of joint efforts with key partners, to improve the equipment, the technologies and processes. For example, right now we are in a patent process of an innovative hot stamping technology with one of our customers of the automotive sector.
How does your company deal with the globalization?
Berasategui: Globalization has represented an important opportunity for GHI, as this has allowed us to work with different companies worldwide in R&D projects that resulted in advanced innovations. We have selected specific strategic markets in which we have differentiated technologies to compete in a global environment. Sharing value with industrial partners allow us offering to our customers the most efficient equipment in the market. We have developed a business model in which we can serve any company in the world; we have been an exporting company since the 1950s and nowadays, we can offer to our customers immediate aftersales service and solve their concerns in a timely manner based on our 4.0 technology.
What markets do you want to develop in the future?
Berasategui: We are focused on developing every geography in which our strategical sectors play a major role such as Asia, Middle East and Latin America. Countries like Japan, China, Egypt, Iran, India and Mexico are key for GHI’s future development.
How do you evaluate the business climate at the moment?
Berasategui: It is true that we are at a very interesting time, both in terms of project development and financial situation (GHI has doubled its turnover in the last two years). It is a context similar to the metal, steel and aluminium sector, where the emergence of Industry 4.0 is allowing us to access markets where we could not reach before and offer a much more complete service to our customers all over the world. The automotive sector is growing, and this affects our company positively as our equipment has many applications in this sector.
What is the most important market for GHI?
Berasategui: As of today, Europe and Latin America represent the most important markets. Although, we are focusing our commercial efforts in developing new markets such as Asia and Middle East.
How do you evaluate the latest economic developments in China?
Berasategui: China is the world’s largest producer of steel and aluminium, and the Chinese industry has evolved seeking for more efficient, environment-friendly and modern processes to offer value-added products. This positions us as a competitive supplier as we can provide technologies and solutions that are interesting for this market. The automotive sector in China is growing at a rapid pace and this represents a huge opportunity for our industry. For example, in the hot stamping industry, in which GHI is a leading supplier, China is the key growth driver as it is expected that its body safety structures for the automotive sector will be adapted to European standards, and they are focused in reducing the CO2 emissions, that lead to including wider use of hot stamping parts for structural components and the use of our technology.
Will the European economy continue to recover?
Berasategui: In our perspective, we are seeing that the market is performing dynamically because we are receiving a greater number of requests. Although, there is a huge uncertainty due to the political instability and new trade barriers that may affect sectors such as the automotive that is one of the main drivers of the European economy. According to the indicators of the European commission, the European economy will continue growing but at a less pace than it has been growing in the last 18
The number of Greenfield projects has decreased. What does this mean for your business?
Berasategui: GHI has seen this tendency from some years ago, and that is why we have done some efforts for having a balanced project mix including greenfield projects, equipment renewal and revamping projects, and new equipment projects. We have a balanced project mix and the greenfield projects are important but not fundamental for our company.
The heat treatment market is getting more competitive. How does this change your business strategy?
Berasategui: The market is more competitive, and we are facing this by adopting new agile systems and methodologies for project management. This allow us to adapt rapidly to the new market demands. Our people have the capacity to adapt to different cultures and we introduce ,very flexible technologies. At GHI we continue offering integral tailormade solutions to our customers, based in our deep knowledge of the process and the equipment and our way of working is supported in a long-term relationship, in which we share value with our customers and we ensure the quality of the equipment and a supportive after sales service that guarantee our commitment with our customers.
What technologies will change the industry in the future?
Berasategui: We have seen in the market that technologies such as machine learning, IoT and artificial intelligence will be crucial for the industry. We are conscious about the impact of these technologies in the industrial processes and we have worked in the last years to adopt some of them not only internally but also as an offering to our customers. Companies must step up their ability to digitize and exploit data analytic and redefine their processes and their core competencies to adopt these advanced technologies that will have a direct impact in future competitiveness. Some of these advanced technologies result in new business opportunities for the companies, better productivity, efficiencies, and new sources of income by digitizing products and services or new digital service offerings.
How will production change due to digitalization of the economy?
Berasategui: Companies that were manufacturing equipment are now able to sensorize them to offer value-added services such as full monitoring or preventive maintenance. These new services result in new sources of revenue and the challenge of evolving the business models. The digitalization of the economy has led to new business models such as equipment as a service, and with no doubt this will revolutionize the industry in the midterm. New investments in equipment that can support these challenges and organizational changes in terms of people, training and new capabilities must be analyzed. The digital connectivity allows the integration of all processes in a production site, leading to process optimization, lowering costs and improving operational efficiency. This demands a greater integration with customers and suppliers that can guide the companies to make better
decisions to make global improvements reduce the time to market.
What will be the impact of “Smart Factory” on traditional business models in the heat treatment sector?
Berasategui: Traditional business models must be ready to adopt new technologies, customers will demand it. The main impact for traditional companies may be in the decision- making process that will be more agile and data-driven. More flexible processes, higher quality products and shorter lead times will increase the need of having smart factories that imply smart, connected and efficient equipment, and a complete integration with a better process control.
Are you already working with predictive maintenance tools?
Berasategui: For GHI predictive maintenance is a key service. Our customer’s objective is to produce at 100 % capacity, avoiding production halts and supplying products without interruption. It is a priority for us to manage predictive maintenance and we have focused our efforts in the Big Data and IoT concepts, to offer the Beyond 4.0 services. Our furnaces are heavily sensorized with process measurements that we collect through our own platform. Combining the experience of GHI’s specialized engineers, the power of the tools for Big Data analysis and the real time data we are collecting continuously from the equipment, we are capable to calculate the key parameters that give us information about the performance of the equipment, alarms origin and frequencies, anomalies analysis and tendencies to predict the subsystems status. Our customers receive recommendations and advise about the steps to be done to maintain the best performance and increase productivity, based on the studies done over the Big Data analysis.
Additive manufacturing is a huge trend. What does it mean for your company?
Berasategui: This technology has a huge potential in the industrial sector. As of today, it is in a very incipient state for series production of metal components. In the future, it could be a new business line for GHI if those components need heat treatment. By other side, for our company, this could mean another way of sourcing as we can design new equipment without the obligation of adapting to commercial components, as long as additive manufacturing parts are economically competitive.
Will energy efficiency be more important in the future – and what will be the consequences for the heat treatment industry?
Berasategui: Since energy efficiency is important for the whole industry and specifically for our clients, GHI leverages its knowledge from the design process to consider it as a main parameter. This has led to strengthen the R&D efforts seeking for heat recovery processes, control systems, reduction of emissions and data management. As of today, there is a huge opportunity to improve the heat treatment process in many companies that have obsolete equipment, that may result in revamping projects to include state-of-the- art technology and include 4.0 solutions. Also, most of the companies are conscious of the benefits of having updated technology, that entails in having more productive processes and achieving the best results in terms of energy efficiency.
What effects will the climate targets have on the heat treatment industry?
Berasategui: The climate targets cause companies to take measures to having more efficient processes. At GHI we are focused on developing innovative solutions to provide the best equipment in terms of process and efficiency to reduce consumption and emissions. All of our furnaces are designed to be integrated into Industry 4.0, this allows the customer to have a process control and to reduce the CO2 emissions and energy consumption.
Link to magazine interview: