ebm-papst, a global leader in the production of fans and electric motors, is setting the stage for the next phase of its evolution. In 2022, the German manufacturer launched its programme “Making the future together”, creating the conditions for further growth, being sustainably successful and fit for the future.
As part of this strategy, the company will exit the automotive market and will direct its resources towards its core business. Also, ebm-papst will accelerate the expansion of its ‘local for local’ initiative to further strengthen and increase the independence of its Asia, Europe and North America regions. Delia Ungur, Managing Director ebm-papst Automotive & Drives Romania, explains in an interview for Automotive Tomorrow, for this change of strategy will bring for the company in Romania, how the business evolved in 2022 and how the company focused on training the employees in order to prepare them for the future.
Automotive Tomorrow: How did the company’s business evolve in 2022? The manufacturing industries is facing a lot of disruption in the value chain. What was the biggest disruption the company has faced in the last year?
Delia Ungur: In Oradea, we currently manufacture assemblies and sub-assemblies for motors and fans that are used in the automotive, medical and industrial ventilation and heating industries. As of 31 March 2023, we will end the financial year 2022/23 with a turnover of EUR 64.2 million, up 16.75% year on year and 506 employees. The automotive industry represents one third of our business in Romania, whereas at group level, its contribution to turnover is less than 10%. While in 2020 and 2021, all efforts were focused on securing the necessary resources for production (measures to keep the pandemic under control and securing critical raw materials – electronics, plastic), in 2022, the focus was on price control. With a few exceptions, in 2022 customer orders returned to their previous level. The disruptions – alternating periods of higher and lower order intake – came more from planning errors in the supply chain for both customers and suppliers. We are a rather young company – last year we celebrated 5 years since we established operation in Romania. Three of those five years were crisis years. In the industries we work in, product quality is extremely important and can only be ensured with a stable and well-trained team. Our strategy throughout this period has been stabilising the team and developing technical know-how. We have used this time to increase the professional skills and poly-skilling of our employees. In this way, we managed not only to keep all jobs and work without interruption but we also grew the business. At the moment, we can say that we have a company in Oradea with a high degree of adaptability and flexibility. We can change the production plan and start production from zero to 100% overnight.
Automotive Tomorrow: How do new trends in the automotive industry, mainly e-mobility influence the company’s manufacturing operations and development strategy?
Delia Ungur: As part of the programme “Making the future together”, the group’s management has decided to exit the automotive sector, where the market has become highly competitive and volatile, and to reallocate the related resources to the production of fans for air conditioning and heat pumps. Of course, this will happen within a reasonable timeframe for both our customers and suppliers. We will continue to manufacture and supply motors for the intralogistics industry and for medical applications, as well as for various automation systems. Another important aspect we are focusing on in our growth plan is to accelerate and expand our “local for local” strategy to further strengthen and increase our independence in our regions such as Asia, Europe and North America. This strategy involves not only getting closer to the customer but also developing a supplier base in close proximity. Least, but not last, by 2025 we will reduce our carbon footprint to zero and we already have a roadmap and a climate strategy. For Oradea this means that after a period of stabilisation, we will resume growth. In 2023, we will open our third factory for the production of industrial fans for ventilation and air conditioning systems. We will grow both in terms of staff numbers andskills levels. We need new colleagues in all production support departments: finance, HR, administrative/facility, IT, maintenance, industrial design. We will also strengthen our production teams and continue to hire quality, process, technical and operating engineers. At the end of last year, we already set up a small design department working together with the R&D teams in Germany, and in 2023 we are working towards growing this department further.
Automotive Tomorrow: How do you train new employees so that they have the necessary skills and competences for the future?
Delia Ungur: We knew we were bringing new products and processes to the local industry from the start. We are looking for people with basic specialist knowledge and a willingness to learn. In the beginning, each of our colleagues went to training in Germany for periods between 6 weeks and 6 months. Now for many projects, we have the skills in the company to do these training courses in the factories in Oradea. At the same time, we are always receiving new projects for which our colleagues are training in our more mature factories in Germany or Hungary. We encourage continuous learning. Any of our colleagues can apply to work on a new project and develop new skills.
Automotive Tomorrow: How have recent years changed the risk management strategy in relation to suppliers and business partners?
Delia Ungur: Throughout this challenging period, one important advantage was that as a group we have long-term business partnerships with both customers and suppliers. Our priorities have been to ensure business continuity rather than profit maximization, maintaining strategic partnerships with customers and suppliers, increasing the company’s ability to respond quickly to change by investing primarily in people. These priorities have led us to new growth opportunities such as: implementing the new “Making the Future Together” strategy; accelerating and expanding the “local for local” strategy; business development through investments in ventilation technology and heating technology.
Automotive Tomorrow: What are the investment plans of ebm-papst for 2023?
Delia Ungur: ebm-papst plans to invest €155 million (+10%) and is accelerating the expansion of its “local for local” programme to strengthen and increase the independence of its regions in Europe, Asia and North America. Of this, €130 million will be allocated to research and development. ebm-papst is focusing on digitisation, aerodynamics and acoustics, energy-efficient products and concepts, as well as expanding electronics and systems capabilities, with the main focus on GreenIntelligence and ventilation and heating technology. In Oradea we have so far invested €18.9 million in production equipment. After two years of stabilisation, we are resuming the growth of production capacities and we are aiming for investments of EUR 3.9 million in 2023.
Delia Ungur, Managing Director ebm-papst Automotive & Drives Romania “In Oradea we have so far invested €18.9 million in production equipment. After two years of stabilisation, we are resuming the growth of production capacities and we are aiming for investments of EUR 3.9 million in 2023.”
ebm Papst Oradea in numbers
- 64,2 million euro revenue for 2022/2023 fiscal year (31 March 2023)
- 16,75% growth compared to 2021/2022 fiscal year
- 506 employees
- 1/3 of activites in Romania dedicated to the automotive industry
- under 10% revenue of the automotive activites contribution to the total group revenue
