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New focus saves welding companyFive years ago, welding company Weissenborn A/S was close to shutting up shop. Then a new director and co-owner altered its course. Today the company is enjoying a new lease of life as a specialist supplier to the wind turbines industry. Adding so much value to the products that it is worthwhile to produce them in Denmark is decisive for the strategy Peter Møller (left) has introduced at Weissenborn, which produces components for the wind turbines industry. Images: Joachim Ladefoged
The year 2006 was a turning point in the history of Weissenborn A/S, a long-established welding company, based in Vejle, Denmark. In the wake of a period with seriously red figures on the bottom line, a dramatic change of direction was required if the company, which was founded in 1885, was going to survive. The change in course was marked by the arrival of Peter Møller. With a solid background in industry and sales, he became co-owner and new CEO at the company. His task was to transform Weissenborn into a modern and viable company. Despite difficult conditions in the reconstruction phase, not least in the form of the global financial crisis and fierce competition from low-cost countries, Peter Møller and his team have succeeded in breathing new life into the Vejle-based company as a supplier to the wind turbines industry at home in Denmark and on international markets.
The company supplies so-called critical components, requiring stringent safety documentation, to the US, Scotland, Germany and Spain. To achieve this, Weissenborn has been subjected to drastic remedies, which included the company's saying Goodbye to many customers whose orders were not profitable.
»We set a tough process in motion, which meant that we had to break with the habits of the past. Our goal was to create a niche from which we could act on our own premises instead of trying to supply the same products as every other components manufacturer and thus to avoid competing only on the price parameter. We decided to become a highly specialised supplier, concentrating especially on producing welded aluminium components,« Peter Møller explains.
A demanding customer
He adds that it was completely natural for the company to focus on the wind turbines industry in order to find its future customers. »The wind turbines industry is interesting because it works with extremely high requirements in relation to quality and reliability of delivery. The wind turbines industry also demands that its suppliers are innovative and prepared to make a critical assessment of whether any given production can be done differently. The industry expects qualified feedback on many issues including cost efficiency and is therefore a very demanding customer. If a company can meet these requirements, there is a unique opportunity to develop the business,« explains the CEO, who recently landed a wind turbine manufacturer operating locally in South Korea, as his company's newest customer.
Adding so much value to the products that it is worthwhile to produce them in Denmark, higher costs notwithstanding, is decisive for Peter Møller's strategy for Weissenborn. »There are huge challenges ahead. In future years, we have to continue to add value to our products to ensure that we remain ahead of our toughest competitors. This will be a tough contest. We are wise to the fact that our competitors can easily play the same game,« he says. He adds that Weissenborn has learned that success is also a matter of having the courage to say No to an order and maintaining your strategy, even when the order books aren't full. This was the case for Weissenborn just over a year ago. The company made an offer on a job that was far removed from its predetermined core competences. »In the end we declined the job and we believe that maintaining sharp focus on what we really want to do is key to our gaining momentum and getting things to run on the right track.«
He emphasises that creating profits is tough as a components supplier is never first in line when it comes to calculating contribution margin.
Outstanding skills
»We are trying to change this by defining areas in which we can develop outstanding skills and gain a larger share of the value chain by supplying larger units with finished specialised products.« Peter Møller believes that far closer cooperation between companies in the components industry is required to ensure that their industry develops further. »I think that the effect of the financial crisis is that we are at a watershed. We have reached a point at which we are all willing to enter into serious and binding cooperation – we are ready to stop seeing one another only as competitors.
I'd like to see Weissenborn in the role of mother ship for a flotilla of companies, each with its own special skills, which will be in a position to bid for jobs with major customers. This is nothing new in Denmark, the country in which the cooperative movement and its solidarity philosophy was born. We will have to set about the cooperative concept again – but we have to have faith in each other and to drop Jante's Law, an unwritten Scandinavian tendency to see success and achievement as unworthy and inappropriate,« says Peter Møller.
Last year Weissenborn achieved gross profit of DKK 6.5 million. The company's earnings before tax were DKK 1.5 million. The company has 34 employees.
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