From Shutdown to Head Start – Taking the Fear out of Turnarounds

Bilfinger has developed from a construction group to an engineering and services group. This positioning is exemplified by the Industrial business unit. PROCESS asked Dr. Michael Herbermann, CEO of Bilfinger Industrial Services, about the new organization model in the business unit and the objectives of the market leader in industrial services.

Mr. Herbermann, Bilfinger Industrial has been reorganizing itself since the turn of the year. The two subgroups, Industrial Technologies and Industrial Services, operate as limited companies with equal rights. What changes does this mean for the industrial services arm of the company?

Dr. Michael Herbermann: In the organizational realignment of the Industrial business unit we are implementing a model that in terms of principle was created in our structure four years ago with the acquisition of the former MCE. As part of the process of integrating MCE, we bundled companies whose services are concentrated in the main on the planning, design and construction of plants, plant components and supply equipment in the Plant Technologies division. Essentially, these companies and the units of the newly added Tebodin group form the Bilfinger Industrial Technologies subgroup. So we have simply reshaped the existing structure organizationally. We have many years of experience in creating synergies between the regionally oriented divisions focusing on industrial services and the Plant Technologies division. And we will continue to do so in the future with the Bilfinger Industrial Technologies unit.

With 30,000 employees, the Industrial Services unit is far bigger than the Industrial Technologies unit (8000) in terms of numbers. Just how equal can they be, then?

Dr. Herbermann: That question doesn’t arise for us. The acquisition of the Tebodin group has permanently strengthened not only the consulting and planning expertise in the Industrial segment, but also our international presence as well. The previously regional focal points of Industrial Services are being outstandingly complemented by new sites, particularly in Asia and the Middle East. That is the ideal foundation for our strategy of further targeted internationalization. Together, the two corporate units cover all requirements in the life cycle of a process plant, from design through to maintenance.

Where do you see technical as well as regional gaps in the portfolio?

Dr. Herbermann: Internationalization and the expansion of the portfolio have been and will remain the foundation for our strategy as the leading provider of industrial service solutions. Pipeline construction, manufacturing, assembly and EI&C are hugely significant for us alongside maintenance and the insulation, scaffold construction and corrosion protection businesses, which remain important. We do not have the same breadth and depth of technical services in all markets and so we are varying the emphasis when it comes to acquisitions. One of the major issues for us is to continuously develop our method and process expertise and make it available throughout the organization through know-how transfer. We want to set the standards internationally in industrial services. The target markets for further acquisitions include North America, India and Southeast Asia, Turkey and the Middle East.

You have particularly bought EI&C companies over the last two years. Are you hoping to compete with process automation suppliers in the future?

Dr. Herbermann: In industrial services process optimization is a key lever for optimizing operative maintenance. That’s why EI&C has been part of our spectrum of services for years. To expand our portfolio regionally, we have focused on strengthening in Central Europe especially, but also in Scandinavia and Great Britain.

The focus of investment by the process industry is on India and China. You have made acquisitions in India, but it’s not so simple in China. What is your strategy for following your industry partners in this market?

Dr. Herbermann: China is not a target market for us at the moment. Despite the size of the market, we do not yet see enough demand for higher-quality maintenance concepts and processes. It is our view that the market is still not mature enough for our understanding of maintenance, and we have not yet registered any significant demand here from our global customers.

Will you be able to implement your strategy of developing from pure service provider to strategic partner on a one-to-one basis in an international environment?

Dr. Herbermann: It is particularly in an international environment that our customers feel it important to have a strategic, international partner in industrial services. We are not, after all, pursuing our growth strategy as an end in itself, but because many of our customers are internationally oriented and want a cooperative partnership across all locations that will benefit from the inflow of shared experience and the findings obtained in the process.