Hoffmann: Full steam ahead

(L-R) Martin Reichenecker, Chief Sales Officer, Borries Schüler, Strategic Product Management

By: Kathryn Gerardino-Elagio

Hoffmann celebrates its 100-year anniversary, a legacy that began with selling technical articles and metalwares in Munich, Germany in 1919. With the strength of its global reach, expansive quality and service programs, the company and its subsidiaries achieved record sales topping €1 billion for the first time in 2018.

This achievement comes on the heels of the company’s centenary as Members of the Executive Board, Martin Reichenecker, Chief Sales and Marketing Officer and Borries Schüler, Strategic Product Management (CPO) visited Singapore office. While Martin and Borries relish the opportunity to share with Kathryn Gerardino-Elagio of International Metalworking News for Asia, about Hoffmann’s long history, both are keeping their eyes firmly focused on what’s happening now and in the future.

Early stages

“Mr. Josef Hoffmann started with trading business for welding equipment. This is where the logo nowadays came from. During the last 100 years, a lot of things happened including products that concern cutting tools and hand tools. We are no longer a welding equipment business, but we are the largest tool distributor in Europe for the industrial environment. Hoffmann is present all over Europe, America and in the main parts of Asia,” explained Reichenecker.

Schüler added, “If we look at our history, we see the catalogue as one of the founding pillars of Hoffmann.  It was in 1936 that the first industrial catalogue of this type, which Mr. Franz Hoffman built that combines product listings from different manufacturers, and until today it is the core foundation of our business.”

Martin described Hoffmann as a very traditional player, transforming in the last 15-20 years to a real international one. “Becoming a big international player is something really different in the long term history of the company. We have a lot of things to improve in every market but the potential is there. We aim to be better than our competitors and to offer requested services to our customers,” he further said.

Adding in the market

Digital technologies are poised to forever change how products are made and delivered to customers around the world. According to Schüler, digital has always been a part of Hoffmann but they are now launching quite a lot of digital products to its clienteles and this will be a complete new experience.

“In the past, buyers can feel, look and experience the product. With digital, everything will be completely different. We are now focusing more on the processing side of our customers. We will try to help the customer solve their problems and in return provide them with the information they need. I think this will be a big step for Hoffmann, and also a big step for our all our buyers,” Borries said.

Reichenecker shared that they are adding another catalogue in digital or print. “We offer services, and behind this is a team of highly motivated staff that solves production dilemmas. Therefore, we don’t just sell tools to our customers; we bring added value by technical consultancy services. Our team will first look into the technical issues of our clients and try to find the best possible solution to help. I believe the best business model headline for Hoffmann is “System Partner,” he added.

Managing South East Asia

South East Asia (SEA) is receiving a lot of attention as a low-cost manufacturing region for offshoring. However, not every country has established infrastructure and favourable policies.  

Martin explained the different levels of development in every country in SEA; and admitted that they’re also struggling with the different levels. “On one hand it’s the industrial level; and on the other side, it’s how you get goods into the country. The different customs clearance procedures inside SEA delivering from Europe, are really challenging situations. But we must jump over the challenge; otherwise, we don’t have any rights to be present here. For sure, we have a highly equipped Singaporean market, and we have big chances in countries like Indonesia and Vietnam, but also trials come along with opportunity. Therefore, it’s okay to look for solutions to these markets,” he stated.

Reichenecker noted, “Trade balance is positive in SEA. It is producing for all international markets, and normally you have the highest quality requirements from your export markets to your production. We are positioned to provide quality technologies. And for sure this positive trade balance is helping us. It may not be present in every single production plant all over SEA, but it’s also on our side to convince the customer that excellence is important.”

Borries justified that the situation they face in SEA is also the same in Europe wherein every country has a different level of production situation. He revealed, “So you see, this is not new to us. What is important is the opportunity for Hoffmann to be present in every market in SEA. Why are we here? We are not just here to be a tool distributor. SEA has a lot of tool distributors on its own. We’re here to help customers understand production technologies, which are used also in Europe. We want to be here as so that when they face problems, Hoffmann is the one they will call when they want something solved in a broad range of topics to be addressed.”

Order books in Asia

The industry supply chain challenge is often described as the irreconcilable differences between a very erratic demand pattern and a very rigid supply side. In this environment, Hoffmann developed their value proposition, keeping close to customers to better understand their demand on one side and building inventory to absorb the ups and downs on the other.

“In a humoristic way, we have big order books in Asia and enough room for additional orders to take to a lot of customers. Asia a growing market for us but we look for more orders and we want to perform better together with our customers. So we are now here for two weeks in Asia to get in contact with our staff and to learn. So that we can adjust the business model and be more successful in Asia. There’s a big potential in this market and therefore we need to adjust our business model slightly in some parts,” Martin remarked.

Technology and Price

Most companies persuade customers with products that offer a combination of high performance and low cost. In some markets, lower cost at optimal performance levels is essential.  However at Hoffmann, technology always come first.

Schüler declared, “We have a wide range of products, and every year we look at each catalogue and come up with interesting products that we see our customers need. The company is launching a new catalogue as we speak today. It will have 7,000 items in it. Of course, we always talk about pricing. Hoffmann offers technology and assortment with a good pricing proposition. Every market needs its own alteration, so when you look at the catalogue you will find that we try to adopt the pricing side to each market.”

Martin also echoed technology as its main focus.  “We are working on digital solutions and new technologies, such as additive manufacturing and 3D printing. This also results into certain pricing. But normally our customers don’t have enough budget to buy cheap and low quality parts.”

Borries added, “At the end of the day the most important thing for customers is price value. So we deliver a strong technology to our customers with good pricing to help them stay ahead of their competition.”

Flexible

As the world changes every second, blowing new opportunities in all directions, Hoffmann executive board members, Martin and Borries concluded the interview with these inspiring messages for those who are considering market entry into South East Asia:

“It’s not one South East Asia, there are many parts of SEA, and therefore you must be flexible. Be interested in your impressions by adjusting your business model to the special requirements of the many different countries in the region. Also, be optimistic because there’s a high potential in this interesting culture,” Martin said.

“Be fast but not necessarily jump into the market. You have to be there, you have to learn and be flexible. When we look at SEA even in our subsidiaries, I think not one is the same as the other. I think this is something you have to acknowledge. Don’t try to go with one scheme and say that this will go everywhere. I think the successful companies are the ones that are flexible and adaptable. But at the same time maintain your core group and be visible as one company,” Borries, remarked.