Components shortages, energy costs, sustainability: let’s talk about this with B. Lohmüller (Niehoff)

Niehoff has a long history in the wire and cable business. Founded in 1951 by Walter Niehoff, the Germany-based firm has become known for innovations such as the robust and reliable M85 rod breakdown machine, the Multiwire wire drawing system, the NPS (Niehoff Packaging System), and inline annealing technology. Nowadays, it's an international company with eight subsidiaries, 1000 employees, and a group turnover of €300 million. We had a long chat with Managing Director Bernd Lohmüller to take stock of the current market situation, components shortage, sustainability initiatives, and new projects in the pipeline for the notorious machine builder.

The last two years have been a turning point for many industries. Have past experiences forced you to rethink your internal organization?
Just as it has affected the whole world, the pandemic has also influenced and changed NIEHOFF’s internal organization. Our employees work as far as possible in the home office alternating with fixed presence times to keep our worldwide sales with consultation and service 100% stable and the reaction times very short as usual. To guarantee our customers reliable commissioning of their machines and fast service, we offer online service and can even carry out digital commissioning. We use alternative possibilities, such as video conferencing etc., to keep the travel activities of our employees to a minimum; another format is VR company tours in which our customers are guided by NIEHOFF employees and can ask questions interactively.
Like other European nations, Germany has been affected by recent increases in energy costs. How have they impacted your operations?
Conscious use of resources, including energy, has always been crucial at NIEHOFF. The logical consequence for us is that we produce all our machines sustainably. Our new factory was built in 2008, and even then we installed a geothermal heating system, for example. In our plant, we utilize the waste heat from our servers, compressors, etc. in the heating pumps, simultaneously, electrical power is produced by our own PV system or purchased exclusively from renewable energy sources. We are certified according to ISO 14001, ECOVADIS, BLUE COMPETENCE, and many more. Nevertheless, the ongoing energy price increases are impacting the costs of our sub-suppliers (cast iron, weldments, etc.) and our own costs dramatically.



We have heard of several machine manufacturers having delivery problems due to the shortage of electrical components, PLCs, and drives for machine building. Does this issue affect your company, too?
The shortage of steel, electronic components, plastics, wood, and packaging materials, triggered mainly by the Corona crisis, meant that parts of production had to be shut down very early in the automotive industry. Assembly lines were stopped, and employees were put on short-time work. But not only the automotive industry is and was affected by this, in general industry and economy worldwide suffer from this dramatic situation. Despite far-sighted management, it was only a matter of time before the global supply crisis also affected NIEHOFF and undermined our planning. In addition, the war between Russia and Ukraine and the partial lockdown in China have now made the situation incalculable.
For some time now we have not been supplied sufficiently, too late or not at all by certain suppliers. Thanks to our forward-thinking stock-keeping, we have been able to absorb some of this, but not all of it. Many bottleneck parts are electronic components. There are only limited possibilities to react, because all potential suppliers are affected, which also leads to sometimes dramatic delivery delays at NIEHOFF. Through targeted restructuring and expansion measures as well as adaptation designs, we have been able to create a very high degree of flexibility in our products as far as the installation of electronic controls is concerned. However, this does not completely eliminate the bottleneck, but at best "manages" it. Our purchasing department is in constant dialogue with our suppliers in order to be considered immediately when components become available again. Due to the high demand for the few items available, dramatic price increases cannot be avoided. So far, we have borne these price increases for the purchased parts that are important to us completely ourselves. This means that we have not added these additional costs to the products and have thus not passed them on to our customers.
However, the bottleneck situation described above has now reached us in many areas. Some of our machines can no longer be delivered on time due to a lack of supplier parts. Since this situation is a global, unforeseeable problem for which there is currently no short-term solution, we are, in fact, talking about "force majeure".



The word sustainability is on everyone's lips. What actions are you taking in this regard? How many customers (percentage-wise) are asking you for green solutions?
As already mentioned above, Niehoff has always attached great importance to the responsible use of all resources, including energy. That is why we produce all our machines sustainably. But it's not just the manufacture of our machines that is sustainable; our machines themselves produce wire in the most sustainable way, saving energy and increasing output.
We recently received the NEXANS Supplier Award (ed.'s note: in the picture above) for our sustainable RBD line MSM 86 with R 502, which replaces an older machine. The newly delivered MSM86 with R 502 saves 25% energy and has a 60% higher output.
In view of dramatically increased energy costs, almost all customers are asking for energy-saving machines that are produced sustainably and have a low CO2 footprint. With modern NIEHOFF machines, the energy-saving potential is enormous compared to existing solutions.
Another buzzword is deglobalization, namely the opposite tendency of globalization to trade within one's geographical area of belonging. How does this macroeconomic trend relate to your business? Are you experiencing it as well?
We are all affected by deglobalization, both in our private and business lives. New customs tariffs, trade wars, etc., tremendously increased freight rates, shortages of materials and items, and so on lead to local production that saves CO2 but is usually more expensive - and no longer exists! Local production needs to be rebuilt in the coming years, e.g., as regards the production of microchips. NIEHOFF, like all other machine manufacturers, is affected by this trend.
Are you planning to expand your offer further? If so, in what specific branches?
NIEHOFF has recently expanded its product portfolio to include the hose and tube industry, medical applications, and also the battery industry. However, NIEHOFF's focus will remain on the wire and cable industry. For this branch, we have introduced large double-twist bunchers for power cables in the last few years, which will be one of the main drivers in our industry in the next couple of years.
How do you keep your machines always up to date, and what will be the next technological frontier in your industry?
As I already mentioned, NIEHOFF has always been a technology leader. We have to constantly come up with new innovations and benefits for our customers and follow and set the trends, such as digitalization. Currently, our development focus is on process control, predictive maintenance, and material savings (copper is expensive). Likewise, we focus on saving energy and increasing production speed and performance, as well as increasing OEE. NIEHOFF works very closely with various universities in research and development. The WALTER UND ELFRIEDE NIEHOFF Foundation is currently funding a project on digital twins at a Bavarian university with €500,000.
In the area of energy savings and production speeds, NIEHOFF will present a groundbreaking development within the next month.
You have just participated in the wire Southeast Asia exhibition. What were your impressions of the show and the industry's status in that geographical area?
We were pleased to see that the fair was well attended, although there were fewer visitors from abroad, such as India. Overall, it is safe to say that the Southeast Asian market is developing well, and customer demand is high. Therefore, wire Southeast Asia continues to be an important trade fair for the region.
Let's take a look at the future. What do you have in the pipeline for next year?
Indeed, our pipeline is well-filled, but I'd like to ask for your patience. At wire 2024, we will present our innovations to the industry.   We are looking forward to it! The next edition of the Düsseldorf wire is scheduled from April 15 to 19, 2024.
To learn more about NIEHOFF's solutions for the wire and cable industry, you can reach out to the NIEHOFF team using the contact information on the side.