Like many organizations, SWISS KRONO had no idea about what was going to happen after the COVID-19 pandemic emerged.
“We reacted quite drastically by reducing output immediately,” explains Martin Brettenthaler, CEO of SWISS KRONO, a leading manufacturer of engineered wood products.
In mid 2020, when markets started picking up after the first easing of lockdowns, SWISS KRONO actually began to benefit from a massive rise of interest in home improvement-related products.
“We saw a very strong demand for flooring at the time because people discovered that their home was maybe not as nice as they thought when they were at the office every day,” Brettenthaler explains.
On top of this, the oriented strand board market for structural panels used in timber frame construction was also rapidly growing, adding even more sales to the firm.
“We actually had the best business year ever by far in 2021,” he says.
Global challenges
The impact of the pandemic on the bottom line had turned from a negative to a positive for SWISS KRONO, but this wasn’t the only challenge that Brettenthaler has been forced to contend with over the past few years. The Russia–Ukraine war and energy crisis have added plenty of problems for businesses across the world, including SWISS KRONO.
When the Russian invasion began, SWISS KRONO was running three plants in Ukraine and a major operation in Russia. A few years ago the company had decided to make the biggest investment in its history to extend the Russian plant at a price tag of US$273 million.
“Obviously we decided to stop the project, and that was a big headache because we had to deal with what to do now,” Brettenhaler explains. “There was a financial impact, there was a huge impact on dealing with all those suppliers; all those suppliers had different contracts.”
Like all building materials producers, SWISS KRONO is a very energy intensive enterprise, due to the moving of high volumes of materials and the transforming of products, requiring a great deal of energy.
“A big part of the challenge last year was to secure supplies, to keep the price increases to consumers as low as possible and to manage this between the different sites in environments that are also very different,” he says.
Supplier differentiation
On a practical basis, SWISS KRONO has identified a range of suppliers that are viewed as strategic partners, meaning Brettenthaler and his team have a lot of contact on all levels.
One of the partners SWISS KRONO works closely with is Dieffenbacher Maschinen und Anlagenbau, a family business that is a leading manufacturer of press systems and complete production plants for the wood-based panels, as well as forming and recycling services. Like SWISS KRONO, it also highly values the power of collaboration.
Brettenthaler and his team go beyond most typical supplier relationships and team up with key partners on research projects. Instead of waiting until everything is developed and then taking on the resources, SWISS KRONO tries to be there from day one and gain a first-mover advantage.
We are prepared to analyze and look into any kind of proposals from suppliers.
“We are prepared to analyze and look into any kind of proposals from suppliers. Of course, this creates some cost and sometimes those initiatives don’t yield much,” he adds. “But in those initiatives that yield something, we are in a top position, and this then helps to be attractive to other suppliers in that field.”
Brettenthaler brings up the example of collaborating with major chemical producer BASF and how partnerships like this help encourage other companies, especially startups, to get in contact to discuss projects around developing new resins.
Future Plans
A core aim for Brettenthaler is creating a sustainable future, not just for SWISS KRONO, but also for wider society. As part of this agenda, Brettenthaler and his team plan to be a global leader in circular buildings for living spaces.
“The building sector within the European Union accounts for a little more than 36 percent of all the greenhouse gas emissions in the region. If you want to decarbonize Europe, you need to tackle the building sector,” he notes.
“They contact us and we then try to position ourselves as the partner of choice for new developments, which then puts us in a good position to do that,” he concludes.
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