An interview with Mario Bertling, Managing Director of ESV
The German wire industry is on its toes—digitalisation has already arrived in many parts of the industry. “Companies are working to ensure that customers will be able to track in detail via digital media in future, from the receipt of wire rod to its assembly and storage, what stage their order is currently at and when it will be completed,” explains Mario Bertling, Managing Director of the Eisendraht- und Stahldraht-Vereinigung e.V. (ESV) in an interview with wire & Tube NEWS. On the other hand, the industry has to face the major challenges resulting from the war in Ukraine.
wire & Tube NEWS: How are the wire manufacturers doing now?
Mario Bertling: After two years of pandemic-related uncertainties, challenges due to lockdowns and the implementation of 3G regulations and beyond to protect employees within the plants, companies were expecting a good first half of 2022 due to high demand and high order backlogs. The supply of semiconductors for the automotive industry also seemed to be easing.
Then, on 24 February 2022, Russia invaded Ukraine, and since then, the industry has faced more and more challenges. Even before the war, the costs of input materials, fossil fuels, transport and auxiliary and operating materials had risen massively. This trend continues unabated.
Added to this is the existing or impending shortage in many areas.
First, there was a shortage of cable harnesses from Ukraine for the automotive industry, so production had to be curtailed in many factories, and demand dropped drastically. The consumer goods industry also received a noticeable damper due to consumer uncertainty after the outbreak of the conflict.
Meanwhile, the close linkage and dependence of global supply chains were felt. For example, after the embargoes against Russia and Belarus, it became apparent that many products, such as nails for wooden pallets, had migrated in the past decades and were now threatening their availability.
The industry is even more concerned about its dependence on Russian gas and the gas emergency plan published by the German government. In the event of a gas shortage, industrial customers would be affected directly after households are disconnected. However, due to the predominantly continuous processes, a supply shortage would result in an immediate shutdown of a large part of the wire industry with massive damage to furnaces and machinery.
Added to this are the transport problems. And it is not only the diesel surcharges that are extremely burdensome for haulage companies on the road. Every third driver contracted internationally for Polish or Lithuanian haulage companies came from Ukraine. According to the Federal Association of Road Haulage, Logistics and Disposal, there is a shortage of 60,000 to 80,000 truck drivers in Germany alone. The prospects for transport by sea also look less than encouraging.
In many areas, the effects of the pandemic, war and supply crisis cannot be fully predicted. Supply chains and routes will probably have to be completely reorganised
in some areas. On the one hand, this offers opportunities, but on the other hand, it also poses considerable risks for wire companies.
In this special situation, the German and European wire industries must once again bear the brunt of developments and political measures and, recognising the existing dependencies and the associated risks of global supply chains, should also be given the support to actively participate in the creation of a broad basis for safeguarding German and European independence in steel and metal processing.
wire & Tube NEWS: How is increasing digitalisation affecting wire manufacturers?
Mario Bertling: Digitalisation has arrived and become established in many parts of the German wire industry. Whether it’s different ERP systems or the cross-site introduction of SAP, companies are working on ensuring that in the future, customers will be able to track in detail, from wire rod receipt to assembly and storage, via digital media, what stage their order is currently at and when it will be completed.
wire & Tube NEWS: Numerous governments are relying on regulations on the one hand and incentives on the other to implement electromobility. What consequences does this have for wire manufacturers?
Mario Bertling: The climate protection goals of German and European politics are also supported and endorsed by German wire manufacturers. However, the mobility transition should be designed in a technology-open and target-oriented way instead of being carried from one transitional technology to the next. Setting targets without first creating the necessary infrastructures cannot be a solution on the path to climate-neutral mobility in the short term.
wire & Tube NEWS: What other current trends are you seeing in wire production?
Mario Bertling: “Green Steel for Europe”. In cooperation with the raw material suppliers, the wire industry is also working intensively on climate-neutral wire. The technical possibilities already exist in several areas, such as burners for heat treatment furnaces. Yet, once again, the necessary infrastructure lacks, e.g. an adequate hydrogen supply or a sufficient electrical energy supply.
Michael Vehreschild
