A global leader in metal recycling and

environmental protection

  • Please introduce yourself.

    Achim Fetzer:My name is Achim Fetzer, Head of Corporate Audit. In this position I lead and manage a team of qualified internal auditors supplemented by guest auditors and occasional co-sourcing arrangements with external audit firms.

    My team and I support the Board of Directors and the Audit Committee in fulfilling responsibilities, including oversight of financial reporting, operating and risk management controls, and the internal audit processes.

    I am responsible for providing strategic and technical leadership to the independent internal audit function, and for providing advice on the company's operations control environment and risk management practices to the management.

  • Since end of 2016, Chiho has come in as the sole shareholder and put forward the “New Scholz Strategy” with relevant restructuring measures. By far, what kind of positives have emerged in Scholz under the new strategy? And what are the major differences between the restructuring this time and those from years ago.

    Achim Fetzer:Since I joint Scholz in 2014 liquidity was a permanent bottleneck for the company because of the mentioned reasons. Enforcement of a long-lasting strategy was hardly not possible under these circumstances. CHIHO, as long-term strategic investor, restructured firstly the financials to get a solid capital structure and cash position. This was the starting point for boosting customers and employee's confidence in our enterprise.

    Focusing on our core competence, scrap metal recycling, and leveraging synergies between CHIHO and Scholz on an operational basis became meanwhile the day-to-day driving force.

  • We noted that Scholz's business performance has gradually improved since the start of 2017. What do you think was the main driving force?

    Achim Fetzer:I mentioned the bull market before. For sure this helped to improve our performance because it was possible to generate some windfall profits. In addition, also our customers started to rebuild their trust into our financial situation. So we were able to recover some business volume.

  • Do you think the insecurity sentiment of employees from the past has gone or not? Do you think our employees are happy or not with our current improvements that have been achieved?

    Achim Fetzer:The feeling of insecurity has changed for the employees. On the one hand the successful restructuring activities helped us to overcome the fragile financial situations. On the other hand the cyclical raw material market turned into bull market in 2017 which helped us a lot to bring back the company on the right track. This was very important for the employees to rebuild confidence in the company.

    Personally, I am very happy with this development and I assume my colleagues as well.

  • Chiho's intention is not to become a financial investor, but is fully committed to be an industrial investor and to further explore the global recycling industry. With the integration with Scholz, Chiho wants to achieve synergy effects. From your point of view, do you feel such intention of Chiho? What benefits do you think Chiho has already brought to Scholz? And what more Chiho can bring? From your point of view, do you think the above mindset of CEG is perceivable or not? What do you think for the past year CEG has brought to Scholz? What else you would envisage for future from CEG to Scholz?

    Achim Fetzer:CHIHO is clearly perceived as a long-term industrial investor who is committed to create synergy effects.

    Besides the needed and successfully realized financial restructuring, Scholz got a direct market access on the sales side, especially for non-ferrous products.

    The external perception and company's image has improved which is already measurable regarding volume and customer recovery.

    Furthermore, CHIHO intensively worked on the internal communication and was bringing together the different management teams of the whole group. So collaboration and cultural exchange was fostered. In mid-term this will be the basis to create a multinational career-platform for our employees.

    On the other hand, CHIHO will benefit from the know-how, technology and skilled people of Scholz for the exploration of the Chinese scrap metal recycling market which will be a huge growth potential for our group in the next years.

  • There are cultural differences between China and Germany. What do you think of these cultural and behavioral differences? Have you ever felt any cultural differences when interacting with your Chinese colleagues? Do you think those differences are manageable?

    Achim Fetzer:When we treat each other with respect and take into account that there are certain cultural differences I am convinced that those are manageable. We should see these differences not as an obstacle rather as an opportunity so that cultural diversity itself can be a source of advantage. By focusing on the similarities rather than the differences a company culture will prosper.

  • In what ways do you think we can capitalize on the Group's enhanced strength now?

    Achim Fetzer:Scholz has established oneself in the market for a very reliable, professional and high quality scrap metal recycling service partner with cutting edge technology. To further develop the recycling network in China, CHIHO can capitalize the Scholz experience and know how.

    In addition, we are now able to provide our services to our global key accounts by our own operations in China, Europe and North America. This is very unique in our industry but not for our clients. Especially our major suppliers like OEM´s, automotive suppliers and other well-known companies have big footprint in China already.

  • About our vision, “to be the leader in global recycling business”, do you think you and the team around you share our vision? What could be done in your perspective, from shareholder side and from your scope of responsibility, to push forward the vision?

    Achim Fetzer:“To be the leader in global recycling business” can have various dimensions. Here we must differentiate. Scholz was hit very hard with the endeavor becoming largest scrap recycler in terms of tonnage and volume inter alia because of a very unfavorable leverage for a cyclist market.

    In the next step we have to derive a concrete strategy to specify our vision. In my perspective the following aspects need to be considered:

    • Best-in-class employer for our people and young talents
    • Above average profitability and return on investment
    • Stable margin in the market cycle
    • Healthy capital structure and a strong capital management
    • Best-in-class operations and state-of-the-art technology
    • Optimized logistics to bring down freight charges
    • Systematic customer relationship management to grow market share and volume
    • Selective acquisitions and organic investments for healthy growth in market shares
  • Are you confident in the Group's future? Are you confident in the recycling business?

    Achim Fetzer:Definitive, yes! Our planet and society are facing resources scarcity as one of the current megatrends. Therefore, recycling is essential to counter this development. Especially scrap metal recycling reduces Co2 emission, energy consumption and the excavation of raw materials like iron ore, bauxite, copper, etc. This fact itself makes me confident for the future of the recycling business and the CHIHO Group.