A global leader in metal recycling and
Please introduce yourself.
Markus: I'm Markus König, CEO of Kovosrot Group CZ s.r.o., Czech division of Scholz-Group.
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?
Markus: The Czech operations have also been affected by the liquidity problems of the Scholz-group in the past, albeit the financing requirements have been sufficed independently in the local Czech banking market. Facing the year-long ongoing rumors in the market about the financial problems of the Scholz-group a great effort had to be spent by the whole Czech staff on convincing suppliers to continue business. Successful factors in these difficult times thus have been loyal, dedicated and trustworthy employees.
Strategies have been discussed and decided upon also in the past. From a Czech perspective it is important that the new strategy, and now especially the business strategy, is not only discussed and decided upon, however, also realized and pushed further to show the Czech employees the commitment of the new shareholder. A first step has been made here in 2016 by catching up for the investment backlog of the Czech operations; it will be important to continue on this path.
We noted that Scholz's business performance has gradually improved since the start of 2017. What do you think was the main driving force?
Markus: The recovery of the markets for secondary metal scrap commencing in HY1 2106 after a drought stretching from 2012 is a key factor. This was furnished by successful restructuring that has laid fundaments for sound and profitable growth.
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?
Markus: Czech employees have always been loyal to the Scholz-group and have been willing to support the company also in difficult times evidenced in the cooperation and implementation of restructuring measures which have been necessary in the Czech operations, too. By now any negative sentiment from the past is gone, employees are looking positive into the future and want to be part of a success story in a key future industry, recycling.
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?
Markus: Chiho is the world market leader in the recycling of electrical engines, and the core business of Scholz-group is the recycling of secondary metal scrap. Synergies can and will be achieved once the learning and educating from one side to the other is followed upon and supported; the China market offers extensive business opportunities that can be pursued with the knowledge and expertise of Scholz, whereas on the other hand drawing the right conclusions from the expected consumption of secondary metal scrap in China can detect business opportunities worldwide. A worldwide staff exchange program might be beneficial here.
So far Chiho has brought financial stability to Scholz; however, that was probably the easiest task. The difficult tasks, i.e. to develop the business in common under the new roof of Chiho and to make this partnership fruitful for all stakeholders are just laying before us.
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?
Markus: For sure there are cultural differences. However, from what I have experienced so far those are not that big that they cannot be overcome to work for the common goal to develop the business successfully and profitably. To achieve this goal it will be essential to listen to and respect different thoughts and ideas, to discuss controversially but always respectfully and constructively.
In what ways do you think we can capitalize on the Group's enhanced strength now?
Markus: It has to be strived for technology leadership! The combination of Chiho`s financial strength and Scholz`s recycling expertise is the basis for that. New trends in the metal recycling industry have to be detected through cooperation with research institutions and universities and a continuous dialogue with end consumers of metals to be close to their future (technological) needs. Investments into R+D will be crucial.
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?
Markus: The vision is shared and will be pursued further by Czech staff in aiming to become the leader in recycling business in its relevant Czech market
Possible cross-border synergies, e.g. servicing multinational suppliers, have to be followed thoroughly to enhance awareness amongst staff that they are a part of a key global recycling group.
Are you confident in the Group's future? Are you confident in the recycling business?
Markus: FOR SURE! The group is well prepared for the future and recycling business is one of the key future industries as our commodity “secondary metal scrap” will not only not cease to exist, however, will grow further.