Turning up the heat: A TEC and GRECO joining together for new beginnings

Following the announcement that the two industry leading pyroprocess specialists A TEC and GRECO were joining forces, CemWeek took the opportunity to speak to the two respective company leaders, Thomas Liebert and Adriano Greco. The conversation touched on the drivers behind the move, evolving customer need and cement industry changes.

CemWeek: First, congratulations on your new collaboration - it looks like quite an exciting development. Could you tell us more about the history and market forces that brought this about? Is it a merger or a strategic partnership?

Thomas Liebert / Adriano Greco: With the increased requirement for alternative fuels and stiffer emissions regulations in the world today, A TEC and GRECO saw it fit to forge a partnership. We feel that this partnership will enhance both companiesÔÇÖ products and services by combining the technical abilities and the R&D resources that have always been a key point to both A TEC and GRECO.

This will be a two-phase operation. The first step is a merger of operations of A TEC and GRECO products in some key markets like Brazil, where have seen tremendous growth, due to the construction boom going on there.

The second stage is a strategic partnership in all other regions where A TEC and GRECO maintain operations, like for instance, Europe. The most important point of this cooperation is that A TEC and GRECO can offer to the customers, a global network that offers synergy between the two firms.

This network consists of 10 offices around the world with local engineering, local assistance and manufacturing components.

We feel this approach puts us in a unique position in the cement industry; there is no other pyroprocess or combustion specialist supplier that can offer this kind of structure, not to mention the high technology and cost-effective solutions we bring to the table.

 

 

 

CW: How have your customers' needs evolved over the years to prompt this change?

TL/AG: What we have over the past two decades noticed a gradual shift towards globalization. At the moment, there are around 15 big groups that hold the major amount of cement plants in the world. China is starting to become a bigger player in the industry, and opening its doors to the other big players as well.

On the demand side, one of the main driving forces is a move towards limiting emissions. We feel that with this partnership, we are in a position to address the needs of the changing market.

 

Tell us about the synergies that the collaboration will bring and how you have allocated business / product and geographic responsibilities.

TL/AG: Basically the synergies are in two different areas: Technical and Commercial. Technically speaking, the synergies are many, but for instance we can talk about the development of better calciner technologies by improving its alternative fuels combustion and staged combustion.

Another point of course is the emissions control that is much related to calciner and kiln geometry, and also the burning system. There is also the oxygen enriched combustion, where we can bank on our unique experience from the 90's.

On the commercial side, our worldwide network provides us with an advantage. From our perspective, our combined resources can do it better.

The regions are divided basically in 3 big blocks: Americas, Europe & Africa and Asia.

The Spanish office will service the Iberian Peninsula and North of Africa. The three Austrian and the Polish offices cover a big area composed of Central & Eastern Europe, Sub-Saharan Africa and Arabic Countries, and also hosts the manufacturing facility of the Group.

In America, the Brazilian office services South America, and the Mexican office is focused on North America. In Asia, we have three offices in strategic regions: a Malaysian based office for Southeast Asia, and two Chinese offices to give support not only to the Chinese companies, but also to our Western customers than maintain business with Chinese companies.

 

Tell us about the burner equipment business, competitive landscape and outlook. What are the competitive advantages of independents versus the integrated manufacturers?

 

TL/AG: The burner business consists of a small, but elite group of companies. It is such, because it is a small investment for a cement plant, but on the other hand is the heart of the process.

That's why most of the cement groups have their own burning specialists, because they have specialized needs. Only highly qualified companies both in technology, manufacturing and after sales support can be in the vendor list of any cement group ÔÇô big or small.

Of course, you can operate the plant for a few hours if the mill stops, for instance. But what if the burner stops?  If there is no clinker, there is no cement.

The second factor is the fuel cost. Right now, the world is moving toward alternative fuels. This has ushered big developments in the burnersÔÇÖ business since the 90's, and this has been a trend.

One of things about integrated manufacturers is that the customers suffer a strong pressure from them to use their burners, since it is part of the performance guarantee, but in reality, most of the burners that are substituted when the guarantee is over come from an independent supplier.

With our combined resources, A TEC and GRECO, we feel we can offer the best of both worlds. Thus, if the customer wants an A TEC calciner or EPCM service, there is nothing that will obligate this customer to buy a burner from GRECO, and of course if a the customer wants a burner from GRECO, no one will say that a A TEC equipment is needed to complement it.

That's why we say: ÔÇ£One company. One Team. One organization. Two choices for youÔÇØ

 

How has the pyroprocess optimization business evolved and how do independents fit within the global cement plant equipment manufacturers?

 

TL/AG: A TEC is specialized in plant optimization, and is always developing tailor made solutions designed to individual customer requirements, independent from specific equipment suppliers. Plant optimization is a core business. Plant and equipment suppliers have their standard solutions based on their products.

With joint R&D in the field of pyroprocess, A TEC and GRECO may improve the solution basis for their clients, especially as regards to different fuels, especially alternative fuels.

 

Is your announcement the first step in a bigger strategy for the joint company - will we see acquisitions and other mergers? Is it the beginning of a broader consolidation within the cement plant equipment industry?

TL/AG: One of the goals of this move is to maintain specialized cells, meaning that each product and service from A TEC and GRECO will be treated like a separate company. If we donÔÇÖt do this, we will have the same problems as the ones I have cited earlier about the integrated suppliers.

We want to remain specialized, but it does not mean we need to be small. We can be big, good and also specialized. Once again, we have come up with a unique company. Do you know any other in this business that is big, good and specialized? I donÔÇÖt.

New acquisition and mergers? I cannot tell more about that right now, but all we can say is that we are working on a big project that will be stamped in the cement industry history books. Unfortunately, we cannot tell you what it is. It is a secret so far

 

 

From both the GRECO and A TEC side, what are the biggest lessons within your respective domains from the global crisis? Where do you see the biggest opportunities going forward?

TL/AG: The developing countries are a good target now, and the demand is steadily shifting from old economies like Europe. Europe is still the ÔÇ£MeccaÔÇØ of cement, because cement technology was mainly developed in Europe and most of the big group's headquarters are located in Europe. But we have some Brazilian and Chinese groups that are growing so fast, they can probably enter the top 10 cement producers in the near future.

In fact the opportunities are everywhere. We are just keeping our eyes open for opportunities, and we will continue to invest in R&D and market development. The global crisis is something that might happen from time to time, and all companies should be prepared for that.

How to be prepared? Good products and good services distributed by a good network.

 

Sounds like big and exciting plans - we look forward to hearing more and wish you the best.