Digitalising steel marketing – an entrepreneur challenging tradition

It was back in 1997 that we first met Ralf Niemeier in Oelde, Germany. We were reading a Sunday paper in Bremen and came across an article that reported a prestigious award that Ralf had received for inventing a highly innovative new material joining process, the first in many decades. We managed to track down his phone number, called him, and arranged to visit him at his window manufacturing business in Oelde. It was a stimulating meeting with an entrepreneur who was not only a highly experienced businessman but always thinking about ways to do things better.

The ‘Davex’ Technology

During our meeting with Ralf he told us about many things, including his new joining technology and the reasons why he invented it. Changes in window frame insulation standards in Germany meant that far more complex profiles were required and this gave rise to issues of strength. Ralf was on holiday in Mallorca and, whilst on the beach, a brilliant idea came into his head. With some help from Dr Wilhelm Lappe at the University of Paderborn a new compression joining process, that they branded ‘Davex’, resulted from that idea. It enabled the simple efficient manufacture of tiny ‘I’ and ‘T’ profiles, small enough to fit inside window frames – and a whole lot more!

The next phase

Ralf sold his window manufacturing business and focused on commercialising ‘Davex’. It was a tough sell to stakeholders in a sector who had a very traditional view of ‘how things should be done’. In association with Wilhelm Lappe and a number of other supporters, the ‘Davex’ technology was developed to the point where it could produce even quite large profiles. It could also join metals and non-metals if they had the same coefficients of expansion e.g. some types of stainless steel and reinforced fibreglass. The joints were as strong as those made using laser welding. This opened up quite unique opportunity areas. However, the investment required was large and so Ralf needed to work with a commercial entity that had the resources to fully exploit the technology

The TK phase

Thyssen Krupp bought the rights to use the technology for most of the EU countries and built a state of the art plant near Hagen in Nordrhein-Westfalen. The ‘Davex’ machine they built was huge and designed to do large production runs of mainly commodity type steel profiles – a market space where there was always going to be a lot of competition but one that was compatible with their traditional business model. Ralf spent a great deal of time pursuing potential licensing opportunities in other parts of the world but traditional players in the sector were reluctant to commit and move outside their ‘comfort zones’.

In the meantime

Ralf has always been a ‘digital’ person and used ICT technologies extensively to build a presence for ‘Davex’ and his other business activities. Several years after the Thyssen Krupp deal, Ralf met the owners of a progressive and successful specialist metal profile manufacturing company, Montanstahl GmbH, based in Lugano, Switzerland. They were also into technology and had developed a unique triple headed laser unit which enabled them to manufacture very sophisticated profiles that others could not. As a result, they had established a market niche that they basically owned. Some of the more sophisticated large profiles they designed and built cost clients as much as USD 100,000 for a single unit. Much of what they did was in the high value opportunity area. Ralf and the MontanStahl owners developed a formal working relationship that led to him taking over international marketing of their profiles using sophisticated ICT platforms and managing the whole sales and marketing process – sales, design, engineering certification, and CRM - from a base in his home town of Oelde, hundreds of kilometres away from the MontanStahl production unit. This is when his interest in digitalising steel marketing really began to grow.

The first digitalisation phase

MontanStahl operated in around 15 different countries – including in the Middle East and North America. Until Ralf joined forces with them, they had been relying on local agents to direct business to their Swiss manufacturing base. However, such an approach was costly and not particularly productive. So Ralf set up a network of country-dedicated websites and implemented a digital marketing strategy that included a close involvement with Google. Within a short time, the business streams being generated for MontanStahl grew at a rapid rate – far faster than that for a traditional business operating in the steel profile manufacturing and supply sector. So this led Ralf into thinking more ambitiously. In the meantime, TK decided to close down the ‘Davex’ production unit as the approach they followed was not economic and so Ralf was able to take back the rights and set up a plant designed to use it in specialist areas where there were unique market slots - in line with his original vision for the technology.

The second digitalisation phase.

Focusing forward, Ralf figured that if the online approach he had developed for Montanstahl had generated such a positive outcome for a single company and its international customer base, why not apply it to the entire sector internationally? So, what he and a team have built over the past few years is perhaps the most innovative and leading edge online portal for marketing steel products and services in the world. It is designed to connect thousands of steel profile manufacturers, suppliers and specialist service providers with customers anywhere internationally – either locally or globally – and deliver the most cost-efficient and client-specific outcomes through a ‘one stop shop’ online interface. It’s a bit like the accommodation booking sites, ‘Trivago’ and ‘Booking.com’ which connect customers with accommodation providers, except that it is designed specifically for the steel industry value chain. After investing many millions of Euros and building a team of 35 support staff, the German portal component recently went online - https://www.netzwerk-stahl.de/ - with over 4,000 manufactures/suppliers/service providers already in their system. In the next few weeks the portal will be available in 12 different languages and expand operations into many more markets. The English language domain name will be http://www.steel.online.

What does this mean?

We hear so much about ‘digitalisation’ and ‘sector disruption’ these days. Ralf’s entrepreneurial journey is an example of how it happens in real life. Something so ground-breaking normally does not happen overnight, especially where tradition is a strong resisting force. As Ralf knows, it is a long journey with many twists and turns along the way and requires developing an intimate understanding of what clients really want. What Ralf has achieved to date is a wonderful example of just that – listening to clients. They want to be able to access what they want in the form they want, at the best price available, and as quickly as possible. The traditional way of marketing steel products and services requires many calls and quotes, is limited in reach, and often needs a lot of time and patience. The platform Ralf has developed addresses all these issues and improves outcomes for clients. As Nicholas Webb said in 2011 in ‘The Innovation Playbook’, innovation is simply a matter of focusing on customers’ wants and needs and delivering better net value to them. This is something Ralf has understood for many years. What he is doing now has the potential to radically change the way the global steel industry does business.