'PetrolPlaza’s Ear to the Market' report - Pumps and Systems Made in Germany: Interview with Martin Kammler, Scheidt & Bachmann

With four divisions manufacturing systems for parking and leisure centres, fare collection, signalling and petrol stations, Scheidt & Bachmann, the shares of which are held by the founder’s families in the fifth generation, is one of the typically solid and traditional private concerns which make Germany a successful industrial country.

I was talking to Ralf Köppl, Sales Manager for petrol station systems in his office in the second floor of a large administration building which has been steadily expanded over the past few decades. Even knowing that Scheidt & Bachmann wasn't exactly a small company I thought he was joking when he pointed out a far-off crane to me and said, “We're still expanding on this site.” The crane was so far away I thought it belonged to a company on the next-but-one industrial estate! But what I was seeing was actually a building site which will provide a further expansion of Scheidt & Bachmann’s manufacturing facilities.

The entire area of the Mönchengladbach site covers 70,000 sqm (over 750,000 sq.feet). About 12,000 sqm (130,000 sq.feet) of this are devoted to office space, the remaining space is earmarked for manufacturing and storage.

I asked myself if they really need such a large works to put together a few machines and petrol pumps. Is it not the modern thing nowadays to have your (already assembled) electronic modules arrive in a container from the Far East, to buy your mechanical components from suppliers and to have your metal sheets bent and painted in an eastern European country which has low labour rates? Well, Scheidt & Bachmann don't do it like that, as I soon found out from Christina Brunen, Marketing Executive for Petrol Station Systems, who accompanied me on a tour of the premises. In this enormous, yet perfectly organised works, they turn out products with a level of vertical integration that is seldom found nowadays - hence the sheer size of the site.

For this, the very first issue of 'PetrolPlaza’s Ear to the Market', I wanted to find out more about the company firsthand, and Martin Kammler, Scheidt & Bachmann's Managing Director for petrol station systems was kind enough to answer my questions.

Mr. Kammler, could you tell us where Scheidt & Bachmann's manufacturing sites are located, and how many employees each of these sites has?

At first, I would like to point out, that Scheidt & Bachmann is first and foremost a solution and service provider, operating in various global markets. As part of our solutions we offer a range of products for such diverse applications as paying your train ticket or dispensing fuel. These products are manufactured in 3 main plants located in Mönchengladbach, Germany - our global headquarters -   in Zilina, Slovakia and in Burlington, USA. Out of our 2.000 employees worldwide, around 30% work in manufacturing.

Scheidt & Bachmann is active in four market segments. Our readers are of course mainly interested in the petrol station system segment. In this segment alone, how many employees do you have and what are your annual sales?

Around 250 employees work in the division for petrol station systems. Out of these, 40% are service engineers, 20% are software and hardware engineers, 20% work in sales and project management and 20% in manufacturing. Our annual sales are in the medium double-digit millions of EUROS.

Can you briefly describe for our readers your product and service portfolio in the petrol station system segment?

We offer a full range of solutions enabling our customers to succesfully operate and manage their retail petroleum sites – from the single site operator to the big oil corporations. Core product is our scalable site management system (Point-of-Sale and Backoffice) with the associated indoor and outdoor payment equipment, wetstock and drystock management functions including promotion displays, as well as central applications for managing networks of sites. An international after sales service organisation provides ongoing maintenance and support for our solutions. In addition we offer a range of high quality fuel dispensers, which are serviced by our partners.

Do synergies exist between the four market segments, and if so, can you describe them?

We share our manufacturing, procurement and logistics facilities, which gives us great flexibility in coping with fluctuations in demand. In key areas, core Hard- and Software development is shared e.g. for cashless or cash-based outdoor payment systems.

Allow me to ask you a somewhat provocative question. I'm extremely impressed by the size of this Monchengladbach site and the high level of organisation you have here. The question is, is such a degree of vertical integration economically viable, especially in a high-wage country like Germany? Or have Scheidt & Bachmann perhaps missed the globalisation train?

A provocative answer would be: if it weren’t economically viable, then why do you think we are doing it? If our business model were mass production, you could be right – of course you would still need to answer for the ethics of exporting our environmental and labour problems to low-wage regions, but as our competency is building tailor-made solutions, we can reap huge advantages for our customers exactly by our high level of vertical integration. Being a quality supplier, we need to be in full control.

You emphasise the high quality of your products and place them in the high-end price segment. Although I’m one of the very few petrol station customers who are interested in petrol pumps, I have never chosen a petrol station simply because its pumps are better. So why should a petrol station operator opt for a more expensive, albeit better, petrol pump?

I agree that the end user is probably more interested in a pleasing overall presentation of the site and as a minor factor somewhere in that equation a clean, working, fuel dispenser might be of interest. The operator however benefits massively from lower downtimes and a lower TCO and a large number of operators around the world understand this principle.

Mr. Kammler, can you briefly describe Scheidt & Bachmann's ideal customer?

Our ideal customer values quality and a long-term relationship with a supplier that listens to his needs.

At this time, what are your top markets and who are your top customers?

Our home market of course is Europe, with a focus on D-A-CH (Germany-Austria-Switzerland), the Benelux and UK/Ireland. We are experiencing considerable growth in Russia and have installed first systems in Asia. Our top customers are global and regional MOCs as well as – increasingly – dealers.