Interview with Krones CEO Christoph Klenk

KLENK Trade relations contribute very strongly to economic and political stability. Therefore, I don't think things will be any less global in the future. However, we need to become better at seeing the coexistence of different political systems as an important building block again – and we must once more invest more in diplomacy. This capability has unfortunately been lost in recent decades.

KLENK For us at Krones, as for most large companies, diversification in the regions is currently a key issue. In addition, our disposition and procurement strategy is very high on the agenda – something I wouldn't have expected a few years ago. Dual sourcing is an important concept here in terms of hedging risks in the value chains. In recent years, the focus has tended to be on optimizing working capital. Due to the changes in the supply chain, however, the current focus is more on the ability to deliver. But one thing is clear: We will remain deeply intertwined economically in the long term.

KLENK Economies of scale and the associated competitiveness will always be crucial for our company. In addition, Germany and Europe remain excellent trading locations when it comes to exports or barriers to entry to other countries or regions. In concrete terms, for example, if we want to serve our African customers from Europe or Asia/China, there are major differences, for example in terms of customs duties and the processing times for imports.

However, we can also see that our solutions with focus on IT and digitalization are tending to become more regionalized. In particular, this is being driven by the local demand for skilled workers – whose recruitment is now very costly in all countries – as well as by local customer requirements, language factors, and the possibility of quickly combining digital solutions with "physical services".
 

KLENK The greatest challenges also affect us independently of the discussion about globalization. We see four crucial issues here. Firstly, the shortage of skilled workers, both in terms of general qualifications and specifically in terms of IT and digitalization. Secondly, in recent years our industry has invested heavily in the further development of new business models, with a focus on new digital solutions. I'm convinced, however, that the greatest potential still lies ahead of us and that we have by no means exhausted every possibility.

Our sustainability goals present us with another core challenge – and I don't just mean in terms of meeting the regulatory requirements. Instead, I'm referring to Krones' contribution in the form of our voluntary commitment to leaving our planet in the best possible shape for future generations. The fourth issue is competitiveness and cost management. The past three years have clearly shown us that many things can't be planned, but unforeseen situations must nevertheless be handled adequately. A stronger focus on scenario thinking and rolling forecasts will therefore become permanently anchored in our company.
 

KLENK At Krones, this would have zero direct impact. Global megatrends predominantly impact us via our customers worldwide. I will gladly give you two examples: Our customers include numerous breweries. They require a lot of gas and water to produce beer. Energy efficiency plays a key role here, as do ensuring that our plants contribute towards a reduction in CO2 emissions and finding suitable solutions for the current challenges linked to this. In addition, many of our international customers have to reduce their use of plastics and recycle them – buzzword: "circular economy".

KLENK Yes, we are already seeing this at present, for example in terms of travel restrictions, sanctions, and protectionism, to name just a few examples. These are all obstacles that make our business more difficult – but we can cope with them. Therefore, in my view, this will not result in a "reversal" of globalization.