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Reorganisation of TKIS puts customers at the centre

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World Cement,

The Industrial Solutions business area, the engineering and construction arm of the thyssenkrupp Group, is being reorganised as part of the transformation program “planets”. The aim is to secure growth, enhance performance, focus more strongly on customers, markets and high-margin service business, and drive culture change within the business area. A central element of this is the further development of the organisational structure towards a modern management structure focused on customers and business fields and integrating the Marine Systems and System Engineering units more closely. The new position of Chief Operating Officer will be created on the business area board for this. In addition, Johan P. Cnossen (56) from the Netherlands will join the leadership team of Industrial Solutions and manage the transformation office for the implementation of “planets”.

Jens Michael Wegmann, CEO of the Industrial Solutions business area since October 2015: “We are operating in a difficult environment and want to make our organisation faster, more flexible and more efficient. With our new network structure and the reorganisation of our business units we are putting customers at the centre of our actions. This provides the basis for ensuring customer satisfaction and achieving our long-term growth and profitability targets.”

Elimination of a management tier to increase efficiency

In the future the plant technology business will have one less management tier. The current Resource Technologies and Process Technologies business units are to be dissolved. The operating units previously one level down in the organisation will now in part be restructured and upgraded to business units. In the future these units will have global responsibility for the development of their business, project management and profit and loss. They will report directly to the management board of the Industrial Solutions business area. This will shorten decision-making paths, increase market focus and give the businesses greater entrepreneurial autonomy. The new structure will be implemented at the start of the new fiscal year on 1 October 2016. Industrial Solutions will then have eight business units: Industrial Specialties, Mining Technologies, Cement Technologies, Electrolysis & Polymers Technologies, Fertilizer Technologies, Services, Marine Systems and System Engineering.

Strengthening of service business and pooling of project management capacities

To strengthen service business, the service activities of Industrial Solutions will for the first time be combined in the new Services business unit. Going forward, the aim is to double the share of service business from the current level of around 10% to over 20%. Project execution and management functions will be combined in a Network of Excellence operated as a cost centre and managed centrally for the entire business area. This step will improve efficiency and competitiveness, help absorb underutilization, and improve closeness to customers in project execution by providing more services locally. Despite the strengthening of local presence in the regions, the German engineering sites – in particular Bad Soden am Taunus, Beckum, Dortmund, Ennigerloh, Essen and St. Ingbert-Rohrbach – will continue to play an important role in the global network as central competence centres.

Transformation program speeds up integration of plant engineering businesses

The transformation program “planets” will also speed up the integration begun in 2014 of thyssenkrupp Group’s previously separate engineering companies – Uhde, Polysius and Fördertechnik. Under the roof of thyssenkrupp Industrial Solutions a uniform network structure is now being created that will make it possible to share expertise and capacities across all business units and also integrate Marine Systems and System Engineering more closely. It will also move the businesses closer to customers and strengthen their focus on individual markets. Johan P. Cnossen, who as head of the transformation office is responsible for the implementation of “planets”, will report in this new function directly to CEO Jens Michael Wegmann. The engineering and business studies graduate Cnossen was previously CEO of KHD Humboldt Wedag International AG, prior to which he held management positions at international plant engineering companies such as Jacobs, AkerKvaerner and Ruhrgas Industries.

Performance stable despite challenging environment

The Industrial Solutions business area held up well in the 1st half of the 2015/16 fiscal year, reporting year-on-year improvements in order intake, sales and adjusted EBIT. However, there were sharp differences in order intake in the various businesses. The growth was mainly attributable to a major cement plant contract from Saudi Arabia, while demand for mining equipment and chemical plants was impacted by volatile raw material prices. The reorganisation will help secure jobs in this difficult engineering environment and create a basis for long-term profitable growth.

Adapted from press release by Joseph Green

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