Building on Strengths
“Playing to our strengths”
Dr Wolfgang Büchele, CEO of Linde AG, explains how he sees the company living up to its leadership promise and remaining on a sustainable and profitable growth path – even in a complex and volatile market. Building strong customer relationships, focussing on core activities and systematically developing new business opportunities are the keys to success.
Dr Wolfgang Büchele
CEO of Linde AG
Choose a question
Well, right from day one I can say I’ve been very inspired by our people. Their commitment, their expertise and their passion for Linde are truly exceptional – I had never experienced anything quite like it before. It also goes hand in hand with a strong sense of pride – which, I might add, is entirely justified. Over the last ten years, our company has emerged from a difficult situation to become a true global player in the gases and engineering business. We have carved out an exceptionally strong market position in numerous different countries. Looking to the future, our aim is to play to our strengths – so we can expand our reach and drive the market forward.
Most importantly, we need to put ourselves much more firmly in our customers’ shoes and ask ourselves each and every day what our customers actually need – and how we, as a company, can meet those concrete needs. What can we offer our customers? What products or services add value to our customers, setting us apart from the competition? That is to be the guiding force for all our future actions. Here we can draw on our strengths as a powerhouse of innovation, translating our hallmark entrepreneurial spirit more effectively into customer-centred solutions and applications.
In this age of mobile Internet, apps and social media, technical progress is not going to stop at the B2B door. First and foremost, these new communication channels offer our customers unprecedented access to information and significantly greater transparency across product offerings – 24 hours a day, 7 days a week. Customers are more empowered and their expectations are rising. We need to ensure we respond to changing customer needs in the right way.
It certainly would. Continued and close dialogue with our customers, understanding their concrete needs and actively engaging with them also means that we – as a company – need to continually evaluate our own structures and processes and realign where necessary. There is a big difference between telling our customers what they should buy from us and selling them the solutions they really need. Our overarching aim must always be to provide the fastest, best answers – answers that add real value to our customers. Or, even better: giving our customers what they need before they even ask.
Global industrial output had slowed significantly since we originally defined those targets, and the climate as a whole remains very unstable – marked by geopolitical crises, major exchange rate fluctuations and plummeting oil prices. Having discussed this situation extensively, the Executive Board concluded that we must continue to prepare ourselves for volatility, uncertainty, complexity and confusion. Many other companies in the chemical industry have revised their forecasts in the meantime too.
Well, the first thing is to bundle our strengths and focus even more intensively on the areas of business that add the greatest value.
Strengthening our core business is the major aim – especially cylinder gases.
Quite simply, we generate over 50 percent of our revenue with cylinder gases – which makes this business a powerful profit lever for the company as a whole. And we expect to see stable growth here over the coming years, driven in particular by increasing industrialisation in the emerging economies. That is also one of the reasons why we have decided to strengthen our focus on this line of business moving forward.
Well, in the gases business, market position plays a crucial role. And looking to the future, the key trends of our time also play to the strengths of our business model.
Well, take our on-site business for major customers, for instance. Here we are seeing a growing tendency to outsource plant operation, which suits us very well. Another example is liquefied gases, where we are benefitting from the increasing transformation of industrial processes with more sophisticated technologies, especially in the major growth regions. We are developing innovative, customised applications to tap into these promising areas more effectively.
Here you only need to look at changing demographics – the global population continues to grow, and life expectancy is steadily rising. This goes hand in hand with an increase in the number of patients with chronic conditions, who then need medical attention and care. Our medical gases and services for respiratory therapy not only meet this growing demand, but also – even more importantly – support these patients by significantly improving their quality of life.
A very significant one. There are wide-ranging synergies between our Gases and Engineering Divisions, which we will be harnessing even more effectively from now on. This applies not just to the on-site business, but also to integrated gas projects in general. We can use our engineering expertise to generate additional gas revenue here.
We are certainly well equipped. A sharper strategic focus and adaptive organisational model will keep us firmly on our sustainable and profitable growth path, allowing us to actively seize the rich and varied business opportunities that arise. We launched our current, customer-centric programme last autumn and are confident that the relevant measures will be in place by the end of this financial year. My colleagues on the Executive Board and I are convinced that this will provide us with an excellent platform to make Linde the industry’s strongest performer – the undisputed number one in our field. Linde will be synonymous with customer focus, outstanding reliability and in-depth technology expertise. That is how we will deliver maximum value to our stakeholders.