- Sustainable business strategy & market orientation
- Product management
- Heating, Ventilation and Air Conditioning Division
- Sanitary Equipment Division
- Windows Division
- Doors Division
- Digitisation
Sustainability Report
Sustainable business strategy & market orientation
Between 2015 and 2019, Arbonia successfully completed an impressive restructuring and repositioning programme. During this period, the company and its four divisions relocated seven production plants, including to best-cost locations, invested over CHF 400 million in new production plants and more efficient processes, and increased its vertical integration.
Arbonia has set itself the goal of offering its employees a secure job and creating value for its shareholders.
Even after the sale of the Windows Division, which is expected to be completed in the second quarter of 2021 and in which all existing employment contracts will be retained, Arbonia will continue to pursue an adapted strategy that is even more focused on sustainability.
Strategic pillars after the sale of the Windows Division
The Sanitary Equipment Division with its shower doors and shower partitions will be integrated into the Doors Division. The strategic logic of the integration lies in the better use of synergies in joint market development in contract sales on the one hand and in procurement on the other. In addition, the product range of the Doors Division with functional and interior doors made of wood will be expanded to include shower doors, which allows the glass doors and glass partitions area to be expanded for interiors. The Doors Division is strengthening its position as a single-source solution provider for accessibility, including the keyless KIWI access system built into the doors.
Based on this expected and sustainable organic growth, the robust profitability of the divisions, and the liquidity of the group, additional inorganic growth is also being sought by means of targeted acquisitions in existing and/or neighbouring markets, including Eastern Europe. This brings Arbonia closer and closer to its goal of becoming the leading door supplier in Central Europe.
On the one hand, the HVAC Division continues to focus on organic growth in the product groups of underfloor heating, heat pumps, and residential ventilation, including their patented filter technology, which can also be offered as a system, and on the other hand on consolidation, process optimisation to increase productivity, and cost leadership in steel panel radiators, column radiators, and design radiators.
While the volume in the Western European radiator market will move sideways over the next few years, the division still expects profitable growth in these products through investments in the growth market of Eastern Europe and Russia as well as through the listed measures. In the past, the division has invested heavily in production processes in order to generate sustainably stable margins above the competition. In addition, it actively participates in the consolidation to gain market shares.
Accelerated growth is pursued with the fast-growing system products such as heat pumps, underfloor heating, as well as ventilation, air-conditioning, and filter technology in order to significantly change the revenue mix of the components and system business by 2025.
The division is focusing its development on the "house of the future": On the basis of existing and new photovoltaic systems in private houses and, in the future, in apartment buildings as well, a system solution is to be developed for heat and cold generation and control, supplemented by storage of the electricity generated by the photovoltaics.
The heat pump market, which has been growing strongly for years, is also benefiting from the European climate targets and their subsidising of CO2-reducing and energy-saving products. For this reason, the HVAC Division is investing in expanding the capacity for energy-efficient systems at its site in the Czech Republic and will build a new production plant there starting in 2021, which will increase the existing production capacity many times over from 2022 onwards.
It is planned to support the accelerated organic growth in system products with targeted acquisitions.
Product management
Arbonia's product management includes quality assurance, product labelling, and product responsibility. Compliance with regulations and standards plays a central role for all divisions.
A large portion of Arbonia's production sites already operate with certifications for environmental management (ISO 14001) and energy (ISO 50001).
Key product management figures
1 Production costs of goods produced at the site, excluding purchases.
Heating, Ventilation and Air Conditioning Division
Standards and regulations for building products are becoming more and more demanding and extensive. For the HVAC Division, the challenge is to meet existing and new requirements and implement them in corresponding products.
The division actively participates in bodies such as the German Institute for Standardisation (DIN) and the Federation of German Heating Industry (BDH). The participation in these bodies enables the division to help shape technical progress and incorporate innovations into its product management early on. Within the division, processes and product programme planning have to be continuously adapted, various certifications have to be carried out, and employees have to be trained. For newly developed or adapted products, documentation must be created and industrial property rights applied for. To increase public interest, the division presents its innovations at design competitions, among other things.
The division measures the success of its product management efforts based on the sales development of new products and feedback from the market environment. In the reporting year, product management primarily focused on reducing and recycling packaging materials and recycling worn-out products. The division introduced a new, highly efficient generation of heat pumps and expanded its remote maintenance capabilities. This ensures that heat pumps installed at end customers are constantly operated at high COP (coefficient of performance) values and thus reduce energy consumption. The product development follows a systematic process with defined milestones for monitoring success. Among other things, attention is paid to the careful use of materials and high recyclability, which favours environmentally friendly, lightweight packaging materials and refrigerants with a low global warming potential (GWP).
Sanitary Equipment Division
Increasingly demanding and comprehensive standards and regulations for building products make internal product management indispensable and justifies its high relevance for the Sanitary Equipment Division. The drive to implement existing and new customer requirements in new products in compliance with applicable regulations and standards is a daily challenge.
The division therefore actively participates in bodies such as the German Institute for Standardisation (DIN) and the German Sanitary Industry Association (VDS). The participation in these bodies enables the division to help shape technical progress and incorporate innovations into the respective product management early on. Within the division, processes and product programme planning have to be continuously adapted, various certifications have to be carried out, and employees have to be trained. For newly developed or adapted products, documentation must be created and industrial property rights applied for.
Through these processes, the division ensures that customers receive an all-round high-quality and durable product: The shower stalls are characterised by exceptional durability and are always tested according to EN 14428 (CE) and PPP 53005 (TÜV/GS), which ensures safety in use with regard to stability, waterproofing, and ease of care, among other things. In addition, the use of single-pane safety glass up to 10 millimetres thick is documented according to EN 12150.
Windows Division
Product management at the Windows Division focuses on the proper labelling of products in accordance with the regulations and laws of the respective sales markets. All products undergo the relevant safety tests and certifications; in particular, they are CE-certified and thus comply with EU standards. In addition, the windows are accredited with the certificates that are important for the respective sales markets. In Germany, for example, this is the RAL mark, and in Switzerland the Minergie and Minergie-ECO labels. Furthermore, the division has been offering products made of FSC- or PEFC-certified wood as standard since 2020.
The Windows Division communicates the technical values and certifications of its products very extensively, including in customer and dealer information, product catalogues, and user manuals. Slovaktual also offers technical consultations to its franchise holders. The company has also introduced a quality management system and complies with the ISO 9001:2016 standard. In addition, products are inspected in accredited laboratories and quality checks are carried out within the company on an ongoing basis to check weld seams, for example. Customer complaints also factor into the quality management.
Doors Division
The product management of the Doors Division focuses on two areas: On the one hand, the products must comply with all legal regulations and be manufactured in conformity with approvals; on the other hand, customer requirements must be met precisely. The division achieves the latter by using the know-how of local companies and coordination at the division level. In this way, it combines the know-how of the production sites with the customer knowledge of the distribution companies. This makes it possible to satisfy even the most demanding customer wishes. A good example is RWD Schlatter and its competence centre for functional doors, which is available to the entire division. Such doors, which meet increased requirements for fire or sound protection among other things, can be adapted to the demands of customers in all markets.
The top priorities for the division are product safety and suitability for everyday use. Both points are continuously monitored internally and externally, for example, through the internal control system and quality management. The operations of Invado in Poland and RWD Schlatter in Switzerland are certified according to ISO 9001, and as a result, standardised processes guarantee the quality of the products, the delivery reliability, and the correct product labelling prescribed for the respective country of sales. RWD Schlatter now places a QR code on the product labels which can be used to call up the product information. In addition, the division carries out in-house production controls, which in turn are checked once a year as part of external audits.
The continuous quality improvements of its products are supported by the constant optimisation of its quality management and manufacturing processes, the modernisation of its machinery, as well as a careful selection of suppliers, who in turn have to meet high quality standards. In the end, however, the contribution of the employees is decisive for high quality standards, which is why the Doors Division offers appropriate training and motivates its employees to take responsibility for the quality of the products.
Important certifications, tests, and seals of approval are the FSC and PEFC certificates for sustainably sourced wood, the pollutant test by the ECO Institute, the Environmental Product Declaration (EPD), the RAL quality mark of the German Institute for Quality Assurance, and energy management according to ISO 50001.
Digitisation
Digitisation offers many opportunities: It simplifies work processes, reduces errors, and offers the possibility of involving users directly in the development of solutions. Arbonia manages digitisation with the help of a specially created organisation, ARBONIA DIGITAL GmbH. This organisation communicates with all levels of the group, involves employees, and continuously provides information on project progress, such as through product demos and newsletters (see ARBONIA DIGITAL, pages 10 – 11).
Arbonia uses digitisation to simplify cooperation at construction sites, for example, with Building Information Modelling (BIM) and Product Information Management (PIM). Digital processes and digitally available information reduce the manual effort for employees and eliminate potential sources of error. They also offer the opportunity to stand out from the competition. Customers, partners, and employees have increasing expectations for the digital representation of service and business models. Direct access to information and services is valued, and simple processes and fast processing times are expected.
In its digitisation projects, Arbonia is guided by user requirements. It applies agile working methods and lean management principles. This means that customers, partners, and users are involved in development processes, prototypes are tested directly in the market, and solutions are implemented quickly without a long planning phase. Mistakes are part of this working procedure; they are allowed and provide important experience values.
The digitisation process is already showing an impact: Partners and customers are becoming more aware of Arbonia's digital competencies. The newly developed "DoorIT" calculation and quotation software for the Doors Division is a flagship project that is gaining recognition both in and outside of the group. The initial aim of this software is to enable the dealers of Prüm and Garant to configure, calculate, and order doors more quickly. Internal processes are also simplified. The go-live is planned for 2021. In the second step, the software is to be made accessible to the other companies of the division as well.