Kongskilde Industries’ CEO Mogens Rüdiger recently did an interview with Agriwatch journalist Peter Høyer. Agriwatch.dk is a Danish agricultural media outlet that writes about branch related business news for primary agriculture.
In the interview, Mogens Rüdiger introduced Kongskilde Industries as a company that sells machinery for the plastics and packaging industry to the industrial sector and grain transport and grain cleaning systems to the grain sector. He points out that the company sees great potential in the grain industry and goes into more detail:
”For many years farmers have preferred the mechanical transfer of grain because the farmers assumed that it takes too much energy to suck up grain using pneumatic transport. However, the acquisition, maintenance, and operating costs for a pneumatic system are significantly lower than for a mechanical system. The acquisition price for a pneumatic transport system is markedly lower than for a mechanical system and maintenance costs are also significantly lower, because a pneumatic system doesn’t have any wearing parts. Kongskilde Industries sells both pneumatic and mechanical transport systems, and calculations show that the mechanical systems have to last for more than 28 years to be cheaper than pneumatic transport systems. And only the minority (of mechanical systems) do that!
The pneumatic system works using compressed air and the CEO expects that expanding knowledge of the advantages of pneumatic systems will create good momentum for the sale of blowers.
In addition, the grain department at Kongskilde Industries focuses on the sale of machinery for grain cleaning, which is in great demand.
”Grain cleaning has become more relevant as the focus on ecology and the farmer’s use of their own crops for their animals has increased. If farmers sell their grain, they also get a higher price if the grain has been cleaned, which contributes to increased sales of grain cleaners,” says Mogens Rüdiger.
Investment in growth
In 2019, Kongskilde Industries invested just under 10 million DKK in a completely new painting plant in Sorø, and the company also hired new employees, which should contribute to expanding growth in the future. The company anticipates investing more than 10 million additional DKK in 2020. The owners, Green Park Partners completely support this (investment).
Mogens says that 2019 has been a really good year for Kongskilde Industries:
« We are making money and we have done that every year since 2017, when we started selling agricultural machinery. However, 2019 has been characterized by building more muscle with more new sellers, the start-up of a marketing division, and increased product development, etc. For that reason earnings fell a little but that was completely expected, and we anticipate that 2020 will be a good year. And it looks like 2020 is going as well as expected. I am certain that our owners are ready to throw more money at us in 2021 for additional growth. »
The company has not published its accounts for 2019 yet, but according to the CEO the year was good. He adds:
« Despite pressure on the grain market in 2019 due to the poor harvest the previous year, we earned good money in 2019. I can’t give specific numbers because at this moment the annual accounts have not been completed.”
Experience creates an advantage
Kongskilde Industries has long time experience with pneumatics and machines for processing grain. The company was owned by the DLG farm supply company from 2007 to 2018, when emphasis was on the production of agricultural equipment, but in 2017 that part of the business was sold to CNH Industrial. In 2018, when Kongskilde Industries got its new owners, Green Park Partners, the company was able to focus entirely on the niches that are currently the company’s core business.
“We started making pneumatic transport devices 70 years ago, so we have enormously long experience making blowers that are optimal and can move very large amounts of grain using a relatively low amount of energy. And our blowers last for 20-30 years. Obviously, you get a reputation on the market if your blower lasts from one generation to the next. That makes your (product) attractive, » says the CEO.
Will conquer large markets as a small player
Kongskilde Industries’ largest markets are France, Denmark, Germany, England, and the USA, but it is also active in Asia and South America. The company has sales companies in all of the countries mentioned above as well as in Poland, Spain, Thailand, and South Africa.
The journey of the company’s growth and the great demand for machinery for the grain industry creates great expectations for reaching new customers in the large markets. According to the CEO, there are plenty of customers to take care of and he thinks that as a small player the company can capture market shares in France and the USA (among other places) relatively unnoticed.
With respect to France, the CEO also anticipates that in 2020 the market will return to what Kongskilde is used to seeing, which means good growth. And with respect to the USA, the company is already focusing on a share of the American market, which is precisely one of the places where Kongskilde has increased the number of sellers.
« We are really small in the USA. But we are making a conscious effort to employ more sellers and use more money for marketing because the marketing possibilities are enormous,” says Mogens and adds that in the end of January the American company had a seminar for 38 dealers who were very enthusiastic about Kongskilde Industries’ products.
Even though Kongskilde Industries has competitors all over the world, the CEO is of the opinion that the company can distinguish itself, among other things, with its blowers, which the company has 70 years of experience making.
« Given that we have broad coverage all over the world, we have many competitors, usually local ones. But we are probably the only international company that focuses on pneumatics, and we are among the best in the world in that area. That is the best place for us to out-compete the competitors,” emphasizes Mogens and continues:
“We are impacted when farmers have a bad harvest and don’t want to invest and renew their production apparatus. Then we take a hit. In general I would say that Kongskilde has such a small market share in Europe and in the USA that we could actually grow to twice our size without disturbing any specific competitors.”
The news article above comes from an interview with Agriwatch that resulted in two articles: both of which can be read in full at: www.agriwatch.dk.