Here we speak to Tassilo Deinzer, member of the executive board at Hilti Group – responsible for the Fastening & Protection Business Area, about the role of the CPR and ETA system within the construction sector and how a commitment to quality can also lead to innovation.
Our last interview with Hilti was at the start of the Covid-19 pandemic. Clearly there have been numerous challenges over the last two years. Therefore, before we talk about the CPR and quality, what have been the key developments at Hilti in this time?
“Firstly, we need to separate the internal development within the company from the external environment. Internally I think we made good progress to implement our Champion 2020 corporate strategy, and innovation, in the industry. We also followed through with what we said we would do on topics such as digitalisation and our sustainability strategy.
Reflecting on the external environment, obviously we are living in a period where it couldn’t get more complicated or more volatile. This has to do with supply chain interruptions, with the situation regarding Covid-19 and the ongoing war in Ukraine, as well as a variety of other factors. These have all created additional challenges to us as a company and for everyone else around the world. Based on the resilience we have built up as a group, as well as the success of the Champion 2020 strategy, we have been able to achieve a lot of good things internally – whilst weathering the external storm.”
How have the construction markets around the world been impacted by all these different factors? What has Hilti done to support its customers?
“First of all, being a reliable partner to our customers in situations like this one is of upmost importance. It is vital we are close to our customers and answer their needs. That starts with ensuring that we are delivering the products we have promised to deliver. For example, if an anchor is not available on a jobsite, then the work on the jobsite cannot continue, which is unacceptable.
To be close to our customers and to be a good partner means that we are also able to find reasonable ways of handling challenges, such as inflation. Like everybody, we have also been hit by raw material price increases and it is about finding the right balance between a
long-term partnership and the needs of securing a reasonable profitability. This is where our direct sales business model is an advantage because we have direct interaction with our customers.”
A recent development within the construction sector was the European Commission publishing a revised proposal for the CPR. What are your thoughts firstly on the CPR and on the revised proposal?
“From my perspective the current CPR process, in its form before the revision, works. It adds a lot of value to the European industry when it comes to fasteners, as we have a harmonised system in Europe that allows for a level playing field for all the suppliers in the industry. This also fosters innovation within a reasonable timeframe. If you take a look at how many ETAs are published, it is a clear signal that the industry is vibrant and is able to adapt to the needs of the customers when it comes to new building methodologies, different applications, etc. We therefore see the current EAD route as a positive one for everybody with some improvement potential: The speed of some of the administrative processes at EOTA and EC level is slow. The CPR draft does not resolve these concerns, but rather increases complexity and adds uncertainty. Today, the publication of EADs in the OJEU can take up to three years, this is not acceptable.
There are more topics within the revised draft CPR that need a closer look. Especially EADs being outside of the “Harmonized Zone” and the extremely long transitional period between existing and new CPR need to be modified to maintain the current high agility and European harmonisation momentum for the construction sector. Overall, EADs provide a good framework for the industry and provide a European level playing field.
One thing that we fully support within the CPR revision is the emphasis on sustainability. This is a very positive thing, not only from an industry perspective, but also from a humanity point of view. Sustainability needs to be addressed by everybody and we are all aware of the massive footprint of the construction industry. I believe the fastener industry can support the construction market as a whole in lowering the CO2 footprint when it comes to the construction of buildings.
Another key part of the CPR proposal is the lifecycle of products. At Hilti we have two main business areas – tools and fasteners. On the tool side the prospect of circular economies and lifecycle of products is something that we have been engaged in for several years and we have a business model that is called fleet management, where we take tools back from our customers and ensure there is a recycling plan behind it. We are leading the way in this area, as we are getting the tools back from customers and then working in a closed loop system.
When it comes to fasteners, the changes will come through building methods – modular design, modular construction, etc. The construction industry is not usually an early adopter of new ideas or technologies. It is a complex industry with a lot of players coming together to develop the finished products. However, from my perspective modular construction is clearly something that will increase in importance going forward. This is based on not only the sustainability and circular economy aspects, but also when it comes to a more productive way of building and the adaptability of buildings – possibly even less costly construction.
I think as an industry we are just starting to learn about this area, but I firmly believe that it is something that needs to be developed by the entire sector. It could be a great opportunity for the industry to address the needs of the market and customers. As suppliers to the industry, it also opens up a new innovation cycle. At Hilti we are looking at what our role is in supporting and driving these changes in building methodologies and it will also remain a clear focus for us going forward.”
How important is it to have recognised quality standards and regulations (such as EADs/ETAs) for construction products? How do you get customers to focus on quality rather than the price of products?
“The ETA system is very good and has a lot of benefits for customers, as well as manufacturers. It gives a level playing field and allows for innovation. We are very positive about ETAs and believe this is the way we should continue to work as an industry, alongside the European Commission.
As for quality versus price, I believe the key thing is that customers are always looking for value. If someone aims to provide the right value, then whilst price will play a role it is not the dominating factor. When it comes to safety on construction sites or the safety of a building, or additional services – engineering, modelling, etc – it is not the price of the product that drives the customer’s decision process.
As a supplier, if you can deliver on value then that is what is going to make the difference. At Hilti this is what we are striving for.
We make sure to have conversations with customers and find the right solution that serves the purpose. Sometimes, it might even be a more economical solution. If, for example, a certain application is over specified we reduce the material used for the application – such as installation systems or hanging pipe applications (value engineering). This underlines that a focus on the price per fixing point is not the right way to go, and a conversation about value is much better and productive.”
How do regulatory developments within the sector, and the requirements of customers, impact you as a business? How do you keep on top of such developments?
“This is where our business model really benefits us. We have over 18,000 employees out on construction sites having conversations with customers on what they need. This can help identify applications that potentially need new technology to allow for productivity gains. We then follow this up with solid research and engineering work to find a solution.
By doing this we are creating a nice circular loop, where we can talk to customers and then develop groundbreaking innovations, which then help customers be more productive. Thanks to the work we have done in the past, Hilti has become known for innovation and its R&D capabilities. This helps us attract more customers to approach and speak to us.
A prime example is our robotics sector, where we have seen interest from customers looking at embarking on a digitalisation journey – maybe due to a shortage of labour or to improve productivity. From this we start a conversation about the different options – whether it be robotics or BIM (Building Information Modelling) or other propositions that we can bring to the table.
Customers recognise us as a productivity partner within the industry and through these discussions it opens up other conversations that you might not have if we just served a basic customer need.”
You mention robotics and digitalisation, which all fit within the trend for industrialisation within the construction sector. Does Hilti still see this as one of the biggest opportunities for the market – especially with the continued labour shortage issues?
“Absolutely, I wholeheartedly believe that industrialisation in the industry is happening today. I think some of the ideas are being implemented and not just in a prototype stage; they are developed and being put in place. From our perspective a lot of these topics come together – when it comes to digitalisation or modelling. This goes hand in hand with the opportunity to have feedback loops from the construction site and the project. By feeding back the information you can learn more and go back to the modelling to develop it even further. This enables customers to develop buildings in a more industrialised way.
Will industrialisation take over everything in the construction industry? No. There will always be iconic buildings around the world. However, I think we do need to have a different perspective on how construction can work. It is happening and will continue to grow.”
Out of the areas mentioned –digitalisation pre-fabrication, robotics, etc – what do you see as having the biggest influence on the construction market?
“I believe that everything needs to come together. The gains we will see on productivity will only happen if we treat this all as one area of innovation. For example, using a robot on a jobsite is possible without BIM, but it is not as efficient as it could be if you haven’t already laid out all the anchor holes or fixing points. Therefore, I do not think it is a case of ‘either/or’ but more of an ‘and’ in order to drive the next stage of production.
The question is whether with the current market and challenges are now an opportunity to take a leap forward?
Changes or disruptions always create innovation and the desire to change something. With the unpredictable things that have happened, we also understand that in these phases there is always an opportunity for innovation. There is an opportunity to bring in differentiation and a new way of doing things.”
Will joined Fastener + Fixing Magazine in 2007 and over the last 15 years has experienced every facet of the fastener sector - interviewing key figures within the industry and visiting leading companies and exhibitions around the globe.
Will manages the content strategy across all platforms and is the guardian for the high editorial standards that the Magazine is renowned.