Interview with Axel Förster

"We still have entrepreneurial freedom, although that is increasingly being restricted without need." - Axel Förster, CEO Rychiger AG, filling systems for coffee capsules

Mr. Förster, the strong franc is rampant. As an export-oriented company, you are certainly affected by it. Does that still make you feel like celebrating?

Axel Förster: The euro issue - yes, it sunk in overnight. Losing 20 percent of our competitiveness is unpleasant. Well, we've been through that before, but not overnight. That's something to worry about. Above all, the book losses and the realized losses of expiring projects - sold in euros and built up in Swiss francs - that can no longer be salvaged. We export 95 percent of our products, and the 5 percent that we sell locally are of course offered 20 percent cheaper by our competitors. That's brutal. But we have to look ahead and act.

What specific measures have you taken - apart from waiving margins?

The first thing we did was to increase the number of hours from 40 to 42. This has already brought a 5 percent cost advantage on wages. We have also launched a cost-cutting program, but communicated to our employees that we will not be making any compulsory redundancies in the next six months. This buys us the time we need to assess the situation calmly. It is very important for us that we can purchase all materials at the same favorable conditions as our European competitors from southern Germany or northern Italy.

You supply the food, healthcare and pet food industries. Which of these is proving particularly challenging?

Healthcare people are particularly demanding when it comes to validation, but they don't always want to get the last ounce out of a machine. The food people, on the other hand, want highly productive systems and to push their performance to the limit. They have become more demanding in terms of hygiene and occupational safety. Every industry has its own requirements. As a plant manufacturer, you have to understand these.

You also manufacture the machines on which the coffee capsules are filled. How has the boom around Nespresso and related products changed your business?

For us, that's the wave of success we're riding at the moment. The coffee capsule story started around the turn of the millennium. But we've been supplying Nespresso for a long time - it just wasn't a success story at the beginning. Since about 2000, our market has been booming. Today, an estimated 30 to 40 billion capsules are consumed every year. That's a lot.

And the trend is rising, considering that new markets are only just discovering coffee for themselves?

That's our main business right now, yes.

And in other areas is it stagnating?

At least the business is no longer growing as strongly, perhaps still at 1 to 7 percent, depending on the category. Pet food, on the other hand, is a business area for us that generates ongoing sales, but we could never survive on that alone.

What are the actual market drivers?

In the healthcare sector, it is demographics that play an important role. We are particularly aware of this, for example, with diagnostics for diabetics, which are also available in a type of portion packs. Due to higher life expectancy, the number of diabetics is rising and with it the need for such applications.

To what extent is technology a market driver? I.e. do you create new markets yourself with innovations?

Through applied research, we try to use things that already exist more sensibly and bend them to our purposes. Our focus is on making the machines even faster, even safer and even cheaper. And the subject of hygiene has gained in importance in recent years. TPM, Total Productive Maintenance, should also be mentioned: the machines should be easier and easier to operate. These are all things where we as machine manufacturers can set trends and higher standards.

You produce exclusively in Switzerland. What are the arguments in favor of Steffisburg as a production location? Despite high labor costs and the current strength of the Swiss franc?

Clearly the regulatory environment - for now.

Why "still"?

We have a highly flexible labor market, top-motivated people with a high level of identification with our company. We have no problems with unions. We still have entrepreneurial freedom, although this is being increasingly restricted without necessity. Thun is the largest mechanical engineering location in German-speaking Switzerland, and we get the specialists we need here. That is not to be underestimated.

You are both Managing Director and Chairman of the Board of Directors of the company. What is your personal fascination with this dual function?

The dual function is rather common for an SME of our size, and a great task. I'm the "jack of all trades", so to speak, and I'm involved in all disciplines. But I give my people a lot of freedom and try to let them do things on their own. But of all of them, I probably have the most complete job. That's very exciting.

What does that look like in terms of labor economics? Do you really reconcile everything?

Sometimes rather bad ...

Where do you get the balance you need?

Sports are very important to me. If there's no customer visiting over lunch, I'd rather do sports than go out to eat somewhere. My children and my family are also very important to me.

In which direction do you want to further develop Rychiger AG?

It is certainly a question of maintaining and consolidating our position in the coffee capsule market and, if possible, also expanding into the upstream and downstream processes. At the same time, we need to build up a second solid pillar in the healthcare sector.

How difficult is it to break into this market as a newcomer?

It's not easy. People want to see references. If you can't provide any, it's difficult. But once you're in, it's hard to get out. So we focus on a few segments that we work on intensively. The goal is to get references in these segments so that we can prove our competence.

And what segments are you talking about exactly?

For us, it's mainly diagnostics and medical devices. We are also keeping our eyes open for companies that can complement us. Acquisitions are therefore quite conceivable.

Does the Swiss market offer this potential?

There is already potential here, but it is limited. In the mechanical engineering sector, takeover candidates are mainly to be found in the north of Italy and in southern Germany. But of course there would be nothing to say against a Swiss company.

On the other hand, could you open up more favorable production locations with a partner in the euro zone?

There are plans to set up a subsidiary in the euro zone, but for a different purpose: we want to build small and simple machines there, which we cannot do here in Switzerland. Not because it would be too expensive here, but because we think too elaborately. Here, we build "blue chip" technology for the big players, like Nestlé. But if we think about small coffee roasters, they don't need much of our equipment. That's why we need a small engineering department elsewhere to design small and simple machines. Euroland is predestined for this; but our aim is not to relocate production, but to open up a new business field.

Finally, back to the award: How do you judge the value, the sustainability of an award? Just something for the ego?

The value cannot be overstated. It's about the people who are proud to have come first. And the media presence should not be underestimated. As a company, you are better perceived by the public. What we have achieved with the award, we also achieve with our customers. We bring enthusiasm with us. I call this the "Rychiger virus". You feel it when you walk through the hall. And then it's insanely beautiful plants that we build. Sometimes 20 to 25 meters long, and a lot of technology goes into them. The employees are proud to build such machines. You can feel that - and many of our customers feel it, too.