Jurgen Utschig, Sielaff GmbH & Co KG’s MD, talks recession, innovation and how Germany’s leading vending machine manufacturer is preparing for the future
By Ian Armitage
Few businesses can boast that they were started over 120 years ago and are still trading today, but German manufacturer Sielaff GmbH & Co KG Automatenbau can.
With a wealth of experience in creating vending machines, it is renowned for innovation, consistency and high quality.
“Our long-standing experience in manufacturing vending machines assures our customers that they have products of the highest quality,” says Sielaff’s 53-year-old Managing Director Jurgen Utschig.
Unsurprisingly, Sielaff, which has subsidiaries in France, the UK, Switzerland, Austria, the Czech Republic and Australia, is, as a result, the market leader in vending machine production.
“The company was founded in Berlin in 1886 by Max Sielaff, who was granted the first patent on a vending machine in 1888,” adds Utschig, referring to the firm’s interesting past. “In the beginning, the business concentrated on the manufacture of confectionery machines with working coin validators, cigarette vendors, cigar vendors, stamp machines and scales, which are still in active use today. In 1949, Edmund Sielaff, Johannes Marohn and Fritz Baumgärtner re-formed the company in Herrieden. The company is still in the ownership of the Baumgärtner family, with four daughters of the founder being the sole partners.”
Although Sielaff has a long and distinguished history, it is the recent past which has brought about significant change. “The year 2000 marked the development of the combi-vendor, a machine combining the dispensing of cold drinks and confectionery, and this marked a new period for Sielaff,” says Utschig.
“Since that time we have concentrated heavily on the production of hot beverage machines to include instant, freshbrew and espresso.
“In 2004, we began to develop a completely new product range – bottle/can reverse vending machines for discount and supermarket outlets – and, at the end of 2007, the Baristo Uno premiered. That is a coffee machine for public vending sites, which dispenses speciality coffees, and is the same shape and size as an advertising column. Today, the Barista Uno can be found on virtually every ‘Tank und Rast’ service station in Germany and Switzerland.”
Sielaff is also an OEM manufacturer, offering customisation services that fit in with almost any requirements: “Our production skills and our high competence in sheet processing mean we are in a position to be able to offer favourable production capacity to third parties,” explains Utschig.
“In this way, customers can be supported by our R&D department, using their experience to influence the best in production technology. We have already produced components from sheet to final checked product, for a well-known ticket machine manufacturer in Germany.”
The meltdown
2008 was, in Utschig’s words, “a most successful year” for Sielaff. But, it hasn’t escaped the effects of the current financial and economic meltdown.
“We are seeing companies closing and suddenly there is a large amount of surplus machines in the market,” explains Utschig. “Short time working in many companies is impacting on the operators, who are only able to generate reduced turnover, which subsequently leads to a fall in investments.
“We have noticed only a slight decline in the reverse vending and speciality hot drinks sectors, and anticipate that our new developments in these two areas will compensate for the current trends in other sectors.”
In response, Sielaff’s 40-strong R&D team is working on developing new innovations in several diverse sectors. “We know from experience that even innovative products have to be accepted into the market place,” says Utschig. “We always have to be able to quickly and successfully serve our customers with our ‘Made in Germany’ quality and anticipate that from the middle of this year we should be able to compensate for the first six weaker months.”
Since the middle of last year, Sielaff has been adjusting to meet future demands, reviewing the entire organisation and all internal processes. It is now much more flexible, able to react quickly to changes in the market.
“We are able to react faster, and are more flexible towards market requirements. One example of this is the re-organisation of our Customer Services, whose emphasis has been moved away from product and towards customer-related order processing,” explains Utschig.
“Further investment in new improved production technology is planned for 2009, with the initial capital equipment orders placed.”
Insource, not outsource
For many years, Sielaff’s philosophy has been to ‘insource, not outsource’ and it is this that has given it the flexibility necessary to respond quickly to changes in the market. “Our wider focus is now in the speciality hot beverage sector and OEM-production,” explains Utschig, talking about the firm’s future.
“Due to our high production skills reflected in our product quality and flexibility, we expect to be able to extend our core business. These strengths will enable us to achieve the goal of increasing our market share internationally by strengthening our sales activities, introducing innovative new vending products.”