Take a tour of Fischer’s German production hub
Known for its fixing expertise, including chemical bonds and steel anchors, Fischer is celebrating a decade of operations in the Gulf. Construction Week visits the firm’s headquarters in Germany
It was a bucket of goldfish that provided the basis for one of Fischer’s first big contract wins in the Gulf, when maritime contractor Van Oord needed a chemical fixing that could be used for the underwater construction applications at Dubai’s Palm Jumeirah. Deep sea divers were to drill into coral and then use the mortar to fix steel hooks, so that the coral could be towed onto the man-made island. And if the chemical fixing was toxic to aquatic life, it risked killing the coral. After the hapless goldfish were seen to have been unaffected by the chemical bond, Fischer won a multimillion-dirham contract.
Unusual as the story may be, it’s now almost routine for products made by Fischer to be used on megaprojects in the Gulf, especially those that require an innovative approach to the engineering. The company’s products – including steel anchors, façade fixings, and chemical bonds – can be found on landmark building across the region, such as the UAE’s Burj Khalifa, Saudi Arabia’s Makkah Royal Clock Tower Hotel, and the Oman Convention and Exhibition Centre (OCEC).
Fischer’s portfolio has also been utilised for infrastructure projects, including the Dubai Metro, and the Gold, Green and Red lines of Doha Metro. Meanwhile, the company’s SaMontec heating, ventilation, and air conditioning (HVAC) installation system was used to design a tricky installation in the ceiling of the new Louvre Abu Dhabi.
This year, the German fixing specialist marks a decade in the Gulf since it opened its fully owned subsidiary in Dubai. With revenue last year reaching nearly $40m (AED145m), it has seen continuous growth. 2016 will also see the Middle East subsidiary open a new regional office for the Gulf and Pakistan, which will host a new training academy.
The company hopes that this growth trajectory will continue. Speaking to Construction Week, chief executive officer, Klaus Fischer, says he’s optimistic about the region’s direction, but notes that forecasting precisely is difficult due to uncertainty over the impact of the low oil price.
“[In the Gulf], everything depends on oil,” he explains. “There will come a time when oil no longer has the significance that it has today, and a lot less will be used, which is a positive development. But on the whole, I see the economic development in the Gulf as being very good.”
Since Fischer took over the family-owned business from his father in 1982, he has transformed it into an international concern, adding consultancy and automotive interior parts divisions to its core business of construction products. Headquartered in Waldachtal-Tumlingen, a sleepy town in southern Germany’s Black Forest region, the firm has seen revenue grow steadily during the last decade – its 2015 turnover topped $800m (EUR711m).
The Gulf is an important market for Fischer: its second largest non-European market after China, and its fifth largest overall (Germany is the largest, followed by Italy and France).
With a business strategy centred on innovation and technological development, much of Fischer’s focus is on streamlining factory processes, using lean manufacturing techniques, and the principle of ‘kaizen’, which translates to ‘continuous improvement’. Last year, the company’s production network of four factories in Germany received a national Factory of the Year Award. Moreover, Fischer is continuously engaged in research and development – it files on average 12.4 patents per 1,000 employees, well above the German national average of 0.58.
With much of its product portfolio designed to be installed on buildings that are subject to continuous forces over long lifecycles, ensuring quality is paramount. Rigorous quality control measures are in place at Fischer’s factories, which are capable of producing literally millions of units at short notice.
These measures include long-term tests, where anchors are installed and then measured for deflection after 10 or 20 years. Most of the company’s anchors are guaranteed for 50 years, according to European Technical Approval (ETA). This focus on efficiency also extends to Fischer’s business practices. The company does not take on high levels of bank debt, allowing it to avoid hefty service costs.
In a bid to keep pace with the changing technical requirements of the construction industry, Fischer is taking advantage of new developments in production technology. One example of this evolution is its use of 3D printers to manufacture components. Commenting on the influence of 3D printing on the construction market as a whole, the firm’s CEO contends that, initially, it will have the biggest impact in the home improvement segment. The technology can be used to make products on the spot for customers. However, Fischer is expecting few changes on large-scale commercial construction projects in the shorter term, because the process is “too difficult”.
He continues: “We use [3D printers] in our factories, and work has to be done with very thin layers, one atop the other. In terms of large-scale production, it won’t work; it takes a lot of time. [Nevertheless], the number of errors is dropping.”
The company is also researching products that can form part of the Internet of Things, also known as Industry 4.0. Sensors integrated within anchors fitted to buildings, bridges, or tunnels, can be used to produce data measurements across the lifecycles of assets. Although the technology is still years away from reaching the market, it has the potential to produce major benefits, such as minimising the need for expensive shutdowns of infrastructure assets for inspections or audits.
Indeed, when it comes to Industry 4.0, Fischer asserts that his company is among Germany’s foremost players, despite its relatively small size compared to firms like Siemens and the country’s leading automakers. A visit to Fischer’s main factory, which is located within the well-manicured grounds of its headquarters, reveals that robots and automatic machine tools conduct the majority of production activities. This, according to the company’s CEO, benefits quality and the bottom line; while output has increased during recent years, the number of employees working on the factory floor has remained fairly static.
When Fischer’s Dubai office opened in 2006, the company already enjoyed solid brand recognition in the Gulf. Many of the international contractors and consultants working in the region had previous experience of Fischer products from their European projects. This head start facilitated many of the company’s early GCC contract wins.
Jayanta Mukherjee, managing director of Fischer FZE in Dubai, has been with the firm since it opened its doors in the Gulf. He looks back on the subsidiary’s early days – which took place against the backdrop of Dubai’s construction boom – with fondness.
“The [world’s] tallest tower, biggest mall, and the region’s first metro project [were all in their infancy],” he recalls. “It was a great time for us. Since then, we’ve never looked back. If you look at the skyline of the Middle East, you will see many fixings that have been designed and supplied by us.”
Yet from the start, with a lengthy list of products, Fischer had to work hard to educate the Gulf market, especially in terms of safety and technical specifications. “We are an engineering company, not a trader,” notes Mukherjee.
With chemical bonds designed to withstand extremely high temperatures, Fischer conducted seminars in conjunction with regional consultants. Mukherjee and his colleagues were surprised to learn that many of their rivals were basing their maximum temperature specifications on the ambient temperature of the region’s hottest days – up to 48°C. When the mercury hits 46°C, temperatures inside concrete, which absorbs heat, can hit 60°, he explains.
“[Our competitors] were using products that would [turn to] jelly in high temperatures,” he says. “[Today,] it’s quite well known that you have to look at the concrete temperature, not the ambient temperature.”
As for steel components, selecting the right level of protection is also important. In the case of buildings close to the sea, some consultants do not look at specifications; they just recommend normal galvanisation, according to Mukherjee.
“This will save cost, but if it is near the sea, the galvanisation will not last more than two to three years,” he comments. “So, you need a hot-dip galvanised product.”
Ordinary galvanisation is around 10 microns thick, whereas the hot-dip method provides protection of 70 to 80 microns. This results in a much longer life for assets in corrosive environments, and in extreme cases, stainless steel can be specified. “If the correct product is recommended at the outset, you save a lot of money later on,” explains Mukherjee.
Façade fixings represent Fischer’s main product group. The company provides a selection of lines within this segment, such as advanced curtain-wall technique (ACT) façades. With more than 1,300 articles in its catalogue, Fischer also boasts the widest range of chemical fixings of any manufacturer. In addition, it offers passive fire protection systems, HVAC installation systems, products with solar-related applications, brackets, and design software.
Generally, demand for anchors and other fixings in the Gulf is dominated by ‘no-name’ players, according to Mukherjee. However, he says that when a consultant or contractor is working on a high-profile building – where safety and security come to the fore – and when they require designs and calculations, they tend to look to international brands.
Fischer uses sophisticated software across its product lines to allow for the calculation of loads and variables, whether for external façades, tunnels’ escape platforms, or HVAC installation. In turn, these technologies allow it to select the correct set of fixing products to meet projects’ specifications. With municipalities expecting buildings to comply with new earthquake codes, and rigorous fire safety and engineering specifications for infrastructure projects, demand for this type of technical expertise is increasing rapidly.
Of course, the lacklustre oil price presents its own set of challenges for the Gulf’s construction market. Mukherjee says that, overall, Fischer has witnessed a significant slowdown in Saudi Arabia this year. However, he also notes that the versatility of the company’s project portfolio means that it is not dependent on megaprojects; it also caters to second-tier projects with healthy levels of cash flow.
Market sentiment in the UAE was optimistic at the beginning of the year, with a raft of fresh project announcements, but Mukherjee says that this situation has since tightened. Fischer’s products are used across the entire lifecycle of a project, from the anchors required at the foundation stage through to the final touches of interior finishing work. As such, the firm often deals with multiple contractors on a single project, and it has found that cash flow challenges are becoming more evident.
Commenting on contractors that have been working primarily on government projects, Mukherjee says: “For these [outfits], we see that they have a problem. But we try to balance that out with a mix of contractors, so that we can continue to support the market without stopping deliveries.”
Even so, Fischer has seen continued growth in the Gulf since opening its Dubai-based subsidiary, and Mukherjee is optimistic about 2016. Indeed, he is expecting to achieve revenue in excess of $40.8m (AED150m).
“We’re always growing, year on year,” he explains, adding that Fischer’s strategy is to continue to target high-performing consultants and contractors. “There are those that want to learn about the new technologies that are being used worldwide; [these companies] want to be ahead of others. There are other firms that say: ‘If my job is done then I’m happy.’ To grow their markets, they are looking to reach out to more contractors and to educate them about the benefits. At Fischer, we invest a lot in research and development (R&D), and we always try to bring this knowledge to consultants and contractors.”
For Mukherjee, the most exciting part of his job is the variety and scale of the major Gulf projects to which Fischer caters. What might seem like, on paper, a beautiful façade or an innovative use of space, often translates to a distinct engineering challenge for both the consultant and for Fischer. Encouragingly, given that the region’s developers and architects are constantly looking to create bold new projects that will stand out from the competition, this challenge shows no sign of abating.