In this interview by Global Industry, Ricardo Garcia, Vice President South Europe, Benteler, talks about the future of the automotive industry and how digitalisation is changing processes,
Digitalisation is changing the way we produce. Will AI accelerate this process more than expected?
Industry is moving forward unstoppably and digitalisation is undoubtedly changing the way we produce.
At Benteler we are digitising all our plants and Big Data and AI techniques ensure automation and standardisation along the entire value chain to deliver world-class products to customers. In this respect, we have developed a platform that we call SPDP (Smart Production Data Platform) where we can store an infinite amount of data whose subsequent analysis allows us, for example, for our installations to request maintenance themselves when it is necessary and notify a manager via tablet.
Digitisation helps us to have more information, which is used to make better decisions, as well as to improve the quality and repeatability of products. In this way we provide a better service to our customers.
On the other hand, experts are needed to control these technologies. That is why at all our locations we are working with universities on dual training, scholarships and other means to develop experts for the future. Regrettably, In Spain, investment in this area, in R&D&I, has traditionally been an unfinished business in comparison with other EU countries: Here we spend around 1.25% of our GDP, while the EU average is 2.07% and states such as Germany and Switzerland are above 3%. There is a significant gap between investment by firms and public investment, which limits the potential for innovation in Spain. It is clear that we need more public investment.
In his presentation at Mindtech, he highlighted Benteler’s commitment to clean transport with technologies such as eco-friendly products. What are they?
About 90% of our products are independent of technologies or propulsion type.
However, the automotive industry is changing significantly because of the need to reduce impacts on the environment and also because of innovations such as partial driving, which in the future will be fully autonomous. At Benteler we have developed a fully autonomous, electric vehicle with our subsidiary Holon.
Our passenger vehicle (Holon Mover) is already being shown in cities such as Hamburg. We also developed a fully finished battery platform, which we call BEDS (Benteler Electric Drive System). These are two examples of our engineering expertise in the field of electric mobility. That said, I am convinced that sustainability must have a holistic approach in any company. Our products are shifting towards sustainable driving, but we are also doing so in production, reducing our environmental impact, or in the raw materials we buy, green electricity or green steels.
Forecasts suggest that sales will increase most in Asia, but in green transport, China and India are the antipodes of Europe. Should the strategies in these countries be different?
It is true that there are forecasts for the European market that say it will remain stable for the next ten years. However, given the current state of the automotive market, it is very risky to make long-term forecasts. If Covid has taught us anything, it is that we should be cautious about predicting the future.
At Benteler we have proven more than once that we are able to navigate in these uncertain times. We have clear processes and, most importantly, the ability to adapt quickly to the changing market environment and customer needs.
Currently, except partially in China, there is not enough electric car infrastructure anywhere. Neither in Europe, nor in the rest of Asia-Pacific nor in the Americas. At the same time, different technologies are being developed.
Hydrogen is the one where there seems to be most hope, but there are many others, such as Helium 3, biofuels, synthetic fuels, solar energy… It is likely that the future will see different types of vehicles with different types of combustion depending on their use. Electrics for use in large cities and city transport, hydrogen for longdistances, perhaps biofuels for travelling into the future? We live in a very exciting world right now, where almost everything is undefined, and everything is possible.
The pandemic demonstrated the industry’s heavy dependence on giants such as China. Do you think a return to local production is possible without falling into protectionism?
The pandemic has had the capacity to reshape global economies. More protectionist measures and ideas of more closed markets have been implemented. This has also forced companies to redesign their strategies, diversify markets, duplicate processes in different locations, relocate or regionalise production.
Gradually, the trend is to return to local production, at least to have a balance between globalisation and localisation. This ensures a more sustainable business, reduces risks, increases customer confidence and guarantees supply chain flows that would be less affected by political or social events. In fact, our customers want us closer, less than 250 kilometres from where the car will be produced. Looking ahead, I am sure there will be a healthy balance between “localisation” and “globalisation”, for a more sustainable and less risky business.
The German Benteler Group is a benchmark in the industry: more than 23,000 employees in 28 countries and top-level plants around the world. How does a multinational company tackle the path towards a more sustainable industry?
As I said, sustainability has a holistic approach, it influences the whole company and all areas. It is not only about saving water or installing solar panels, it includes topics as diverse as talent management, equal opportunities or the circular economy and reuse.
At Benteler we are working on sustainable solutions. We have focused on five SDGs (Sustainable Development Goals) that we can influence. For example, we are going to reach zero CO2 emissions by 2050.We already have photovoltaic installations at our plants in Galicia (Mos and Vigo), and we are in the project phase for those in Castilla y León. The Burgos plant has received the “Zero Waste Management” certificate with an excellent level of commitment, which means that more than 95% of the waste generated in the plant has an alternative, circular management, which does not go to landfill.
We also have agreements with our raw material suppliers and use steel, aluminium and green energy, and we have implemented Big Data projects that help us reduce gas and water consumption on our hot stamping lines and electricity consumption at plant level. We also have a strict equal opportunities policy and work proactively on integration. For example, our logistics team consists of eight people from six different nationalities, as far apart as Ecuador or the Czech Republic, all working in the same office and as a team.
How do you assess the automotive sector in Galicia?
Galicia is an autonomous region with a lot of experience in the sector and brings stability and confidence, with institutions and stakeholders focused on attracting capital and industry to the area.. In 2022, it produced 19% of the vehicles manufactured in Spain. And our two Galician plants, in Valladares and Mos, are there, serving our customers.
Our Mos plant has been created as the model digital pilot plant. It is an example for all our plants worldwide, who come here to learn the model. As we have already mentioned, that means having a lot of experts, people with great knowledge not only of automotive, but also of digitalisation. Galicia has an excellent pool of trained and knowledgeable people.