24 Feb 2020
EUR 75 million
Industries and services
“FLSmidth has to invest heavily in R&D to stay ahead of our competitors. The NIB loan is a crucial part of securing our leading position through intensive R&D,” says Ben Guren, FLSmidth Group Executive Vice-President and CFO.
His company has signed a loan agreement with NIB, totalling EUR 130 million, for developing new products for the cement and mineral industries. The NIB Newsletter spoke with Mr Guren.
What is the purpose of the loan? What new products is FLSmidth developing? What markets are they for?
“We are working on improving and developing new products with the aim of reducing CO2 and other emission, as well as meeting industry demands for lower costs and higher efficiency. Apart from that, we cannot reveal any public information on our new products pipeline since it is a vital part of our future competitiveness.”
How important is R&D in FLSmidth’s operations? Why does FLSmidth put so much focus on R&D?
“R&D is extremely important for FLSmidth and we have made R&D a top priority, putting the most relevant customer needs at the centre of our strategy. This approach has proved enormously successful in supporting the business.
FLSmidth and other European companies have to invest heavily in R&D in order to be able to stay ahead of our competitors in the low cost countries. It means that our products need to be more environment-friendly, of a better quality and have a higher output or lower costs compared to those of our competitors.
Furthermore, a strong focus on R&D proves strategic for retaining and attracting the best possible employees. Our R&D activities and the support for these through the financing from NIB play a significant role in strengthening our environmental profile and thereby help us in the competition for the best talent.”
How do you explain the market demand for more energy efficiency and environmental thinking in production processes?
“All over the globe—regardless of region—we see increasing customer demand for equipment with a higher environment-friendly profile. Driven by corporate social responsibility and legislation, we and our customers want to stay ahead of new environmental legislation. This desire also drives part of the technical development. Optimising energy efficiency is about more than just environmental friendliness; it’s also good business.”
How do you see your company’s place in the new product market in the minerals and cement industries?
“We believe that our product portfolio is second to none and that we can stay ahead of competition as one of the leading suppliers in both the cement and minerals industries. The NIB loan is a crucial part of securing our leading position through intensive R&D.
Having Nordic roots and a Nordic business culture, dating back more than 130 years, gives us a very strong foundation for doing business all over the globe. We believe that a solid reputation and strong technical foundation born out of the Nordic cultural mind-set gives us the opportunity to be agile and open-minded towards other cultures and ways of doing business, thereby securing us a competitive edge, especially in emerging markets.”
Why did you decide to work with NIB? What value does it add to the project or the company’s operations?
“FLSmidth and NIB have done business for many years and we see no reasons for not prolonging that partnership—it gives us the necessary long-term stability needed to conduct substantial and ground-breaking R&D. We greatly appreciate that NIB is able to fund part of our R&D programme with long-term funding. Furthermore, NIB has a good understanding of our R&D programme through its technical due-diligence.”