“Entrepreneurs are becoming more curious during the crisis”

High energy prices are also causing tension in the plant engineering sector. Many companies are looking ahead with concern. But is there anything positive to be gained from the situation? In an interview with heat processing, Jörn Ludewig, Managing Director of Jasper GmbH, explains the role the gas shortage plays in the industry, how his company is strategically positioned, and how crises can be seen as opportunities.

How are your customers reacting to the current situation on the gas market?

Jörn Ludewig: The gas market and the sharp rise in prices are major concerns for all our customers. This affects not only the energy-intensive aluminium industry, where we have many customers, but all consumers using thermal processes. Many customers ask us whether this situation brings only disadvantages or whether it also offers new opportunities. In fact, there is still considerable potential in Europe and in Germany to modernise plants. This applies in particular to energy efficiency. Our plant systems enable energy savings of between 30 and 50 per cent on average, which translates to a significant reduction in natural gas consumption. If the gas supply from the east is further reduced, many believe this will be a disadvantage. But over the coming months and years, it could also prove to be an advantage, particularly for the environment, as companies are now paying close attention to energy saving. This would also mean that companies which should have modernised their plants long ago are now doing so.

Could you give us an example of that?

We have recently accelerated order processing in the automotive industry. In practice, this means that orders are placed very quickly in order to implement changes to existing plant systems within a short period of time. This does not always involve new systems, but often older ones. We have been urging customers for many years to modernise. Many were hesitant until recently; now the modernisation business has really taken off.

Do you also notice this in the current order situation?

Yes. Some customers are very uncertain and don’t know what to do – whether they will cancel orders, for example. This is particularly true of small companies because they are unsure of their options. Larger customers are allowing existing orders to proceed. Essentially, it can be said that there are no restrictions on our business – on the contrary, investment is continuing. We haven’t noticed that ‘long-runners’ – projects lasting a year or more – are being halted. Instead, things are continuing to move forward.

What is the current role of electric heating in industrial furnaces?

Our customers are looking for alternative energy sources. Twenty years ago, we faced a similar situation with oil-fired processes. The oil burners required for these were gradually replaced and eventually phased out in Germany. Companies converted oil-fired plants that were still in operation to run on gas. Electric heating was not available as an alternative at that time.

And what is the situation today?

In recent months, the situation has changed. The questions are: Can we convert our plants to oil heating? Can we heat industrial furnaces electrically? These are the basics of the current discussion. In addition, there are hybrid solutions. A great deal is possible because, technically speaking, many plant systems can be split.

How might hybrid solutions work in practice?

Take, for example, a furnace system with a high power input that requires only a small power input for the ‘keep warm’ function. When keeping warm, it is simply a matter of compensating for heat losses. Suddenly, hybrid heating becomes a very attractive option. Melting sections with a high power input – using burners of, for example, 5 MW or more – remain gas-fired, whilst smaller sections, such as those of 350 kW, where only losses are compensated for, are powered by electricity. Green electricity can be used for this purpose. The entire plant is therefore effectively divided into a gas-fired and an electrically fired section. The next step would then be to use hydrogen in gas-fired plants. The topic of hydrogen will become increasingly relevant.

What role does hydrogen play for you today?

For us as plant manufacturers, the topic of hydrogen needs to be considered on a customer-specific basis. If our customers want us to, we can build hydrogen plants tomorrow. The questions we always ask are: Where does the hydrogen come from? How will it be transported? What quantities must be made available to operate the plants? Using hydrogen in high-temperature burner technology is not a technical problem for us. There will be a steady increase in the blending of hydrogen into natural gas. But I don’t think we’ll see 100 per cent hydrogen being introduced into the gas network any time soon. However, I could envisage, for example, 20 to 50 per cent hydrogen being used as an additive. We are already able to equip or design new plants for this purpose.

Will there be parallel use of different energy sources?

I think that will be the case. The importance of electric heating will increase. But natural gas will also continue to play an important role. And we will see a higher proportion of hydrogen blended into the natural gas grid – at least over the next few years. I don’t see us moving away from natural gas entirely in industrial settings.

Do you think that the industrial use of natural gas could be replaced by hydrogen in the future?

It’s hard to say. If ways can be found to transport hydrogen or make it available in sufficient quantities, natural gas consumption will probably be steadily reduced. However, I don’t see it reaching zero by 2035. As many companies are working in this field, I think the transition to hydrogen will accelerate. But it will take at least another ten years before we can switch the supply over or rely on hydrogen on a large scale. Furthermore, given the importance of green energy, there will be significant changes in the power and energy market.

Jasper has a healthy order book. You are expanding your site in Quickborn. Can you briefly explain where this is taking you?

Let me put it this way: we have learnt that vertical integration in plant engineering is important for Jasper. That is why we want to strengthen our site by increasing our vertical range of manufacture. If we want to build a high-quality product, we need to be able to inspect parts on site wherever possible. This will make us faster. We expect a great deal from this, at least for the European market. If we look to China, America or Africa, things will certainly be different. Transport costs are now incredibly high. Prices for containers and freight rates have literally gone through the roof in recent months. That’s why we’re looking for local solutions in those markets.

From which regions of the world do you receive the most orders?

In recent years, we have been very active in Germany. Now we are once again receiving many orders from other European countries. Furthermore, there have been fewer orders from the Chinese market recently, but we are slowly starting to receive enquiries from there again. I would describe this as a wave-like pattern: We are moving from the domestic and European markets back to the international market. This trend generally follows a five-year cycle.

You have also been offering galvanising lines for three years now. How has this area developed?

The galvanising market is very interesting for us. We have noticed that there is less expertise in energy-efficient burner technology within this industry. This means that plants are very basic and few are operated using regenerative technology. Due to the high investment costs, converting small galvanising plants is rarely profitable. The costs are usually too high for that. However, with large plants, we are seeing this very clearly: the industry’s interest is growing due to market uncertainties. Companies want to save energy and use it wisely, primarily through plant retrofits. Last year, for example, we converted one of the first galvanising boilers, with a capacity of 600 tonnes of liquid zinc, to a regenerative burner system. This is currently the only one of its kind. I think this will now become more established as a pilot plant in the future and spark interest amongst other customers.

What proportion of your turnover comes from the modernisation of old plants?

That depends on the year. I would say that business tends to be split evenly between modernisations and new plants. We don’t just carry out modernisations on kiln plants, but also on casting plant systems. The Jasper company will have been in business for 40 years next year. We are now starting to modernise plant systems that we built 30 to 35 years ago.

Are you currently modernising your own equipment from the 1980s?

Exactly. We are starting to replace or rebuild the plants for which we have the design drawings. This process has begun recently and will grow in the coming years.

What is the role of safety engineering?

The problem with modernisation is safety engineering. It is also the biggest hurdle in approval processes. The things that change the fastest are software and safety requirements. The major advantage here is that once we’ve built the systems, no one knows them better than we do. Drawing on the know-how we’ve gained over the years, we’re able to retrofit many plants. Our focus is always on optimal modernisation tailored to the customer’s needs.

How did your company cope during the COVID-19 pandemic?

What we learnt during this time is that we can hold more meetings online. In the past, our engineers would often be on the road for a day or half a week. That has been significantly streamlined with Zoom or Teams meetings during this period. This has helped us a great deal. You save on travel whilst still reaching the customer quickly. However, online communication does not replace face-to-face contact. But it does replace many short trips in between and saves us time. That’s what we’ve learnt over the past two years. Jasper already had an efficient communication policy in place before. We had three sites that could communicate with one another: Electrical, Metal and Mechanical. But the digitalisation brought about by the coronavirus pandemic has completely accelerated everything across the entire market, and I thought that was very positive for us, despite all the negative effects of the pandemic. It saved us on labour and costs and made us more flexible and faster.

Thank you very much for the interview!