Castolin Eutectic – A Sustainable Century

With over a hundred years’ experience making businesses more sustainable, Castolin Eutectic is well ahead of the curve.

Castolin Eutectic has a long history that goes back to its origins as a family enterprise established in Switzerland. Even from those early days, the young company was in the business of sustainability.

“We are in the business of industrial sustainability. We make parts last longer, maximizing their useful life.  For example, look at the bucket of an excavator,” explains Patrick Fetzer, President and CEO of Castolin Eutectic. “It has edges and teeth, and after a couple of months the edges are dull and the teeth are gone. What our founder did was figure out how to repair this with welding materials to build the material back avoiding the replacement of the bucket.”

Building Back Better

What makes Castolin Eutectic special is that it didn’t just replace like-for-like, but actually improved the equipment service life.

“What he did was not build it back identically but build it back a lot more wear-resistant to outlive a new component,” Fetzer says.  “The business idea is to go to an operator and say‚ ‘I can repair your bucket for twenty per cent of the cost of a new one and it will last five times longer than a new bucket would last’. The business case behind this is strong and is at the core of what our company is built on.”

Castolin Eutectic’s process starts with looking at the material the customer’s equipment is built from, and what wear phenomena it has to withstand. This can include a number of environmental factors such as erosion, corrosion, chemicals, impact and heat. Then Castolin Eutectic’s engineers work out how they can reinforce the base material to make it more durable.

“This principle has been taken into a wide range of industries,” Fetzer tells us. “We’ve worked with the cement industry, iron and steel, oil and gas, power generation, agriculture, construction equipment, mining, pulp and paper, sugar, all the big heavy industries.  We‘ve developed and grown the company into a global business, going out into other countries, opening up new subsidiaries. We serve now over 40,000 customers in more than 140 countries.”

Castolin Eutectic’s way of working cuts down on materials, costs, and waste, long before it was fashionable to do so.

 Sustainability is at the core of what we do,” Fetzer insists. “For a lot of companies sustainability is an after-thought.  They’ll reduce waste or get green electricity and call it a day.  We have been pioneering industrial sustainability, helping businesses use fewer resources and make industrial machines and equipment last longer, for over a hundred years.”

Standing on its Own Feet

Over the course of that hundred years, Castolin Eutectic itself has undergone many changes, in terms of ownership and culture. Fetzer joined the company to help shepherd the latest development.

“The company was founded by the Wasserman family in Lausanne, Switzerland, and then has grown into a global company with subsidiaries and distributors all over the world,” Fetzer recalls. “The family eventually sold to a German industrial family who ran it as part of their organisation.  Since the first of July 2020, Paragon Partners, one of the leading, independent private equity firms in Europe, acquired Castolin Eutectic. My task and challenge when I joined last October, was to carve this company out, make it a stand-alone international company, and grow it into a successful future.”

Fetzer is keen to give credit to his excellent team for how well the company has pulled through the process.

We’ve got a great set of people around the world, consolidating the business in about 40 countries. Since I cannot manage 40 companies by myself, I put a new regional structure in place,” Fetzer says. “I as well expanded the leadership team to put the right governance in place and built the basic framework running the company now through 6 Regions.”

A significant part of the challenge – and therefore opportunity to improve – facing Fetzer and his team is that Castolin Eutectic had no central coordination.

“There were no central operations. Some of the businesses had their own factories, others did not, and there was no central planning, warehousing or sourcing.  So a big part of getting this optimized was on the new operations team,” Fetzer says. “Now we’re continuing to grow and make the business a lot more profitable. In all of this, we want to do much more and do it better.”

Of course, part of Fetzer’s pride comes out of the very hands-on effort he put into bringing that team together.

“For the first two-and-a-half months, I spent probably half of my time recruiting. I had to put a whole senior management team in place.  I knew what I needed and was looking for.  I looked through hundreds of CVs, finding the right people to do the major heavy lifting we’ve got to do here,” Fetzer says. “I was especially looking at bringing in experts from other industries who know what state-of-the-art looks like and will bring best practices with them. That’s how I went about it.  I’ve got a great team together now, and I’m working on taking it to the next level.”

Part of that next level is taking a fresh, much deeper look at the service the company provides.

“We are focusing a lot more on service. The company has grown out of consumables in welding, brazing, and coating, but the core of the business is in application engineering,” Fetzer explains. “We have about 600 salespeople in application engineering, selling wear protection solutions. The way they’re pushing forward is not just selling welding electrodes and wires but visiting customers on-site, analyzing the wear damage, coming up with refurbishment solutions and executing the work on time, providing real value to the customers.”

The next phase for Castolin Eutectic is something Fetzer is clearly extremely excited about.

From the start, I said we need to invest to put the basics in place and get the company well structured, and we are working on that right now before we can really go hard into growth,” he says. “If you don’t have the right structure and operating synergies and you grow, it means you’re multiplying the problems internally. During the first two years, we focussed on building the basics and now that the industry is recovering after Covid, so we are starting to push for organic and inorganic growth.”

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