Interview with Carlos Cardoso, President of Kennametal
Kennametal is synonymous with quality in all over the world. This multinational of cutting tools, works closely with precision. And he knows that the only way to help combat this international economic situation to the machining is to offer products clearly aimed to achieve higher degrees of precision and that customers could maximising their production processes. Taking advantage of a visit of Carlos Cardoso, President of Kennametal, Kenci facilities in Rubí Barcelona town last May 12, Interempresas Metal wanted learn more about the success of this multinational, how faces this situation of recession and its objectives in the medium and long term.
Some believe that our industry is growing slowly in Europe. What is your opinion?
Globally, to look at our business, certain sectors of market and regions have begun to strengthen more quickly than others. While there are some signs of improvement in the global economy in general, it is still difficult to predict with certainty the moment, the magnitude and the duration of a sustainable recovery, however, Kennametal is positioned to capitalize on improving as reinforcement. We are encouraged that the growth of the industrial activity continues across a range of end markets and geographies.
Carlos Cardoso, President of Kennametal.
What to expect in 2010?
We are optimistic that the economy will continue its gradual recovery and have confidence that we are positioned to take advantage of the markets in the recovery. Our talented workforce worldwide remains focused on serving our clients with products and excellent services. Kennametal aims to continue balancing geographically their business, with the aim of generating income equally in thirds, North America, Western Europe and key economies of rapid growth in the rest of the world. In addition, Kennametal was endeavouring to introduce products to the rhythm of leader in marketing as well as continue to operate under the disciplined approach of its operating management model, the system of business value of Kennametal (KVBS, for its acronym in English).
How is doing front Kennametal to this very difficult global crisis?
There is no doubt that the last 18 months have been the most difficult in more than 70 years of history of Kennametal, however, Kennametal stands as a strong company positioned for future growth. The company responded aggressively to the severe and rapid global economic slowdown through the adoption of a series of measures such as reducing costs, optimizing cash flow and liquidity and preservation of their competitive strengths. Some of the measures were difficult because they affect people, but the global team has continued combining efforts to help weather the tough economic situation. As a result, Kennametal offset a substantial portion of the impact of the decrease in the volume of sales, gained a modest profit in the fiscal year 2009 on an adjusted basis, generated a cash flow strong and further strengthened its financial position. We recently announced our financial results for the third quarter and we are pleased to report that it is our third consecutive quarter of growth. The company has infrastructure around the world, a well balanced business and a dish of great talent around the world dedicated to serving customers.
In our days is to produce faster and more cheaply. As a manufacturer of tools, is this also true in your case?
Kennametal is continually looking for ways to maximize their production processes, however, we make sure that to produce faster and cheaper do not compromise either the quality or safety of our employees. Innovation and productivity are two maxims Kennametal is proud to be able to continually offer to its customers. Kennametal is committed to focus on excellence to customer and engineering solutions customized for the client in order to increase their competitiveness and productivity. The most advanced products are always under development to better serve the needs of the client with almost half of the income of Kennametal products of less than five years old. These new products also offer up to 20% improvement in the productivity of our customers. Kennametal products offer a long life, with an avant-garde quality and greater economy.
Carlos Cardoso visit to the headquarters of Rubí (Barcelona).
As supplier of tools how it responds to this need of its customers?
Manufacturing 'Lean' is a way to streamline our processes in order to transmit a continuous value for the customer. Thinking 'Read' has been used in Kennametal since 1997 and is one of the 6 basic processes in the business value of Kennametal system. In fiscal year 2009, the company reached nearly 141 million dollars in benefits 'Read'. To date, almost 795 employees have 'Lean green belts' certification to help promote the culture 'focused on Lean' and improvements in its processes.
Competition between manufacturers of tools is strong. How is involved in this game which has to strike the right balance between cost of production, price of the tool and quality?
To the client is directed everything we do, so it is no surprise that the productivity of customer focus how this balance. We want to be recognized as one of the major companies focused on the client we offer our promise of exceptional value, growth and productivity for our clients solutions, while providing consistent returns to our shareholders and rewarding careers for our employees.
Is the coating technology the way to provide cutting tools with higher performance?
This is an important way to improve the cutting tools, but it is not even remotely the only. For example, in the design of a tool like the plates of turning ISO coating technology is a key method to improve the lives of tool and the cutting speed. In other types of tools, very often, smart designs are opening up the opportunity to reach a higher yield. The performance can have many meanings and depends on what our customer are looking for in the tool, from the life of tool or cutting speed up to aspects such as the surface quality, dimensional accuracy, process capability, easy to use, formation of chips or, even the noise level.
There is still much to be done on the issue of coatings?
At the moment we are seeing many developments in coating technology and if we include the total field of surface treatment technology, the potential is even greater. As always, we are focusing on research, development and innovation efforts to develop solutions that will increase the productivity of our customers and provide a competitive advantage to their processes. Our technology team is committed to provide leading developments in the market, innovations and customized systems that will increase the competitiveness of our customers. We have established to introduce new products at a rate of leader with more than 40% of the revenue from new products with less than 5 years old each year. Our aim is to work with our clients in their specific challenges in these areas and make technological updates today to the tools of tomorrow in order to maintain this advantage.
There is still something to invent in geometries (to reduce shear forces, save energy, improve chip control and provide more cutting edges per insert)?
We file many patents related geometries to each year. Obviously this is intellectual property and we may not disclose details, however, looking ahead, there are many examples that have already been introduced in the market that show that there is always the possibility of inventing new solutions. One of our strategies is the introduction of new products with a leading pace on the market and our goal is to have 40% of sales from new products of less than 5 years old.
How do it respond to the trend of the machines to offer "machining full"?
As a supplier of complete solutions, Kennametal offers a broad portfolio of tools from systems of mooring to platforms of tools for operations of turning, slotted, milling, drilling, threading and bore. We offer our customers complete solutions from the beginning to the end of its process of machining.
This year marks its 25th anniversary in Spain. In addition to an event in itself, how important is for your customers? How is benefit from this experience?
The fact that we are celebrating our 25th anniversary in Spain It shows that we are committed to service to our customers in this territory. We work closely with them to meet their needs and we hope to continue to do so in the next 25 years and even more. Kennametal as a company has been working more than 70 years with what our customers can benefit from our extensive experience and expertise that I have gained during this time through numerous markets around the world.
Do you assess the results of the company in 2009?
Like many companies, the fiscal year 2009 was a demanding year for Kennametal due to economic crisis world record. Extremely difficult conditions, however, the company clearly demonstrated its stability and strengths. These include its basic strategies, operational process management (KVBS), diverse and dedicated global team and a well-balanced business portfolio of high-performance operating in increasingly diverse end markets. Also includes a solid portfolio of innovative products, strong relationships with clients and a culture focused on 'Lean' (optimisation of processes). These qualities has maintained Kennametal during a crucial year and it has allowed the company come out reinforced and agile with a solid business Foundation - a company that is well positioned to deliver better results, not only today, but also in the coming years.
Kennametal recently announced its earnings for the third quarter of the fiscal year the fiscal year 2010 and presented a sales growth for third consecutive quarter. We are encouraged that the growth of the industrial activity continues across a range of end markets and geographic areas.
