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HTT · Heat Treat Radio #90: Slawomir Wozniak, CEO, SECO/WARWICK SA

The following transcript has been edited for your reading enjoyment.

Doug Glenn: The last time we spoke in an interview was in 2019. We were in Germany at Thermprocess, and you were just getting into the CEO position. We’re coming up on 4 years. How has it been? For you personally and for the company?

Slawomir Wozniak: A good question. Yes, it was a very nice time.

I was not expecting so many challenges, especially since I took over in 2019, in June. We started to work on a new strategy for the company, for the group, and then Covid came. That changed everything. We had to implement a lot of changes to the company and cope with the challenges. It was a good time, absolutely. Many positive things happened to the company, and we grew up with the business.

We reorganized our companies successfully, especially in China and in the U.S. I have had a great, supportive team ever since I started with the company for more than twenty years. I know all the people very well, and they cooperate and support me every day. It was a very good time for me, and I’m looking forward to another couple of years running the business.

Doug Glenn: Compared to 2020, will this year be a normal year?

Slawomir Wozniak: It looks like it. We still feel, however, the impact of the war in Ukraine and the supply chain deterioration caused by both COVID and the war in Europe. We also reorganized the way we do things in the company.

But you’re right, the business is good today. Although we see some recession on the horizon, this year is extremely good. It’s extremely good in the U.S. but also in Asia and Europe. Pretty much all the markets are growing.

New products were implemented on the market in the last couple of years, so we see a good future.

Doug Glenn: Tell us a little about the 60^th anniversary coming up.

Slawomir Wozniak: There is an anniversary coming for RETECH. The company was established in 1963, so next year (2023) we would like to celebrate the 60^th anniversary in Buffalo, NY. This is something which energizes the U.S. market.

We would also like to highlight our footprint on the U.S. market because we have three companies. We have RETECH, SECO/VACUUM Technologies, and SECO/WARWICK Corporation. We like to see the companies working together, and we see a big interest from U.S. customers to get equipment made in America. RETECH produces vacuumatological equipment (vacuum melting equipment) in the United States. We would also like to build vacuum furnaces in the U.S. SECO/WARWICK Corporation has been in business for many years, and we would like to continue with production of atmospheric furnaces and aluminum process furnaces. We are also thinking about aluminum brazing equipment we build in U.S.

Doug Glenn: I want to talk about SECO/WARWICK group and strategies. I know you manufacture equipment, but the emphasis has always been on technology.

What can our readers be looking forward to in terms of technology?

Slawomir Wozniak: We are a typical technology, an engineering company which provides technological solutions for our customers. We not only provide equipment, but we provide complete solutions for our customers.

What we see on the market is a deep interest in what we call “green technologies.” These are all the technologies that are in line with reducing the carbon footprint. Our technologies can provide solutions for our customers, like low pressure carburizing (LPC), zero-flow nitriding, and all the other technologies which also reduce the time for the process and energy consumption. We see a big boom because the carbon footprint needs to be reported by our customers.

We have to provide a report of what the carbon footprint generated during production of our equipment was. We also must provide a report of what the equipment would produce during a process. We have some solutions which significantly reduce the emission of carbon dioxide. This is what our customers are looking for.

We see a big interest in conversion of heating systems from gas to electric. Customers can buy green electrical energy, but they cannot buy the “green gas” right?

Doug Glenn: Not unless you do hydrogen which isn’t quite ready yet.

Slawomir Wozniak: Right. All these technologies are very much in the interest of our customers. So, this is why we are forcing also, the new development of our solutions to replace all technologies like gas carburizing by low pressure carburizing. This is what we see on the horizon.

Car manufacturers are declaring that by 2035 they will not be producing any more combustion engines in cars. We have a great product for brazing of battery coolers for electrical vehicles, an aluminum brazing process. This equipment is produced in Europe and in China, and we provide the solutions for global OEMs. Also, we see booming technology. With the growth of immobility we also see a growth of our business.

Doug Glenn: Have you seen much of the growth in the green movement? Have you seen it as much in North America as you’re seeing in other regions of the world?

Slawomir Wozniak: We see some interest from the customers. It is not as big as it is in Europe. With the global supply chain, even our U.S. customers, when they produce certain components, they also need to be in line with the global strategy. The end-user is the user of the components which are heat treated in our equipment. The end-user will ask for the certification of the carbon footprint. This is why it is still not on the level as we see in Europe, but we see more and more customers/companies asking for green solutions because they need to also be in line with the trend.

Doug Glenn: It seems the North American market tends to be a little slow on the uptake on these green things.

What light can you shed on the plans for SECO group in North America over the next five/ten years?

Slawomir Wozniak: This is the right time because we are working on the strategy now for the entire group, particularly for the U.S. market. We have three companies in the U.S., and we would like to build more equipment. This is in line with the interest of our customers.

[blocktext align="left"]There is a trend of reshoring and moving business back to North America, particularly to the U.S., but also to Mexico, to better serve the market and provide quicker solutions. We would like to build more equipment in the U.S. A lot of businesses are moving their production from southeast Asia (particularly from China) back to the U.S.[/blocktext]

We can provide the solutions to help our customers to run the day-to-day productions in a cost-effective way with these green technologies, but also with technologies which can reduce the cost of the production, the cost of heat treatment processes, and metallurgical processes. This is why we would like to build more equipment here.

RETECH, our company which provides metallurgical vacuumatology solutions, is very busy with the new locations. We have a lot of projects which are fully made in the U.S. We are now analyzing how to cope with the challenge of the U.S. market to build vacuum furnaces in the U.S.

Today, we only import vacuum furnaces from Poland. In Europe, in general, the lead time of some components is growing. Energy and labor costs are also growing, so we’d like to build vacuum furnaces also in the U.S. to better serve our customers. This would be the main focus for the next few years — to reinforce our operation processes here in the U.S. and also to organize how to serve the U.S. market by local manufacturing.

Doug Glenn: I think it would be helpful to delineate the three companies that you’re talking about, the North American companies.

Slawomir Wozniak:  RETECH. We moved from California to Buffalo, NY, roughly three years ago. We have a nice facility. We are quite busy there with production and assembly of vacuumatological equipment.

Doug Glenn: Which is, basically, vacuum melting equipment.

Slawomir Wozniak: Right. Things like plasma equipment, electron beam equipment. We would like to even look for more space because we have so many projects. We still have our office in California, because we still have some good employees who contribute to the performance of the company. We would like to maintain this office in California.

With SECO/VACUUM Technologies, LLC, we would like to start building equipment for the North American market. We have a new setup, a new office, and a new facility with some floorspace where we can assemble the furnaces. We would like to start from assembly and eventually, double up the processes and completely build the equipment here in the U.S.

SECO/WARWICK Corporation — we just hired a new managing director in June of this year, Marcus Lord. His main focus is to grow our business in the U.S. particularly for our aluminum process equipment and also for thermal equipment.

Our goal is to build equipment in the U.S., maybe not in-house fabrication, but use our subcontractors, and then to do the assembly in the facility. We are also looking forward to set up a facility in the U.S.

Doug Glenn: RETECH has moved manufacturing to Buffalo, NY. SECO/VACUUM Technologies is still located in Meadville, Pennsylvania, but not in the previous building. They do have some manufacturing capabilities, although there is not really any manufacturing going on there except for spare parts, I assume.

Slawomir Wozniak: Spare parts and retrofits.

Doug Glenn: The last company was SECO/WARWICK Corporation, which is big in aluminum and general line thermal equipment.

Slawomir Wozniak: We would like to continue with this business and build equipment in the U.S.

Doug Glenn: That gives us a sense of the direction over the next five years or so.

Poland (your headquarters’ location) has been in the news quite a bit because of the war between Russia and Ukraine. How has that impacted your company and maybe individuals in your company. Has it impacted your ability to manufacture in Poland?

Slawomir Wozniak: It was a big shock for everyone at the end of February of 2022 when the invasion of Russia happened to Ukraine. For our company, the main heat was linked with the supply chain of some materials, especially commodities like steel, which were supplied for many, many years from either Ukraine or Russia.

Then, the prices of energy, like gas and electricity, also increased significantly. We also had some businesses in Russia; we have a SECO/WARWICK company in Russia to provide services and sales, but we stopped, pretty much, all activities there. We have just completed all the contracts, and we are not promoting our equipment there. We are not providing any quotes to Russian customers; we stopped our activities there.

It was not a big impact on our business because the volume of the business in Russia was not so big.

However, since the war started, we have realized that a lot of customers linked Poland with Ukraine as a country which is very close and, anytime, can be in the conflict.

So, many customers were worried about the situation, and they started to ask us, “Is our project safe? Can you still deliver our project?” So, we had to guarantee and confirm, “Okay, everything is fine. We can run the projects.”

There was a time, especially in the second quarter, when the delivery time of some materials were extended because of the situation. It has improved, and today we do not see much impact on it. Obviously, from the job market perspective, it was also significant, in part, because many migrants moved from Ukraine to Poland.

Doug Glenn: I think Poland was the number one country to receive immigrants.

Slawomir Wozniak: Exactly. We organized a lot of support, as a company and as individuals, with private activity to support the Ukrainian immigrants.

From our side, we have seen some shock and some impact on our from the other side. A lot of companies also started to think differently. For them, it was the first shock three years ago that impacted the global supply chain — many, many materials and then goods. This war was a second wave of impact on the businesses. We see that some companies decided to move their businesses to change their supply chain and, I can say, we even benefited from that because we see some growing business because of the situation.

In the end, I would not say the war is a good thing, obviously, but it is also positive thing for businesses.

We also have some solutions for the defense industry. We see growing interest — not only in Europe, but globally — in investment in capital equipment for increasing the production of some defense equipment.

Doug Glenn: Over your first four years in office, as the CEO, you’ve had to deal with the pandemic and you’ve had the war breaking out. I know there are some other issues, such as labor shortages and supply chain issues.

What is keeping you up at night worrying? As you’re looking forward, what are the things you’re concerned about?

Slawomir Wozniak: One, you just mentioned, about the labor market. We know that the demographic factors are very, very bad for many, many countries, including China. Today, it’s okay, but if you look long-term, the demographic doesn’t look good. We are focusing, now, on how to replace the human factor by automation, how to simplify the processes, how to implement the solutions which don’t require a lot of labor. So, automation is one thing and simplification of some processes, standardization of some solutions. We’ve focused on vacuum equipment especially. How can we reduce the manpower required to build the furnaces?

The second area is definitely the geopolitical situation, especially the tensions on the line between the U.S. and China. We have a lot of businesses in China, today. We also export from China, and to other countries. This is something which we have to look very carefully at how to recoup and handle if there were escalation from sanctions or limitations on the business and possibly to export our equipment.

[blockquote author="" style="1"]This is why we would like to focus more, in coming years, on the Indian market. We would like to set up production capacity in India to produce more equipment. Then, particularly how we can serve the Indian market which is growing. We see a lot of potential in India, but also later to use our capacity there to export some equipment to serve other markets. This is our focus for the next few years.[/blockquote]

I think the geopolitical situation is the thing which is out of our control, for everybody. Even the job market, as I said, we can cope some. How? We can attract our employees, and we can attract potential employees to join our company. With the geopolitical situation, we can do nothing.

Doug Glenn: We’re at the mercy of the leaders, which is always a scary thing.

You’ve talked a lot about green technologies. Is it safe for us to say that SECO is still in the business of the more conventional gas-fired type equipment around the globe? Or are you moving away from that?

Slawomir Wozniak: We do less and less gas-fired equipment. Gas-fired equipment was, in general, an atmospheric type of equipment. We changed the strategy for this product line. We have just narrowed our portfolio to a few types of equipment only. For some solutions, obviously, we still offer gas-fired heating systems, but we see more and more interest in using electrical heating systems. There are some developmental projects to use the combination of hydrogen and natural gas. This is the direction which we see from supplies of heating systems partners, and our customers are looking to get solutions which we call “the green solutions.”

I would say that, in the long term, we will not provide combustion systems in the equipment, but, currently, we still have them in our portfolio. I don’t really see that this will maintain for a long time, especially, as I said, since we changed our strategy for general products and for thermal product line. We do not use many of the solutions for combustion processes.

Doug Glenn: Here in the U.S., you are going to transition many non-vacuum lines from gas to electric?

Slawomir Wozniak:  Yes. But, for some solutions, you cannot. We must have combustion and we obviously offer melting equipment and also some processing products. But we are very flexible and we can offer various solutions for our customers. We always try to adjust our proposal to the customer specifications and customer expectations.

Doug Glenn: It is probably safe to say that, within the next 5–10 years, you’re still going to be doing some combustion-related stuff, especially in North America. It’s going to be demanded. As most of the rest of the world knows, we’ve got relatively cheap energy.

Slawomir Wozniak: Less definitely than Europe, especially with the current situation with the supply of natural gas.

Doug Glenn: Alright, last question: You’re obviously enjoying your work. You enjoy your team. The company is doing well. What excites you, personally, about the next 2, 3, 4 years at SECO/WARWICK?

Slawomir Wozniak: As I said, I have a great team which supports me every day in all of the challenges that we are facing, like every company. I love my job. I’ve bonded with the company. I grew up with the company. I would like to see the company develop and grow with new technologies, with market requests and new solutions.

We have great R&D teams — one in U.S., one in Poland — and we work on new solutions. I see that we can change a lot of industries with our solutions. This keeps me really energized every day, to discuss  new technologies, new solutions, and how we can impact the development of various industries like aerospace, the energy sector, and the automotive industry. I’m proud to see some cars with our components.

Doug Glenn: It keeps you energized!

It’s good to enjoy your work, and it’s good to have passion for the future. I think that trickles down to your organization; you certainly have.

About the expert: Slawomir Wozniak started his professional career at SECO/WARWICK in 1994 initially as a service engineer and then as a deputy manager of CAB. Later he was posted to SECO/WARWICK Retech in China before an appointment of managing director at SECO/WARWICK Allied in India and chief operating officer of SECO/WARWICK Group. Later he was appointed managing director (Asia) and member of the management board at SECO/WARWICK SA. In 2018 he became vice president of the SECO/WARWICK SA Management Board, chief operating officer of the SECO/WARWICK Group, and he is the current president of the SECO/WARWICK Group.

Doug Glenn
Publisher
Heat Treat Today

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