ERIKS is a specialised industrial service provider. A wide range of technical products, co-engineering and customisation solutions, and related services helps customers to improve product performance and reduce total cost of ownership.
With a presence in Western Europe, North America and Asia, ERIKS serves customers in their original equipment manufacturing (OEM) and maintenance, repair and overhaul operations (MRO) across a wide variety of industrial segments.
The company’s major strength lies in technical know-how. Over the years, ERIKS has developed a far-reaching expertise in areas as diverse as sealing & polymer, gaskets, valves & instrumentation, industrial & hydraulic hoses, industrial plastics, power transmission & bearings, conveying systems and tools, and maintenance & safety products.
In addition ERIKS is supporting customers to become more sustainable. ERIKS is in the position to find sustainable solutions for the industrial domain, as it specialises in making industrial processes more efficient and less wasteful.
In the course of the year, led by the new CEO Stepan Breedveld, a long-term strategic improvement program was announced aimed to further enhance customer satisfaction, strengthen the business in specific areas and improve profitability.
A large restructuring took place to protect the company against profit decline, which unfortunately resulted in the loss of over 700 jobs. Several plans were developed to remain productive in a time of lockdowns and remote working, enabling teams to maintain good levels of customer service. Opportunities were also taken to diversify several areas of the business into promising new customer segments.
The COVID-19 pandemic severely impacted the economic environment in ERIKS’ active markets. Industrial production in many segments suffered as a result of lockdown measures, particularly in the automotive, maritime, machine construction and all oil & gas related industries. At the same time, the food & beverage, chemical, and semiconductor industries continued to perform well depending on the circumstances in various countries. Global lockdowns and COVID-19 prevention measures severely cut fuel demand, causing commodity prices to fall to unsustainable levels.
To safeguard customer support in the face of COVID-19 restrictions, action was taken in all countries at an early stage of the pandemic. A global Project Management Office (PMO) was established to coordinate the response to these challenges, with the health and safety of colleagues as its first priority.
During the year, ERIKS has enhanced efficiency by further centralising and upgrading distribution. In Germany, a new Central Distribution Centre will serve customers throughout Europe and represents one of the organisation’s largest and most modern facilities. In the UK, ERIKS began preparations for a new Central Fulfilment Centre in the West Midlands. The new building will increase capacity to fulfil more customer orders more quickly, more accurately, and ultimately, more efficiently.
ERIKS UK & Ireland expanded with the acquisition of sites in Cardiff and Derby dedicated to the design, manufacture, installation, refurbishment, servicing, and repairs of electric motors, gearboxes, pumps, and associated equipment. In contrast, the firm divested its downstream CNC Flow Control business in the US to increase focus on core activities.
ERIKS incorporates a dedicated innovation team which maps the development of projects in all countries. An official ‘Innovation Thesis’ has been created to serve as the guideline for new projects, with a focus on digital communication, data insights, new services, and business models.
ERIKS Digital is responsible for developing scalable digital solutions and enhancing e-commerce. Online buying is a growing trend in the industrial market and ERIKS aims to become a frontrunner in the area. The Wiki platform, an internal search engine, was launched and widely adopted across several European countries, instantly improving the efficiency of the internal sales organisation. ERIKS Digital also continued to develop tools that enable Smart Asset Management, providing customers with more control over their equipment through smart sensoring.
The dedicated Data & Analytics team, meanwhile, made good progress in collecting, harmonising, and disclosing data and helping internal users to make their processes more efficient.
The environment remains a priority, with ERIKS challenging itself to become more sustainable. Targets are set in line the United Nations Sustainable Development Goals. ERIKS has already become carbon neutral in the Netherlands, one of its largest markets, and is consistently reducing energy use in other countries.
ERIKS commits to acting with integrity and in adherence with the law. A strong ethics and compliance framework actively supports stakeholders, with a Code of Conduct for Business Partners released in 2020. A number of employee-focused initiatives were taken to promote ethics and compliance in the context of business risks and needs and provide local teams with access to relevant information, tools and training. To ‘measure, monitor and maintain’ will remain priorities in the years to come.
Safety remains of paramount importance. Improving safety represents an ongoing effort and a key responsibility for everyone. A company-wide safety campaign plays a central role in changing behaviour and enhancing awareness. Health and safety leadership was also brought into focus during the year and included training managers and supervisors to maintain a safe environment in which employees feel free to raise safety concerns at any time and without any consequences.
The year saw a continued investment in people and the further professionalisation of the HR process. ERIKS believes that constant development and increased diversity are essential to high performance, and a new learning and development structure was established to support all employees in this area – not just senior management and talent.
In addition, a number of initiatives were taken to make ERIKS a more diverse company, such as the re-evaluation of the recruitment process and a review of job descriptions to ensure gender neutrality. Training was provided on relevant topics such as gender bias. These efforts resulted in more women occupying management positions in line with targets, plus an increased awareness around the topic.
In 2019, management had already started to implement strict cost measures and large-scale restructuring to face a more challenging business environment. The pandemic reduced sales even further, as factories closed and maintenance was put on hold, mainly in Europe. 2020 also saw a significant drop in demand from the US oil & gas industry. Restructuring costs related to previous cost-saving initiatives impacted results further still. A new round of cost cutting programs was introduced to manage the impact on operational performance, but these could not fully compensate for the fall in sales.
Long-term strategic improvement
Focus on digital solutions