OPI: To start with, what are your plans in terms of expansion and where are you headed geographically? As far as I know, HSM is largely Germany-based at the moment, with a number of subsidiaries in the US and across Europe.
IS: The main objective is to be present in the main European markets, if possible with company-owned organisations. Our most important markets at the moment – where we already have our own sales offices or subsidiaries – are Spain, France and the UK. But we are targeting new markets, including several eastern European countries including Poland, the Czech Republic and Slovakia, as well as southern Europe with Greece, Turkey and Italy. In our opinion, these markets, but also the Asia/Pacific region, are the fastest growing countries and as such are a big focus for us.
HSM has an export rate of 75 per cent. Therefore, the strategic decision as to where to establish new sales bases or subsidiaries depends on the potential of a market and where we believe we can reach a certain turnover volume.
OPI: What progress are you making in the US, one of your established subsidiaries? Which of your products are particularly successful in the US?
IS: We are quite happy with the progress of HSM America. Business is growing fast, we’re gaining more and more market share and the goal for 2006 is to double our turnover in the US.
As far as products are concerned, our mid-range selection of shredders is selling pretty well. We have also started marketing our heavy duty shredders in the country and have already received some substantial orders.
Another important part of our turnover is the government business where we are very successful with our office and the HS Level 6 machines. This success is directly related to the HSM ‘Made in Germany’ production quality – government authorities do have a demand for very high quality standards.
OPI: You’ve stated in the past that HSM aims to become a truly global brand. How does your marketing strategy reflect that goal?
IS: Our marketing strategy is clearly focused on achieving more international brand awareness! We are one of the biggest manufacturers of shredders in Europe already, but HSM – as a traditional OEM supplier – has not always been recognised as a global brand and as an international distributor. This had to be changed and we are now making tremendous progress.
As part of our strategy to move from a ‘mere’ manufacturer to a global distributor, we launched some marketing activities. The ‘HSM inside’ campaign was one of the key ways to creating higher brand awareness. By being unique in style and improving market appearance, for example by signing a platinum partner contract with OPI, we could make substantial steps forward. And we are still increasing our marketing activities.
Another important factor is to always be close to your customers. Service and support for our customers by our salespeople are absolute key. Our salespeople "live" the idea of customer service every day. The results are very close customer relationships and therefore very high customer loyalty.
OPI: An international exhibition platform like Paperworld is of course another great marketing tool and also the perfect place to gain exposure. What is your stance on the Paperworld events, in Frankfurt, China and the US? You obviously have a presence in Germany and the US. Is China an export market for HSM or, if not now, is it likely to be in the future? Did you exhibit at all three events?
KH: Indeed, Paperworld is one of the most important platforms for HSM. And yes, we did exhibit at all three events. In Germany and the US directly, and in China via our distributor, but with the support of our salespeople.
Paperworld in Frankfurt for us is the most important exhibition of all and there was no doubt about exhibiting again this year. Far from it! We increased the space of our booth again and will have a total 3,000 sq ft to present products, and welcome customers and visitors. As far as we’re concerned, it’s the perfect opportunity to get in touch with a large number of existing customers and new leads. In order to increase brand awareness, market presence is a must.
OPI: On a related topic, HSM is sponsoring OPI’s Dealer Group of the Year award at the European Office Products Awards evening which will be held during Paperworld. I assume the existence of dealer groups, their function etc is something that’s close to your heart?
KH: You are right, dealer groups and their dealers are very close to our heart. HSM has always had a very close relationship with dealers and therefore the dealer groups. Both are important sales channels for HSM. We can only be successful if we have this strong relationship with dealers.
On the other hand, HSM prides itself on being a reliable and customer service-oriented supplier for dealers. Based on this long tradition, the importance of this sales channel and the outstanding relationship we have with many dealer groups, HSM wanted to honour these customers and therefore decided to sponsor the OPI award for the Dealer Group of the Year.
OPI: HSM sees itself very much as a manufacturer as well as a distributor of products and strives to move from a technology-driven company to a global market leader and distributor. What’s your philosophy?
IS: Manufacturing products in our own facilities is still the core of our business. But at the same time, we changed our perception of the business. We are no longer just focused on manufacturing goods. We are focused on the customers, their needs and demands.
This is a big difference and it was a big step for HSM to emerge from the role of a manufacturer – solely driven by technological perspectives – into the role of a global distributor that also concentrates extensively on sales, marketing, logistics and customer relationships.
OPI: How far have you come?
IS: Well, we had to rethink our whole organisation and processes. We changed what had to be changed and optimised all internal and external processes. Another important step was to improve and consolidate our marketing efforts. Communication with our partners, with potential clients, with distributors – all these were main issues.
We recently held our second international partner conference in Lisbon, Portugal, where we met more than 50 partners. Such events and the whole idea of networking are relatively new concepts for HSM. Combined with new web-based marketing and communication tools, with an increased presence at international exhibitions, and with a strong personal presence in the markets we operate in, we can make – and have done so already – substantial progress.
Over the past two years, we have increasingly been recognised by customers and significant parts of the OP market as a global distributor. By internalising the idea of true customer service, all the people working at HSM have one goal: customer satisfaction. And our customers do honour these efforts.
OPI: HSM regards OEM production as an essential component of its overall portfolio. Please elaborate.
KH: HSM has been an OEM for several customers for many years and this type of manufacturing has always been a substantial part of our business. It still is. It’s a win/win situation for both parties: the OEM partner receives a high quality product and HSM as a manufacturer obtains higher production and sales volumes. Our continuous interest in OEM production shows and confirms that the technology engineered and produced by us is at the top end of the market.
Aside from the office technology sector, HSM is also able to use its technological know-how and create new solutions in other markets. Using the shredder technology, we developed a new system to crush plastic bottles.
In Germany, for example, nearly all the big supermarket chains are using HSM crushing systems to reduce volume of retained plastic bottles. At the beginning, only a few people were confident that this could be a worthwhile business in the future. It has become big business by now, with thousands of systems to be delivered in the next few months.
OPI: So what is your branding strategy?
KH: We have a very strict branding policy. HSM is our premium brand for the whole range of products. We also have sub brands, like Primo or shredstar, which we use to separate and secure different sales channels.
All brands within the HSM organisation are international registered trademarks to back up our efforts to increase international brand awareness.
OPI: Up until recently, all your manufacturing has been done in Germany, but you now also have a plant in Slovakia. How are things going there?
IS: We are very satisfied with the situation in Slovakia. After some obstacles at the beginning – mainly bureaucratic issues – production is now running pretty well and our people there are very motivated.
Our facility in Slovakia is brand-new, equipped with state-of-the-art machinery with which we are producing simple and low-cost parts – mainly for the baling presses. These parts are then assembled in our factory in Reichenbach (Saxony, Germany). Costs are reasonable low and as we are running these facilities with HSM staff and managers, we can of course be sure that HSM quality standards are adhered to at all times.
OPI: Lastly, I’ve heard about the HSM Academy. What exactly is it, what does it do and for whom, etc?
IS: The HSM Academy is an institution within our organisation that was set up in 2000. It’s essentially a seminar and training centre based in one of our Germany-based facilities (in Frickingen).
The academy is free of charge for HSM partners and staff. It offers, among other things, special product training for salespeople and technical training for service engineers. It also holds seminars for dealers, covering subjects such as data security and regulations. It’s an international programme and in 2005, for example, seminars were held for customers from countries including Germany, Switzerland, Austria, the Netherlands and the UK.