A global leader in metal recycling and
Please introduce yourself.
Tom: My name is Tom Pietschmann and I am a Legal Counsel for the legal department at the Scholz-Group in Essingen. The purpose of our department is to serve as a contact point for the management and for all group companies in regard to all legal matters which may arise. This includes support for any legal aspects related to the Scholz Group's restructuring, general measures on corporate law and the drafting of investment contracts at the subsidiary level. Additionally, we keep an eye on current legislative developments and ensure that all the involved parties are informed as soon as any legal parameters in our field of business have changed.
Since end of 2016, Chiho has come in as the sole shareholder and put forward the “New Scholz Strategy” with relevant restructuring measures. By far, what kind of positives have emerged in Scholz under the new strategy? And what are the major differences between the restructuring this time and those from years ago?
Tom: Here, let us first take a look at the sustainable development of the company's capital. Thanks to a broad array of measures introduced by the new shareholders, the Scholz Group has once again managed to establish a solid financial basis. By executing effective public advertising communications for these measures, we have been able to build trust for the Scholz Group by way of negotiations with the shareholders.
What is evident from the legal perspective is that we are currently dealing with an investor who is actively involved in reshaping the Scholz Group and who is bringing in financial resources as well as know-how. The integration of the Scholz within the Chiho Group is an essential component of the restructuring concept.
We noted that Scholz's business performance has gradually improved since the start of 2017. What do you think was the main driving force?
Tom: Positive trends on the market have, of course, had a major impact on the positive developments at the Scholz Group. However, a company is only able to take advantage of such developments when all of its staff members are fully committed to ongoing business operations. By achieving financial stability at the Scholz Group, trust in the company has grown on the market, a development which staff and employees know how to utilise. Efforts to seek out and take advantage of new opportunities is one aspect which is worth mentioning here.
Do you think the insecurity sentiment of employees from the past has gone or not? Do you think our employees are happy or not with our current improvements that have been achieved?
Tom: Recently I have noticed that the Scholz Group's financial situation is no longer a topic of discussion among the staff. This situation has changed quite a bit since I entered the company in 2015. For me, this has been a clear indication that any concerns about the threat of a pending insolvency have disappeared amount the staff.
In my day-to-day work, I have also noticed that the staff exhibit greater focus. Initially, the questions I received directly from the staff members almost exclusively had to do with the restructuring and, as such, with the past. This was evident in small matters (e.g. about limitation periods for claims). Today, however, the situation is quite different: the legal questions that are asked tend to be oriented to the future rather than to the past and they primarily involve the drafting of contracts with our business partners. In my view, this is a clear indication that our staff members are increasingly focusing on their work and are less concerned with issues related to the restructuring.
Chiho's intention is not to become a financial investor, but is fully committed to be an industrial investor and to further explore the global recycling industry. With the integration with Scholz, Chiho wants to achieve synergy effects. From your point of view, do you feel such intention of Chiho? What benefits do you think Chiho has already brought to Scholz? And what more Chiho can bring? From your point of view, do you think the above mindset of CEG is perceivable or not? What do you think for the past year CEG has brought to Scholz? What else you would envisage for future from CEG to Scholz?
Tom: It is evident that Scholz' integration within Chiho is an essential component and one which will allow for synergy effects to be identified and implemented. The measures which Chiho has so far carried out indicate that we are dealing with a strategic investor and not simply a financial investor. This begins with the intertwining of reporting and decision-making paths among the group companies, extending all of the way up to knowledge exchange at the level of daily business.
One crucial advantage which I experience in my own daily work is that views towards the business partners have changed. The staff were previously well aware of the fact that the name Scholz carries immense weight and enjoys recognition across various industries. Through its connections with Chiho (which is evident in the new corporate identity), Scholz has gained an even greater impact. The company has elevated its status further beyond its previous position as a globally active recycling enterprise from Baden-Württemberg Germany.
Additional advantages that the future will bring have to do with knowledge exchange among individual departments within the company. There is great potential for cooperation in this area to bear more fruit.
There are cultural differences between China and Germany. What do you think of these cultural and behavioral differences? Have you ever felt any cultural differences when interacting with your Chinese colleagues? Do you think those differences are manageable?
Tom: We are all aware of the fact that cultural differences exist. My experience up to now has, however, shown that this has not made itself apparent in the professional context. Training sessions for our staff members have been successful in making them aware of these cultural differences and becoming more sensitive to them.
Of course, we cannot exclude the possibility that these differences will become more apparent through additional integration and that they could present themselves as a problem. But I anticipate that we have the right tools to handle this situation. Particularly important in this regard is ensuring understanding for the respective cultural background on both sides, as well as knowledge about the allocation of roles. The decisive keyword here is communication. Communication is the only way to effectively resolve any cultural tensions that may arise between the Chinese and the German staff, without them ending in conflict.
In what ways do you think we can capitalize on the Group's enhanced strength now?
Tom: The joint appearance of Chiho and Scholz as a single group has the potential to particularly strengthen our position within negotiations. Our enhanced degree of know-how can be applied to create variable and diverse solutions for any issue area. In other words: there is no longer only one Scholz solution or one Chiho solution to specific issues and the group can now act on the basis of an expanded knowledge base.
About our vision, “to be the leader in global recycling business”, do you think you and the team around you share our vision? What could be done in your perspective, from shareholder side and from your scope of responsibility, to push forward the vision?
Tom: I certainly share this feeling in terms of Group Legal. All of us (Dr. Matthias Weiss, Head of Group Legal, Martin Krissmer, Legal Counsel, and myself) are constantly striving to further optimise our processes and, through this, to generate optimum benefit for the group.
Are you confident in the Group's future? Are you confident in the recycling business?
Tom: From my perspective, the recycling business keeps gaining in importance. Especially in the future when resources become scarcer and the climate-related developments have to be stopped, humanity will have to rely on modern recycling enterprises. Considering this, it doesn't matter which recycling sector we speak of (e.g. paper, scrap metal) as each one carries immense importance and will become even more so in the future. I therefore have a very high level of confidence in the recycling business itself.
And I share equal confidence in regards to the future of the group. We have the foundation, the size and the knowledge to assume an important position within this highly competitive industry. Even if the number of market players continues to shrink, I am in no way concerned by this. On the contrary, I believe that our group will survive any such developments. With this in mind, it is important for us to successfully implement our stated vision – to be the globe's leading recycling company.