08 Apr Interview with Konstantinos Koukountzos, Managing Director, KLEEMANN Group
KLEEMANN recently celebrated its 40th anniversary, from its first manufacturing facilities in Kilkis it has become a worldwide producer of elevator technology with customers in over 100 countries. In 2022, the company won five awards at the Manufacturing Excellence Awards. To begin, can you give our readers an overview of the company, its success story, and its recent milestones in the last five years?
KLEEMANN has been around for 40 years. The company was founded by my father in 1983 in Greece, when he cooperated with the German company KLEEMANN HUBTECHNIK GmbH, renowned for manufacturing hydraulic elevators. From that cooperation, we obtained the license to use the name, expertise and training to build the first hydraulic elevator factory in Greece. The German company was acquired by a larger conglomerate in the 90s and we were independent after that point. This is why our name has a German heritage.
We are headquartered in Kilkis, in Northern Greece. When the company was founded 40 years ago, we had a production facility of about 1,000 square meters and ten employees. Currently, we employ more than 1,700 people all around the world, with manufacturing facilities in Greece and Serbia as well as in China. Our international sales account for over 90% of our revenue with a sales network in more than 100 countries worldwide. We have our own subsidiaries in strategically important markets, including the United States, where we have our own company in Long Island, Day Elevator & Lift, and also the UK, which is currently our biggest market, generating 20% of our revenue. We have a local presence in Australia, where like in the UK and the USA, we are vertically integrated, meaning that besides the equipment, we also offer a full range of services, including installation, maintenance, modernization, etc. Other key markets in which we have subsidiaries are France, Germany, Romania, and Turkey, amongst others. And, of course, we have a strong presence in the Greek market.
In 2000 we raised capital from the Athens Stock Exchange and invested in expanding our manufacturing facilities in Greece and our international network, as we realized early on that our growth would necessarily be export-driven. To achieve this, we needed to invest in R&D to develop products required by international markets and to increase our manufacturing capacity to produce these products, in addition to the creation of a network of subsidiaries to distribute them around the globe.
2010 was another milestone for us, as we started building our first 60 meter high testing tower in Kilkis, which became the home of our R&D function and where the R&D team could design and test advanced technologies. That really gave the company a significant boost in innovation. About seven years later, we started building our own factory in Kunshan, China, where we built the second testing tower of the company, which is about 100 meters high. We invested over $15 million in a 19,000 sqm area that also includes an office building as well as integrated production facilities and warehouses.
About ten years ago, we started transforming our business model from being exclusively a manufacturing company to complementing it with services. So, in the four key markets, the US, UK, Greece, and Australia, we became a vertically integrated company offering solutions that the customers wanted. As our brand gained worldwide recognition, the demand for large and prestigious projects grew. We realized that customers needed a partner who would be responsible and accountable for the whole project; not just the equipment, but also for the installation, maintenance, and after-sales service.
Our expected sales for 2024 will exceed $250 million. Along with organic growth, our sales have increased through a series of recent acquisitions. Thanks to our presence in key markets throughout the world we expect this number to grow further this year despite the global challenges and the downward trend in the construction business in Europe.
The company’s flagship projects include the Keflavik International Airport in Iceland, the world’s largest desalination plant in Saudi Arabia, the Ferrari and Maserati exhibition center in Sydney and the Mary Rose Museum in UK. What major developments is KLEEMANN’s technology currently being employed in, and how is the need for elevator technology evolving?
The need for elevators in the world will increase. By the end of the decade, over 60 % of the world’s population will live in cities, so we will have larger cities with higher buildings. As to what kind of technology these elevators will require, there is an increased demand for green technologies, where KLEEMANN is a pioneer not only in energy-saving technologies but also in reducing our manufacturing carbon footprint and in following design principles that allow for more sustainable products and services. We also innovate in the digital realm with the Internet of Things technologies that we are developing, which enable the facility manager or the maintenance provider of the elevator to have real-time access to the status of the elevator and be able to predict failures and, therefore, use this information to increase the reliability of the elevator.
On the manufacturing side, we are continuously automating and digitizing our production process. We currently have an investment program of about €5 million, including robotic systems to produce cabins and an automatic process for the wiring of the controllers. This helps us reduce delivery times and costs and also minimizes the possibility of human error. As a result, we are a lot faster than most of our competitors. We want to preserve this key competitive advantage because it is a winning factor in many markets.
KLEEMANN holds many registered patents and regularly organizes Innovation Idea Conferences across the company to support its internal innovation. How would you assess Greece’s, Research and Development ecosystem? How are you trying to partner with additional companies or entities to grow your internal capacities in terms of R&D?
Investments in R&D had been relatively low for many years throughout the country and across industries, but this has changed over the last 3- 5 years. At KLEEMANN, we realized early on the need for partnerships and have been working for many years with Greek universities, as well as with universities and research centers from abroad. For example, we have very good cooperation with the research center EKETA. There are also private sector efforts like the Confluence Challenge that we did together with Isomat and Alumil, Greek companies with a great innovation footprint internationally. We team up with other companies and have conferences, where we integrate ideas from universities and research centers, speeding up the idea-generation process.
In Thessaloniki, the Science and Technology Park is now being built and we support that as founding members. It is called Thess INTEC and will be one of the largest science and technology parks in Europe, serving as a hub for more than 100 companies and research centers to collaborate in the same physical space. It will be a great platform for idea generation and applicable innovation.
At KLEEMANN, you have already doubled down on implementing green technologies in both your facilities and in your products. Can you tell me how KLEEMANN, has changed its products and marketing to reflect the rising demand for more sustainable technologies?
First, we are certified with the ISO 50001:2018 Energy Management System for energy management and reduction of energy consumption. In 2018 we designed our production facilities layout so that within 4 years we had reduced the emissions from internal transportation of raw materials or semi-finished and finished products between our different factories. Significantly, we reduced our emissions by almost 50% between 2018 and 2022. Using energy-saving technology in our manufacturing process, we managed to decrease the average energy required to produce one elevator by 18%. We are very conscious of our waste management approach at KLEEMANN and last year we recycled 97% of our generated waste and only 3% was directed to sanitary landfills.
When it comes to the product, by utilizing technologies like IoT we minimize or reduce the number of visits for repairs and maintenance, thus saving time, money, and emissions.
We develop products and services that contribute to the rational management of natural resources and the reduction of generated waste. KLEEMANN was among the first companies in Greece to implement ecological design in accordance with the relevant ISO 14006 standard. We implement ecological design in the product design process and Environmental Product Declaration for specific products.
Tell me a little bit about what sort of new disruptive technologies are you increasingly incorporating into your products? What kind of impact do these technologies have on the company, its operations, and its products?
We have an initiative to complement our IoT system with several smart functions to provide extra value to the user and to the installer. These functions are innovative and most of them are patent protected. For example, we have a system where, in case the passenger of an elevator passes out or has a heart attack while alone in the cabin and can’t press the alarm button, the technology recognizes the passenger’s condition. Within a few seconds the system automatically sends the information that there is a passenger in the elevator in need of help. This technology can truly save lives.
Exports generally represent around 90% of your turnover with major clients all over the globe. In the US, you acquired Day Elevator & Lift to market the New York and New Jersey region. How significant is the US market for KLEEMANN? What is the company doing to raise its profile in the North American market?
Day Elevator and Lift was established in 1992 and is among the largest New York based dealers of quality mobility products, ranging from stairlifts and wheelchair lifts to commercial and residential elevators. It has a long history of remarkable projects and installations, such as the Historic Woolworth Estate in Long Island and the newest Platform Lift at Columbia University Historic Earle Hall, for which we won Elevator World’s Project of the Year 1st place. We have a very skillful team, constantly growing our operations and sales. The US market has not only a significant size but also a great potential. We recently relocated our official headquarters to a facility in Mineola, NY, with a fully equipped showroom, additional office and warehouse facilities, to further boost our expansion to the nearby markets and beyond. We constantly expand our product range to become a one-stop shop for all our customers’ needs. I strongly believe the US market is going to soon be a true driving force for our whole group.
What other major export markets does KLEEMANN have? What kind of plans does it have to enter new markets? Which would be your priority markets for the coming years?
The main goal is to gain a bigger market share, strengthening our position in established markets like Germany, despite a slowing construction in Europe. The Middle East looks promising and presents opportunities. Currently, we have a presence there, but I think we can do more by increasing our reach through partnerships. There are quite a few opportunities for improved results in Australia, also. Our presence in Greece, complemented by exclusive partnerships with independent companies in cities where we don’t have our own presence, is very strong. Human resources will be the next challenge, though: if growth in all these key markets continues at the current pace, we need to ensure that we have the people with the right skills to meet the demand. And this is true not only for KLEEMANN but for the whole industry.
The global elevator and escalator market is expected to grow in value from $145.6 billion in 2022 to $203.6 billion by 2028 according to market research entity IMARC Group. How is KLEEMANN working to enhance its capacities to continue to grab its share of the market? Do you have any further plans for acquisitions? How do you see your growth in the coming years?
For the moment, we don’t have further acquisitions planned. We have the manufacturing capacity to really feed our growth. When it comes to skill and talent, we face the same challenge that everybody faces, that of upskilling our people. We have a very rigorous reskilling and upskilling program within our company, with online and on-site training and we are sourcing people who are willing to move from the manufacturing side to become trained technicians and install elevators. We have also had similar programs to develop software developers internally to ensure we have enough capacity in that area. Meanwhile, through our associations, we make proposals to the government on the curriculum or the technical schools that can be adapted to meet the market needs.
In addition, we have a coaching program that is truly transformative for the culture of the company, involving 3-day workshops and one-on-one sessions, available to all employees. This atypical training , in line with our “Passion for People” value, is having amazing results for people, enabling them to achieve their breakthrough personal and professional goals. We have been awarded as a “Great Place to Work” in Greece and abroad, and that’s what truly fuels our growth.
This is a competitive market and KLEEMANN has been around for 40 years, so how do you distinguish yourself within this market as a Greek company with a German name? How do you go about your branding and marketing?
As a traditional B2B manufacturing company selling to distributors, we haven’t invested much in brand awareness. However, we have started to change our plans and strategy in key markets while remaining integrated and providing services to customers.
The KLEEMANN brand is synonymous with high-quality, well-engineered products. Niche, often bespoke or special projects like elevators for oil rigs, airports, train stations, subway stations, cruise ships, and stadiums, but also for small two-story residential buildings or villas. KLEEMANN also means trust. We make elevators, but what we truly offer is peace of mind. A construction company buying from us will rest assured because we always produce correctly and on time and, in the very rare case something is not completely right, we find the best and fastest solution there is. We take great pride in offering the best customer experience for all our partners – developers, architects, consultants, building owners, and end users. So, our best branding and marketing tool is the word of mouth of our satisfied customers.
What would be your final message to the readers of USA Today?
As a company, we look forward to meeting and doing business with new customers. KLEEMANN always proves to be the best choice for any customer willing to trust their business with us. Come to visit Greece because you are going to love it. If you are a business looking to invest outside the United States, Greece is the best option. Greece is a great place to visit, and a great place to invest right now.