Things are happening in quick succession: After the Finnish pipeline specialist Uponor took charge of 2.1 billion euros in November 2023, the next strategic adjustment is now underway at the major Schaffhausen corporation Georg Fischer (GF ). In the future, GF wants to focus on the water business and is turning its back on the mechanical engineering business, ie the GF Machining Solutions division.
The industry group announced on Wednesday that “all options” will also be examined for the light metals division, GF Casting Solutions, which is active mainly in the automotive and aviation industries. In other words: This department could also be sold. According to GF, partnerships are also possible here.
So Georg Fischer will be much smaller in the future: If the Solutions division were also sold, around 45 percent of sales would be lost.
With Piping Systems and Construction Flow Solutions, GF will focus exclusively on water and fluid management in the industrial, infrastructure and construction sectors. The focus is no surprise to the economic development delegate for the canton of Schaffhausen, Christoph Schärrer. “With the Uponor takeover a year ago, Georg Fischer clearly showed its development intentions in the field of Water Solutions and Flow. Therefore the next step is to understand and target this growth market.”
Market leadership as a goal
The takeover of Uponor was only the beginning of a major change in the history of GF’s business model. After all, this acquisition made GF the world’s number two in the pipe business.
The latest announcement from the Schaffhausen group is very optimistic: “Of course, every change also comes with uncertainty, but we see attractive opportunities for growth with this focus,” says Beat Römer, Head of Group Communications at GF, when “Schaffhauser Nachrichten” asked him. . The industrial group sees opportunities due to long-term megatrends such as climate change and rapid urbanisation. With the help of acquisitions, sales are expected to increase to around 5 billion francs by 2030. Georg Fischer aims for market leadership in global liquid handling.
According to Schärrer, the goal of becoming the global market leader is a positive sign. “Especially for the Schaffhausen business location.”
Small changes for Schaffhausen
But what does this change of strategy at the major corporation mean for employees in Schaffhausen? “In principle, no jobs will be lost as a result of the transaction; the employees in question will have a new employer, from Switzerland, of course,” says Römer.
GF currently employs around 3,500 people in Switzerland, of which 1,400 work at GF Machining Solutions. As Römer says, these are located in places like Ticino, Geneva or Bern. “GF employs around 1,100 people in Schaffhausen who work at GF Piping Systems, GF Casting Solutions and within the group.” Not much will change in the group in the short term. “GF Machining Solutions and GF Casting Solutions will remain in the GF portfolio until further notice,” says Römer. The transaction is expected to be completed by the second quarter of 2025 at the latest, subject to the necessary approvals from the authorities, Römer said.
But who will lead GF Machining Solutions, formerly known as Agie Charmilles? The division goes to the United Meilt Group based in Switzerland. The world market leader in grinding technology is majority owned by Patinex AG, owned by the Ebner family. The company employs over 2,000 people worldwide. According to GF, the value of the transaction is between 630 and 650 million francs.
Further strategic decisions are expected to come from GF in due course. In any case, the stock market is optimistic: on Wednesday, Georg Fischer shares rose 15.6 percent to 63.95 francs. “The long-term wishes of investors for a clear focus are now being fulfilled,” the Zürcher Kantonalbank said on Wednesday.
Interview Between Time.news Editor and Industry Expert on Georg Fischer’s Strategic Shift
Editor: Good day! We’re thrilled to have you here to discuss the recent strategic shifts at Georg Fischer (GF) as they pivot towards a focused business on water solutions. To start off, could you share your thoughts on GF’s decision to divest from its mechanical engineering sector?
Expert: Thank you for having me. GF’s divestiture from mechanical engineering, particularly the GF Machining Solutions division, is indeed a significant shift. It shows a clear intention to realign their business model toward growth areas like water management. The decision seems to stem from a long-term vision focused on sustainability and addressing global challenges such as climate change and urbanization.
Editor: That’s a great point. The recent acquisition of Uponor for 2.1 billion euros and the announcement to explore options for GF Casting Solutions suggest a robust strategy. How do you think these moves are positioning GF in the global market?
Expert: Absolutely! The acquisition of Uponor has already placed GF as the second-largest player in the pipe business globally. This move is particularly strategic; it taps into essential market demands for efficient water and fluid management solutions. Given the trend towards urbanization and the increasing pressure on water resources, GF is effectively positioning itself to take advantage of these megatrends.
Editor: It appears that GF is anticipating significant growth in the water sector. What specific opportunities do you foresee as they focus on market leadership in liquid handling?
Expert: The potential for growth in liquid handling is immense, especially in light of increasing environmental regulations and the urgent need for infrastructure upgrades in many parts of the world. GF has expressed a goal to achieve around 5 billion Swiss francs in sales by 2030 through this strategic focus and further acquisitions. They are likely to capitalize on technologies that enhance water conservation and efficiency, which can drive substantial demand across various industries including construction and infrastructure.
Editor: It’s encouraging to hear that GF’s focus on the water business is positively received, especially by Christoph Schärrer, who noted that it aligns with the future growth market. However, what impact do you believe this will have on GF’s workforce in Schaffhausen?
Expert: It’s reassuring that GF has stated that no jobs will be lost due to these transactions, as the affected employees will transition to new employers, albeit still within Switzerland. This reflects GF’s commitment to its workforce during this transitional phase. However, it’s crucial for the company to communicate clearly and provide support to its employees during this change to maintain morale and productivity.
Editor: As we wrap up, what is your overall assessment of Georg Fischer’s strategic refocus? Is this a trend we might expect to see from other industrial companies moving forward?
Expert: I see GF’s strategic shift as a timely and forward-thinking move that is likely to inspire other companies in the industrial sector. As industries face mounting pressure to adapt to environmental changes, focusing on sustainable solutions such as water management will likely become a common theme. This shift not only addresses immediate business needs but also showcases a larger commitment to corporate responsibility and sustainability—values that are becoming increasingly important to consumers and investors alike.
Editor: Thank you for sharing your insights! It’s been a pleasure discussing the future of Georg Fischer and the implications of their strategic choices.
Expert: Thank you for having me. It’s an exciting time for the industry, and I look forward to seeing how companies like GF navigate these shifts.