What makes SFS’s corporate culture stand out?

Sharply rising energy prices resulted in several rounds of price increases at SFS. This held particularly true in Europe, home to some 85 of the 140 sites. Energy prices are rising less sharply in North America and Asia than they are in Europe. Predicting what will happen next is extremely hard

Around 10% of our own energy needs in Switzerland are covered by existing photovoltaic installations. Additional future photovoltaic installations offer the potential for approx. another 10%, meaning that a total of around 20% of the electricity required throughout Switzerland could be self-generated. To help fight climate change, ensure regional energy security and achieve national energy policy goals, a wind turbine is planned to be built on the company’s premises in Heerbrugg (Switzerland). This turbine should generate 5 GWh of electricity per year, which is roughly equivalent to the consumption of 1,300 households. The energy generated will be used directly for production facilities in Heerbrugg and cover another approx. 10% of the Group’s electricity requirements in Switzerland. For more information about the project go to www.rhintlwind.ch. An enormous effort is also being made at the international level to expand the Group’s power production capacities. 2022 brought the large-scale installation of photovoltaic modules that will produce around 6 GWh of electricity per year at the sites in Malaysia and Nantong.

SFS introduced several other energy-saving measures as well. One of these is a company-wide initiative, under which building temperatures have been lowered by 1°Celsius, outdoor lighting is being switched off at a certain time during the night and restrictions have been placed on the use of ventilation and water heating systems. The last of those measures alone has been able to slash the amount of energy used for infrastructural facilities at the Heerbrugg (Switzerland) site by around 20%. The hybrid heat pump system used to heat the building was temporarily converted to oil in order to reduce gas consumption. SFS employees are also making their own contributions. An in-house energy conservation campaign was launched in an effort to inspire employees to take the stairs instead of the elevator, completely power down computers and machines when not in use and always turn the lights off, just to name a few of the tips suggested as part of the campaign.

Sustainability is important to us! Embracing a sustainable mindset and practices gives us a chance to re-examine our products and processes on a daily basis and improve them continuously for the good of all stakeholders. As a value engineering specialist, working with our customers to develop sustainable products and solutions gives us a multitude of opportunities to utilize our know-how and offer our customers lasting added value – in keeping with our corporate principle of “Inventing success together”. SFS’s long-term goal is to incorporate sustainable business mindsets and practices into its corporate strategy and business model.

SFS adjusted its sustainability reporting in line with the new requirements of the Global Reporting Initiative (GRI 2021) during the year under review. In this context, the existing material topics were reviewed again and a stakeholder workshop was held to discuss and evaluate both the company’s impact on the environment, society and economy with respect to these topics (inside-out) as well as how these topics impact SFS (outside-in). In the course of this, the following main topics were identified:

• Energy & emissions
• Sustainable solutions
• Employee promotion & engagement
• Procurement
• Occupational health and safety

You can find detailed information on the topic of sustainability at SFS at sustainability.sfs.com. The report for the 2022 reporting period will be published at the end of May 2023.

SFS manufactures products for various automotive applications, ranging from seat belts and airbags to brake systems. Innovation and growth in these application fields is driven by trends towards greater comfort, safety and efficiency, and in an overall context by the autonomous vehicle trend. SFS profits from the resulting vehicle electrification through the additional growth opportunities; for example, actuators for electronic brake systems. Sales generated with products for internal combustion engines currently represent a low, single-digit percentage of overall SFS Group sales, so the phase-out of internal combustion engines in the long term will not have a significant impact on our business.

Looking at the entire range of cold-formed products made by SFS, we estimate the material savings are equivalent to about 67% of material consumed using conventional manufacturing processes. Based on our annual consumption of raw materials and taking into consideration the emissions generated both to produce the steel and by conventional machining processes, we calculate that we save about 300,000 tons of CO2 emissions a year through cold forming manufacturing processes. This roughly corresponds to the annual CO2 emissions of approx. 50,000 single-family homes using a conventional oil or gas heater.

SFS products are pivotal to the success of a wide range of different automotive applications including seat belts, airbags and brake systems. Innovation and growth in this industry are being driven by trends towards greater comfort, safety, efficiency, and, in an overall context, by the autonomous vehicle trend. SFS benefits from the associated electrification of vehicles, since this lets us tap other promising growth areas, with actuators for electric brake systems being just one example. These trends are independent of the powertrain. Sales generated with products for internal combustion engines currently represent a low, single-digit percentage of overall SFS Group sales, so the phase-out of internal combustion engines in the long term will not have a significant impact on our business. Given the robust innovation and growth trends as well as the Group’s enormous competitive edge, SFS expects a continuation of strong organic growth that is likely to outperform the market as a whole by 4–6%. Additional production capacities are being created to implement these growth projects, with some examples including the expansion of the production platform in Nantong (China) and the construction of an additional production hall in Heerbrugg (Switzerland).

The past few years have brought a polarization of the international political situation. Due to the war in Ukraine, sustained disruption in supply chains, further waves of COVID-19 in Asia and Europe as well as sharply rising energy costs, interest rates and inflation, considerable uncertainty and high volatility are having an impact on international economic development. Nationalist tendencies have intensified in many places and the tone of trade relations has become harsher. Despite these challenges, SFS is optimistic about the future. As a value engineering specialist that creates added value for its customers with oftentimes success-critical, high-precision products in selected niche applications, we have always been close to our customers. The advantages of our “local-for-local” strategy really shine in this context. These qualities are driving forces behind both innovation and internationalization and led to our company’s global presence. Standardized production equipment helps us create a high degree of flexibility – a key advantage.

For example, we are paying close attention to scenarios in which the electronic industry supply chain could shift outside China and discussing these with our customers. Through its established sites in Malaysia and India, SFS already has production facilities that offer some alternatives. The fact that we are firmly rooted across a broad range of different niche applications means that we are in a good position to absorb negative developments in individual markets.

The digital revolution is one of the most important megatrends for SFS. As it did before the COVID-19 pandemic, the company systematically takes advantage of the opportunities and applications opened up by ongoing product and process digitalization to make continuous improvements and increase efficiency in all aspects of the business. Some examples from the past financial year include:

• Further optimization of plant and production processes with respect to quality assurance by means of networking, collecting and evaluating plant and process parameters
• Virtual process and product development capabilities were enhanced with the expansion of the simulation environment for drying and heat treatment installations, forming simulations and material flow analyses
• Modern e-commerce offers like the eShop of the Distribution & Logistics segment that enable quick information procurement and simple order processes
• Other major investments in the optimization and interconnectedness of SFS-internal business processes through the transition to S/4HANA, a new generation of ERP systems, in order to better and more efficiently meet market and customer requirements while also raising the level of process standardization
• Strong commitment to cybersecurity with a focus on technical solutions and preventive measures that mitigate risk
• More widespread use of virtual channels of communication such as a digital event platform, an in-house video studio for content production and the rollout of the mySFS employee app.

In all these areas and many more, SFS has its own in-house specialists who collaborate with external service providers to promote the ongoing development of applications and thereby steadily expand SFS’s digital expertise.

Switzerland is where it all began: SFS Group traces its roots back to a hardware store opened in Altstätten, Switzerland, in 1928 under the name Stadler. The establishment of a metal press shop in Heerbrugg in 1960 laid the foundation of the company’s manufacturing activities and subsequent international expansion. Our desire to be close to the customer was the driving force behind the internationalization and global presence of our company.

Switzerland is still very important to SFS Group today. In addition to the Distribution & Logistics Switzerland segment, where activities are focused on Switzerland, and the corporate functions, the Automotive and Industrial divisions serve their European customers primarily from their sites in Switzerland. Our Swiss sites have remained competitive on the international stage, even with the sustained strength of the Swiss franc, through a focus on the development and production of expertise-intensive, technologically advanced products and on highly automated, capital-intensive manufacturing processes. The relatively good availability of skilled workers is an important locational advantage and another reason why Switzerland is our innovation and technology hub.

The organizational structure with three segments, all of which have different business models, benefits SFS in several ways. The Engineered Components and Fastening Systems segments help and augment each other in matters related to manufacturing technology and capabilities. The Fastening Systems and Distribution & Logistics segments reap benefits from their pooled knowledge and competence in the areas of sales and distribution, services and logistics solutions. Our value proposition – Inventing success together – runs through all segments of our business activities and requires the continuous goal of continuous improvement in order to create added value for our customers. With the aim of inventing success together.

SFS's internal R&D departments examine technological developments in all relevant business areas. New developments and processes that fall within SFS’ strategic focus are added to the value chain or product portfolio.

SFS is pursuing the development of additive manufacturing processes and has already successfully applied it in the production of prototypes. Our focus, however, is on markets and applications that involve very large production quantities: SFS produces more than 30 billion precision components a year. With these high production volumes, cold forming – one of our core technologies – offers significant advantages owing to its very high productivity. Today's additive manufacturing processes are not a feasible alternative in the production of high volumes. However, as additive manufacturing technology matures, it could become a viable add-on to SFS’s manufacturing technology portfolio.

In terms of fastening solutions, SFS is focusing on specific mechanical applications that offer our customers added value. This added value can be in the form of a more efficient fastening process, greater reliability or improved ergonomics. In these applications, alternative fastening solutions, such as adhesive bonding, are not viable, or do not offer the same level of value added.

The COVID-19 pandemic put the effectiveness of our business strategy to the test. The strategic alignment has proven to be robust and correct:

• For SFS, close customer relationships are essential for the successful realization of its value proposition. In keeping with our ‘local for local’ strategy, we are steadily building up our global development and production platform. SFS and its customers benefit from superior supply reliability thanks to short and robust supply chains.
• Thanks to its balanced focus on different end markets, regions and sales channels, SFS successfully cushioned the consequences of the decline in demand.
• With its increased focus on the medical device industry – a market that is growing worldwide – SFS is attractively positioned for the future.
• Thanks to its good profitability and solid balance sheet, the company has the means and the ability to pursue its long-term strategy and to make the associated investments – even in a crisis.

Based on these findings, SFS is encouraged to systematically continue to pursue its chosen path.