SAN ANTONIO—Andreas Gerstenberger has been at the helm of Continental A.G.'s ContiTech hose business for 18 months now, and during that time much has changed.
For example, the business has a new name, a new business structure, and many of the initiatives he helped start are beginning to take shape. And even better, the business outlook is looking up, said Gerstenberger, a ContiTech executive vice president and head of the Industrial Fluid Solutions business unit (formerly Industrial Fluid Systems).
"The last two to three months, we're seeing a significant upswing in orders across the board," he said, noting that oil and gas related businesses still have issues, but even parts of that sector are improving. "We are running on all cylinders trying to fulfill the demand that is out there."
For 2016, the global Industrial Fluid Solutions unit posted about $535 million in revenues, according to company data.
Several drivers are behind the new demand, said Gerstenberger, who discussed the progress of his ContiTech business unit during the recent NAHAD annual convention in San Antonio. Those include a combination of positive expectations brought on by the U.S. presidential election, especially with talk of potential significant investments into infrastructure.
The stabilization of oil prices in the $50-a-barrel range also has helped, along with some reinvigoration of the fracking industry.
He said business also likely trended up because customers bought additional inventory ahead of price increases ContiTech enacted for its industrial and hydraulic hose products effective between March 1 and June 1. The executive blamed higher raw material costs for the increases.
"We had no alternative," Gerstenberger said. "We try to calculate carefully what the price increase needs to be in order to cover the cost increases."
Initiatives take shape
During 2016, the Industrial Fluid Solutions business spent much time stabilizing its business situation, improving processes and instituting cost reduction programs.
It also launched a new strategy called "Smart Solutions Beyond Rubber." Not instead of rubber, but beyond rubber, Gerstenberger emphasized.