In the early 1990s, Martin Kannegiesser was at a crossroads. The market was turning, and Herbert Kannegiesser, the machinery company named for Martin's late father, had to adapt or disappear.
Herbert Kannegiesser, tucked amid farmland in the north German town of Vlotho, was dominant in its small market: machines that automatically iron and fold shirts for commercial laundries and textile manufacturers. But the cloth manufacturers were moving to Asia, while the laundries were consolidating and demanding systems that could wash, dry, iron, and fold.
Company President Martin Kannegiesser had two options: He could follow the textile manufacturers to Asia or start making the big systems the heavy-duty laundries wanted. He lacked the resources to do both. "Sometimes you have to bet everything on one card," says Kannegiesser, now 62.
Kannegiesser decided to concentrate on heavy-duty laundries. That meant acquiring other small German companies with the expertise in automated washing and drying.
Today, Herbert Kannegiesser splits the lion's share of the global market with Brussels' Laundry Systems Group. Sales have doubled from four years ago, to $188 million, and Kannegiesser makes a "satisfactory" profit, Martin Kannegiesser says. Herbert Kannegiesser has six factories in Germany, including one in eastern Germany that was once part of a huge socialist combine. Kannegiesser sells its machines in 46 countries.
Kannegiesser continues to face new challenges. To stay ahead of a market that is changing quickly, his company works constantly on productivity and spends well over 10% of sales on product development. One innovation allows customer representatives in Vlotho to diagnose problems with Kannegiesser machines worldwide via an online connection. But Kannegiesser also believes in face time. "You have to go there and talk to the people," he says. Simple but effective.
By Jack Ewing in Vlotho, Germany