From Newcomer to Outstanding Trading Partner in Five Years: A Success Story

Possehl Erzkontor North America
Written by Pauline Müller

Possehl Erzkontor is well-known in the world of raw material trading – though long under-represented in North America. But now, more than a century of expertise and enormous capability is established here in the form of Possehl Erzkontor North America Inc.

With over 100 years in the raw material industry behind it, Possehl Erzkontor, parent company of Possehl Erzkontor North America (PENA), evolved from a traditional trader in raw minerals into a quintessentially modern end-to-end logistics and raw materials, chemicals, and trace-elements supplies partner with a vast reach and set of capabilities.

It is currently established in nine locations, with PENA in North America, and presence across Europe, South America and Asia. In the past twelve months, PENA has shipped between locations such as China, Alaska, and Puerto Rico, and even further afield, cultivating unique relationships with clients and suppliers.

The company’s materials selection is as vast as its service offering – and its geographic reach. In Northern America, with a selection of hundreds of minerals and chemicals of different specifications and grades sourced globally, the PENA team is a formidable force ready to deliver exactly what clients need, at the right time and right price.

Growing infrastructure
Apart from major investments in technology, Possehl Erzkontor North America is also making significant investments in its infrastructure. The latest addition to the American facilities is a brand new warehousing unit. Close to its USA headquarters in the heart of the American steel industry in Cincinnati, Ohio, the facility became operational at the end of July 2021.

The company also has warehouses in Proctorville, Ohio, in the Tri-State region of West Virginia, and in Kentucky. Still more are situated in Pittsburgh, Pennsylvania; Chicago, Illinois; and around Alabama. From these strategic locations, PENA manages tremendous logistic feats employing ocean freight, barge, and domestic road haulage, delivering simply enormous cargo to clients from global suppliers.

The company’s latest North American facility offers a lot more than storage space, however. It also meets an entire range of its clients’ needs, such as sourcing, processing, testing, packaging, warehousing, and inspecting of the client’s raw materials.

“Anything that needs to be done in a warehouse we can do for our customers,” says Niklas Luedemann, general manager. In addition to this facility, he describes a strong new chemical division, as well as another new division that focuses on securing sustainability throughout its operations, plus new business.

The business of building relationships
When it comes to locating suppliers, there is no such thing at Possehl Erzkontor North America Inc. as simply hopping onto the internet and hitting the first listing that pops up on international material-trading sites.

With supplier partners in such locations as Turkey, Russia, Kazakhstan, and more remote places, the firm ensures that it first builds personal relationships with each of its material suppliers through personal visits and thorough site checks before it does business with them – or not.

Everything is checked, from seeing that the right procedures are followed and the correct certifications are in place, to ensuring that packaging satisfies the most punctilious requirements.

“We don’t buy from anyone we don’t know because, in the end, this product arrives with our name on it. We have a focus on working with reliable sources. We value long-term relationships. Most of our suppliers we have known for 30 years or more,” says Luedemann.

The company’s technological advances alone have greatly boosted its capacity for expansion. Brand new technology allows clients to track their shipments in real-time, while providing anytime access to all documentation and information like contracts and pricing, etc.

“It’s like a one-stop-shop experience. Since Jan Weber, our new CEO, took over last year in February, we’ve seen a real change not only in the market but also internally. We’re adapting to the new challenges that we have,” says Luedemann.

The result is a team committed to improving the quality of its customers’ supply chain. To achieve the tremendous value the company offers its clients, attention to even the minutest detail is crucial to ensuring an overall smooth transaction.

The company’s value additions cover logistics, repackaging, sizing, market knowledge, and well-informed recommendations. “The world has become so transparent, just selling raw materials no longer cuts it,” says Luedemann. “We take care of everything. From when the material leaves the mine to when it arrives in the right packaging, at the right time, at the right price, at my customer’s door.”

Adding abilities
The firm’s recent expansions include becoming the official owner of the German mineral processing firm, Mineralmahlwerk Hamm GmbH, in the city of Hamm, North Rhine-Westphalia, on January 1 of this year.

One of the world’s largest magnesium oxide (MgO), and alumina processors, this globally established mineral-processing firm mills around 180 000 tons of MgO annually. “[Mineralmahlwerk Hamm GmbH] is a great addition to our team. Not only that we now have the processing capabilities but also the people that come with it and their immense knowledge of the market,” Luedemann tells us.

The acquisition has also brought the company a step closer to a full one-stop-shop experience for customers, adding to its ever-growing selection of quality services. What’s more, the new key account manager, Jeff Tiang, adds 24 years of transatlantic raw material-sourcing knowledge to the company’s arsenal.

Possehl Erzkontor grew out of the visionary international trading activities of Emil Possehl in Lübeck, Germany, and was founded in the early twentieth century,

Success in trading, even survival, has always meant having a finger on the pulse of global events. As a result, when China opened for business toward the latter part of the last century, Possehl Erzkontor North America Inc. was poised and ready to do trade. Through all the diplomatic, trade, and environmental challenges faced by the two countries, Erzkontor stayed attuned to and in step with even the most marginal market shifts.

“We have seen a lot of changes in [some Asian markets] in the past five years. Contracts not honored, environmental issues, legal issues, companies dissolving and starting again. With our reliable long-term partners, we are in a good position. If customers buy from Possehl Erzkontor they know they get good cargo,” says Luedemann.

The North American outfit settled into its current configuration in 2006. Subsequently, a robust bulk-cargo customer base was established under the leadership of Joe Hughes, then president and general manager, who came to the firm in 2007.

Luedemann joined the team in 2017 with the mandate to diversify the company’s offering and client base. In the process, the firm grew its team to five sales representatives, two supply-chain consultants who work in close collaboration with the administration, accounting, and IT teams.

“I think the best description of our team is highly motivated and always available,” says Luedemann. He also highlights the importance of the Possehl Erzkontor corporate values passion, competence, reliability and respect. He adds, “I’m proud of our team with all the challenges we had [during COVID-19.] We’re looking forward to traveling. We’re looking forward to seeing our customers face to face.”

Delivering expertise
For Possehl Erzkontor delivering materials to clients is the crucial central process that needs to be thoroughly mastered and performed to perfection every time. As the industry is close-knit and comparatively small, Luedemann notes, it is not unusual to deal with as few as 200 people across the entire industry, “especially the refractory” market, making it vitally necessary to build close, lifelong relationships.

Typically, the company prepays suppliers for raw material which is then brought to a port where the company has a dedicated local team performing a complete analysis of the material in a third-party laboratory.

Considering the vast quantities of materials shipped, and the cost attached, double-checking specifications is key to delivering the correct goods. If tests are not performed scrupulously correctly, chances increase that clients will run out of materials – to mention but one of the undesirable knock-on effects of this sort of error.

“There are a lot of good offers out there, and we see every time that people fall for them. [But] with our service we believe that we can ensure that our customers remain competitive in the market in the long-term,” says Luedemann.

Close relationships with suppliers are key to client success, Luedemann affirms. Part of this is the teams understanding of the nuances of intercultural communication. The team also understands the value of convergence both in terms of language and customs.

“Our connections in the market and our experience are very valuable. I’m always happy to rely on my colleagues in Europe who have the experience if I need anything – we’re in close contact,” he says. “You need it to have the trust. Because we’re not speaking about single container purchases, we’re speaking about vessels carrying materials worth millions of dollars.”

International relations
The company’s deep understanding of international relations, customs, and protocols is perhaps its greatest value to clients alongside its razor-sharp logistics skills and product knowledge. These are of course all valuable add-ons that cheap internet deals are unlikely to provide in the same way.

So when one considers all that can go wrong, and the sheer scale on which it can happen, and considering the size of the orders that Possehl Erzkontor North America Inc. handles, hiring this team for large-scale international raw material and chemical purchases appears to be a pretty sound strategy.

How Possehl Erzkontor North America Inc. went out of its way to find solutions for customers who were waiting for massive orders when COVID-19 restrictions hit is, on its own, an example of its sterling commitment to its clients.

Then, when the market exploded back into activity, the Possehl team was again found ready, pulling together orders from its warehouse stocks for clients who might otherwise have been left in the lurch.

Another great support for clients that it arranges wherever possible, is to unload river-barge cargo downstream and transport it by road instead, saving customers a wait of up to fourteen days, advancing production and reducing downtime. “Our clients’ success is our success,” as they say at Possehl.

But for this international team, the success that it likes to see in the world goes beyond that of staff and clients, extending to the causes close to the hearts of its staff around the world. To the Cincinnati team, the local children’s hospital is the organization of choice that benefits most from the company’s largesse. This is just one of the ways in which Possehl Erzkontor North America Inc. gives back to the place it calls home.

A step ahead named “pektogram”
Possibly one of the company’s most impressive attributes is how it approaches its future. In addition to the five-year strategy – Road#2024PLUS – which focuses on verticalization and diversification of the current business model, other pioneering approaches have been taken. One of them: the founding of the brand-new company pektogram.

“Already at the beginning of our strategy and transformation process we realized that we cannot carry out all developments, novelties, and innovations within our own four walls,” says Jan Weber, CEO of Possehl Erzkontor. “pektogram is first and foremost a think tank that looks at the future of the industry and the acquisition of necessary skills. The goal of pektogram is to become the central node for digital, competence-driven change in the raw material industry,” adds Oliver Noske, Chief Strategy Officer of pektogram.

The new company is strategically well-situated in Bielefeld, Germany, in one of the fast-growing European startup and technology hubs. pektogram helps to create the structures that are missing in many companies today to be successful tomorrow – both sustainable and digital. The long-term goal of the company is to develop a cognitive sparring partner for the raw materials industry that is able to coordinate all transactions around value creation, thereby making sustainability a central decision factor.

“We bring agile methods into established structures, creating opportunities for sustainable change,” says Jasper Steinlechner, whose focus is on technology, digital innovation and startup methods at pektogram. “As a partner at eye level, we develop digital prototypes as well as innovative concepts and use our partner companies as multipliers for scaling the newly developed solutions.” The tech-savvy team is superbly balanced by the more than two decades of industry expertise that Weber brings, making for a rare transformative force in this niche.

At this time pektogram is evaluating and developing a customer dashboard that is currently in its trial phase. The aim is to roll out the fully-developed platform in the first half of 2022.The dashboard will bundle all relevant data and information for the customer and make it available 24/7 in a convenient and time-saving way.

Moreover, implementation of its strategy, Road#2024PLUS, will see Possehl Erzkontor North America Inc. developing its offering into a mainly service-based portfolio. Naturally, its choices are driven by clients and market trends and include testing new materials, consulting, warehousing, crushing, and sourcing.

The company’s breakbulk shipping also offers clients a win-win situation with freedom from container stocks, better freight rates, the possibility of river transport, and surplus storage that translates into consistent access to stocks.

“We are looking forward to more verticalization and getting deeper into the supply chain with our customers. We have a lot of experience. And a lot of relationships. And knowledge that is not common and cannot be learned at the university of Google,” says Luedemann.

With all its decades of expertise hard-won through years of travel and firsthand experience of so many country’s differing ways and customs through its parent company, Possehl Erzkontor North America Inc.’s unique preparedness for the North American market is already bearing fruit.

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