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Grundfos

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Grundfos is the world's largest pump manufacturer, based in Denmark with more than 18,000 employees globally. The annual production of more than 12 million pump units, Circulator pumps (UP), submersible pumps (SP), and centrifugal pumps (CR) is approximately 50% of the world market for these pumps. Grundfos also produces electric motors for the pumps as well as a considerable amount of electric motors for separate merchandising. Furthermore, Grundfos develops and sells state-of-the-art electronics for controls for pumps and other systems.

Grundfos would like to believe it is the full range supplier of pumps and pump solutions, represented in every part of the world. They have certainly filled a wide range of niches but can not be said to be in all markets. They have next to no presence in petrochemicals (due to absence of suitable motors). They also do not make air operated pumps, vacuum pumps, fuel pumps, piston pumps etc - so the marketing claims are at best misleading.

History

Grundfos was established in 1945 in Bjerringbro by the late Poul Due Jensen. At first he gave his company the name of "Bjerringbro Pressestøberi og Maskinfabrik" (Bjerringbro Die-Casting and Machine Factory) and not until 1967, after several changes of names, did the company get its present name, GRUNDFOS.

Ownership

The Poul Due Jensen Foundation was established as a self-governing institution in 1975. Today, the foundation owns about 86 per cent, staff about 2% and the founder's family about 12 per cent of shares in Grundfos Holding A/S. The aim of the foundation is to consolidate and expand the economic basis of the continued development of the Grundfos Group. The capital and the profits of the foundation are to be utilised solely for the aim of the foundation, that is the profits are to be re-invested in the Grundfos companies. Grundfos Holding A/S is the majority shareholder in all the Grundfos companies.

Applications

Circulator pumps are used for heating, ventilation and air-conditioning in private homes, office buildings, hotels, etc. In industry, the pumps are used in processes as well as in the area of plant maintenance, and furthermore as important built-in parts in Original Equipment Manufacturer (OEM) products. In the water-supply and wastewater sector, Grundfos offers a wide range of pumps for irrigation, green houses and for municipal, private and industrial water supply as well as sewage applications use.

Global expansion

The Grundfos Group is represented by companies in all parts of the world. In addition, Grundfos products are merchandised by distributors in more than 50 countries. For instance Grundfos is very active in China.

In 2006 Hilge, a producer for pumps in sterile applications, was acquired by the group; it has not been fully integrated into the main business yet.

Alldos, a German manufacturer of dosing pumps and disinfection equipment, was acquired in early 2005. Alldos employed around 250 people and had a strong presence in Europe and the Middle East and Australia. Alldos were the only competitor to Grundfos's 'digital dosing' technology. Grundfos dosing products now include Alldos's corporate colour green with Grundfos black.

On December 1, 2007, Grundfos announced that it had purchased US pump manufacturer Peerless Pump Company. "Effective December 1st 2007, the Grundfos Group has acquired Peerless Pump Company. Peerless is a U.S. based (Indianapolis, Indiana and five other North American facilities) manufacturer of pumps and fire protection systems. With more than 400 employees and annual sales of USD 110 million, Peerless is Grundfos’ largest acquisition to date. Grundfos continues its aggressive growth strategy in North America."

Grundfos have a typical large company policy of recruiting internally where possible. This 'strengthens the corporate culture'; however it also leads to very insular management with very little scope or incentive to challenge existing structures and suggest improved ways to work. Very few management staff are recruited externally. Independent thought is not usually encouraged.

Research and Development

Grundfos has traditionally attached great importance to R&D. DKK 543m was used for research and development expenses in the financial year of 2004. In 1985, Grundfos established its own Electronics production and in 1991, Grundfos Electronics was inaugurated, including a Hybrid Factory with clean room production. In May 1990, the Grundfos Technology Centre was inaugurated. This centre is used for research of new materials, development of process technology and construction of advanced production equipment and machines. In 1993, Development, Design and Product Management moved into a newly built Innovation Centre.

Service and support

Grundfos have a stated strategy of being global and providing a global 'service'. In practice most customers like the products (which are generally well engineered and manufactured, reliable and efficient) but find support and service to be broadly poor. This is mostly due to the way that the local businesses are structured. Keeping the 'Cost to serve' ratio low is a very important financial ratio within Grundfos senior management and actually providing support and service increases this value. Country managers with high 'cost to serve' ratios are unlikely to move into more senior roles. Grundfos has no stated targets or strategy for improving customer satisfaction at any level.

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