Enterprise throughout the generations
An interview with J. C. Schmitz, CEO and Chairman of Rotarex S.A.

With 10 factories and 30 sales and logistics centres shipping its products to over 65 countries around the world, Rotarex S.A. is at the forefront of the global gas control equipment business. Its high value innovations not only improve safety and control in industrial gas operations, but also enhance productivity and profit.

A pipeline of innovation and near 1,200 dedicated employees generate around €150m in annual sales and maintain the Rotarex position as a world-leader in cylinder valve technologies. Such statistics and success are all a far cry from the company’s inception over 90 years ago. Indeed, the roots of Rotarex lay not in the equipment business, but on the other side of the fence, in gas production.

Back then, Rotarex – or CEODEUX as it was originally named – was invested in carbon dioxide production for the Luxembourg market. But a succession of generational enterprise has taken the company from local gas producer to global force in gas equipment technologies.

As current CEO and Chairman Jean-Claude (J.C.) Schmitz explains in an interview with gasworld magazine, the Rotarex story is one steeped in diversification and seizing opportunities, right from the outset.

Seeking a better way

Rotarex was founded in 1922 by our interviewee’s grandfather, A.T. Schmitz,as a producer of carbon dioxide gas for the Luxembourg market – at that time, mostly breweries and steel mills. In fact, the original company name – CEODEUX – means ‘carbon-dioxide’ in French.

By the 1930s the company had grown into a regional supplier, but was also dissatisfied with the performance of valves available. From this, the birth of Rotarex as we know it today would take shape, as the company began to design and manufacture its own valves for industrial carbon dioxide and fire suppression applications. Schmitz describes the first example of enterprise throughout the generations at Rotarex, “Our first valve design patents date back to 1932. As it turns out, our valves were quite good! After winning industrial design awards at the Brussels Industrial Show in 1935, we had gas producers from the entire Benelux region wanting to buy our valves.”

It wasn’t long before the company’s next demonstration of enterprise, as Schmitz’s father Edgard came to power and sought to capitalise on gaps in the valves market. “The next turning point came after World War II, when my father, Edgard Schmitz, became the CEO. First, our company gained an important advantage in manufacturing. Just after the American liberation of Luxembourg in 1945, we began producing tyre valves for the US Army; they helped the company acquire new automated machines that ultimately helped CEODEUX lead in quality, precision and speed of production.”

“Secondly,” Schmitz adds, “CEODEUX was an early pioneer of safety valves for the rapidly growing LP gas market in post-war Europe. In those days, there were a lot of accidents when consumers would mishandle the pressurised gas tanks. So we developed safety valves with a user-intuitive safety lock. Plus, the valve could be removed for servicing while the tank was still under pressure. Shell in the Netherlands was one of the biggest regional LPG suppliers, and we were one of their biggest valve suppliers.”

Schmitz indicates that business doubled during this period, and the company became a regional leader. By now, around half the company’s turnover came from valves, with the other half from gas production. But it was in the mid 1970s that growth really accelerated – and Schmitz himself was firmly at the heart of it.

“Shortly after I became CEO in 1976,” he explains, “I began to execute an ambitious plan of global expansion. My vision was to become a global leader, and we made significant infrastructure investments in innovation, state-of-the-art manufacturing, and building a global network of sales offices.”

“For innovation, we were one of the first gas companies to create a dedicated R&D infrastructure. We created a state-of-the-art testing laboratory, computer-aided design equipment, and hired the best-and-brightest engineers and technicians to run it – and some of the early innovations were huge successes.” The company created and patented the LPG 80% stop-fill valve (the first overfill-protection device) in 1988, for example, a device that would become a best-seller in the US and was mandated by new federal safety regulations.

By 1990, CEODEUX was producing and shipping over one million units per month – double its previous sales – while in parallel, its innovation centre developed the world’s first tied-diaphragm valves for the new ultra-high purity (UHP) gases being used in the ‘newborn’ semiconductor market. As Schmitz explains, these valves kept the mechanism separated from the gas-wetted areas to maintain gas purity, technology that is the standard in the UHP industry today. Rotarex estimates that it currently holds the leading global market share for UHP gas cylinder valves.

Step-change

Geographic expansion was the next major driver of growth, as the story of enterprise at Rotarex continued.

In the early 1980s, CEODEUX opened offices in every major European country (France, Germany, Italy, Spain, UK, and the Netherlands) and developed strategic partnerships with the major European gas suppliers. By the end of this decade, the company opened its first overseas office in the US (1989) and in the 1990s began building a presence in Asia (Japan, Singapore) and South America (Brazil).
More recently, the early 2000s saw new offices opened in Russia, Asia and the Middle East (Moscow, Australia, Thailand, India, UAE) and today, Rotarex operates 30 sales offices around the world.

“As sales became increasingly global, we began investing in global manufacturing and logistics so we could serve our customers locally, wherever they are in the world,” Schmitz affirms. “First came a major assembly plant in mid 1990 in the Czech Republic, and production/logistics centres in the US and Brazil. In 2000, a new state-of-the-art plant was built in China to accommodate the fast-growing Asian sales.”

“All the while, investments were being made in new and better machinery in the Luxembourg factory to maintain a manufacturing advantage. Today, we have 10 factories and 30 sales and logistics centres shipping our products to over 65 countries.”

“Along the way,” he adds, “it was clear that the company had outgrown its original name, CEODEUX. We were global, we no longer produced carbon dioxide gas, and our equipment was designed for a broad spectrum of gas types – not just carbon dioxide. So we began a rebranding initiative that sought to consolidate all product brands under a new master-brand, ROTAREX, that stood for technical excellence, best-in-class quality and responsive service.”

But this early period in Schmitz’s leadership also heralded a step-change in the company’s operations, as it exited the gas production business completely. He explains, “In the late 1980s we began the third strategic growth initiative: expansion of the product range via acquisition. We saw the opportunity to leverage our expertise and infrastructure across the entire gas distribution system – to expand beyond cylinder valve technologies and offer a complete solution of regulators, connectors and instrumentation.”

“Our first acquisition was the SMT business – the equipment division of Air Liquide, based near Dijon, France. That gave us an immediate platform in gas regulator technology – it also marked our exit from the gas production business to focus entirely on valves and equipment.”

Over the next decade, the company acquired eight additional gas equipment technology companies who were either regional leaders in their field, or had promising advanced technologies.

These included:

  • SELFA – The leading French producer of line valves and regulators for UHP, specialty gas and cryogenic applications
  • MEROBEL – The world-leading range of valves and joints for oxygen pipeline applications in the steel production sector
  • SAGANA – The leading French manufacturer of high-specification fittings and instrumentation
  • GAZEL – The leading French manufacturer of fittings for UHP applications
  • SRG – Schulz-Rackow Gastechnik, the German leader in LPG tank and cylinder equipment
  • CMT – A Dutch electronics start-up firm with innovations in electronic measurement and telemetry.

“By the early 2000s, we had built expertise and manufacturing capability across multiple product platforms and could offer our customers a complete gas distribution solution in addition to our historical strength in cylinder valves,” Schmitz adds.

Focused innovation

With the launch of the Rotarex brand came the formation of six dedicated business units as the company aimed to focus its expertise in specific areas. Each business unit has its own R&D facilities and dedicated sales and service teams:

  • ROTAREX CEODEUX – The historical cylinder-valve core of the business, dedicated to UHP, medical, industrial and refrigerant applications
  • ROTAREX EQUIPMENT – Line valves, regulators and instrumentation for specialty gas, UHP and industrial applications
  • ROTAREX FIRETEC – Valves and components for entire fire suppression systems, including fixed installation, object protection and fire extinguisher applications
  • ROTAREX AUTOMOTIVE – Valves, regulators and sub-systems for alternative energy-powered vehicles using CNG, LPG and hydrogen gas
  • ROTAREX SRG – Valves, regulators and level gauges for bulk tank and portable cylinder LPG applications
  • ROTAREX SOLUTIONS – Valves, regulators and systems for water-carbonation applications.

As a result of this structure and its ongoing focus on innovation, Rotarex estimates itself to be a world leader in seven of the cylinder valve segments it competes in (UHP, medical, refrigerant, oxygen-pipeline, fire, water-carbonation and CNG automotive) and a major player in all other segments.

So how does the company’s products affect a customer’s bottom line? Schmitz explains, “Rotarex helps our gas company partners grow their bottom line in two important ways. The first is by giving their customers high-performance, value-added innovations that improve the safety, control and productivity of their gas operations. Particularly in developed markets, where customers have a choice of gas supply, gas companies need to create an edge via value-added services.”

“Leveraging our strength in R&D, we collaborate with gas companies to develop innovative solutions that solve their customer’s gas handling problems. Innovation helps them win new clients, increase customer retention and maintain value-added pricing in an increasingly competitive environment. And our technical excellence and quality translates to consistently safe and dependable performance which helps improve loyalty.”

“Secondly, Productivity is one of the 7 Axes of Innovation for Rotarex, and many of our innovations directly improve gas company operating efficiency. For instance, Rotarex was the first to introduce a 10-year maintenance-free warranty on many of our valves that reduces maintenance costs. We were a pioneer in RPV (residual pressure valve) technologies, which significantly reduces cylinder contamination and reconditioning costs. We are at the forefront of ultra-high pressure technologies (500-700 bar), lighter and more compact designs, multi-functional valves, and electronic monitoring systems that help reduce cost, save time and improve operating productivity.”

Challenges and opportunities

The CEODEUX cylinder valve product range is the historical core of the company,representing around 40% of sales, and the focus of much of its R&D activities. The valves division is sub-divided into four specialist areas, notably high purity and UHP gases (Puretec), valves and equipment for medical gases (Meditec), industrial gases (Indutec), and refrigerant gases (Cryotec).

With such expertise in cylinder technology, what challenges – and opportunities – does the company see in the market? The same word seems to resonate, as Schmitz describes innovation as being at the heart of both. He explains, “We believe innovation and responsive service will continue to dominate the growth agenda. Gas companies are looking for partners who can add value to their business – to help them better solve the problems of their customers – or to help improve their operational effectiveness and productivity.”

“Rotarex is well-positioned to be that innovation partner. We will continue to collaborate with our partners to jointly develop new end-user insights and develop applied solutions that make a difference.” He enthuses, “We only see opportunity. As I just mentioned, innovation and better service will continue to drive future growth. So we will continue to focus our efforts in those areas.”
Rotarex sees a particular opportunity to further develop its equipment business. Part of Schmitz’s vision in the 1980s was to create a complete equipment range to complement its leading cylinder valve range – within a decade, the company had done so, largely via acquisition and with a product range spanning source to point-of-use. Now, gasworld understands, the quest is on to become a leader in these sectors, just as the company is in the field of cylinder valves.

“We are also able to take advantage of ‘cross-pollination’ opportunities. Because of our global scope and engagement in multiple gas application areas, we can quickly take best practices and new technologies in one region or application, and apply them across all sectors. For instance, the research we are doing in 700 bar hydrogen technology for automotive applications will help us to develop 700 bar cylinder valve innovations. Likewise, digital supply management technology in our fire division will quickly be applied to medical and specialty gas innovations.”

Enterprise in the future

Rotarex has clearly come a long way since those early days as a gas producer in Luxembourg, having forged a path of innovation over the last 90+ years. The company is now a leading player in the gas equipment business, serving customers in over 65 countries. Around half of business comes from Europe, we understand, with 20% each from North America and the Asia-Pacific. Schmitz confirms that Asia represents ‘our fastest growth’.

There is also a particular point of pride for our interviewee; since Schmitz became CEO, the company’s sales have grown up to 50 times. “Based on our strong foundation, and full innovation pipeline,” he adds, “I am confident that this growth momentum will continue in the future.”

So what does the future hold for Rotarex? Ever the optimist by his own admission, Schmitz believes the future is bright and despite a currently continued uncertain economic outlook, there are robust growth prospects for Rotarex. This will be achieved via the same tried and trusted value-added strategy, we understand. “Hope is not a strategy,” he explains. “We have a full pipeline of advanced technology projects in our laboratories, and through collaborations with universities, that will continue to provide our customers new solutions and better ways of working. R&D will remain our priority, and we have identified seven strategic axes of innovation that guide our development.”

“In addition, we are always looking for new ways to improve our quality, organisational effectiveness and customer service, and we will continue investment in strategic initiatives such as upgrading our plant ISO qualifications, upgrading our customer service IT interface, and further expanding our service network.”

For a story steeped in innovation and family enterprise, it seems fitting to conclude with mention of the next generation of the Schmitz lineage. Both of Schmitz’s children are ‘active’ in the business – so what enterprise might the next generation bring to Rotarex?

“I am proud that the fourth generation of the Schmitz family is active in the business. Both my children, Philippe and Isabelle, are leading various business units, and are helping to maintain the growth momentum as we continue to build our global network and develop new technologies,” he closes. “As my children start to be more active in daily operations, our customers can count on their continued commitment to excellence.”

This article first appeared in Gasworld magazine in March, 2015. It is reprinted here with permission.

ROTAREX INNOVATION. BREAKTHROUGH PRODUCTS & OVER 100 PATENTS.

Today’s Rotarex is the gas control industry’s innovation leader. When companies worldwide need products that enable new technologies and systems, they turn to us. And it’s been that way since our first Ceodeux valves won innovation awards in the 1920’s, propelling us into the top tier of cylinder valve manufacturers. We’ve never stopped inventing, designing, prototyping and manufacturing first-of-a-kind products that solve industry challenges and invent new, safer ways of working.

 

  • Rapid response R&D infrastructure
  • Applied innovations such as the integrated valve
  • Breadth of technology across regions worldwide
  • Crossover solutions from one application to another


Videos
Rotarex Corporate Video

Rotarex Corporate Video

Learn about Rotarex’ premium quality cylinder valves, pressure regulators & gas control equipment…

Rotarex SRG

Rotarex SRG

SRG Schulz + Rackow Gastechnik – LPG valve, LPG pressure regulator & LPG level gauge manufacturer.

Rotarex Firetec

Rotarex Firetec

See the economical FireDETEC fire suppression system quickly suppress a vehicle engine fire.

Rotarex Firetec

Rotarex Firetec

See the economical FireDETEC fire suppression system quickly suppress fire in a commercial kitchen.