22nd July 2024

Klesch Refineries: Long-term value through operational excellence

Following the acquisition of Heide in 2010 and Kalundborg Refinery in 2022, Klesch has prioritised the creation of long-term value through operational excellence.

According to Juergen Wollschlaeger, Managing Director of Refining, the focus has been on improving operations, reliability, and availability at the refineries, whilst helping teams to learn and develop capabilities.

“We looked at various factors across both refineries in terms of increasing throughput, including the product mix, commercial contracts, refinery operations. We sought to commercially optimise the sites, whilst maintaining operational expertise through looking at operational KPIs and data.”

Steps by Klesch following acquisition of Heide

Klesch leadership worked closely with the teams at Heide to identify opportunities to improve performance, to ask questions, and to explore new ways of working.

According to Roland Kuehl, Managing Director of Heide, through close collaboration, the team were able to deliver substantial savings. “We have successfully increased the number of products offered to customers. Today we have a greater understanding of our Refinery and have significantly improved the way we operate.”

Steps taken by Kalundborg

After the acquisition of Kalundborg, we again challenged the highly educated and experience engineers who had worked there for many years, to think more commercially and consider different ways of working.

“With a very large turnaround project just about to start, we identified an opportunity to improve both the efficiency and effectiveness of the programme, by splitting it in two.  By working closely with the local teams, we were able to deliver considerable improvements, whilst working to very tight deadlines” says Juergen Wollschlaeger.

“By the end of the turnaround we all saw the benefits of using a structured yet flexible approach and witnessed first-hand, the power of challenging the status quo” says Wollschlaeger.

Transformative Acquisition: How the Klesch Group Revitalised Kalundborg Refinery

Leaders at Kalundborg Refinery have shared their experience and insights on the transformative impact of joining the Klesch Group, highlighting the profound changes and strategic advantages brought about by the acquisition, emphasising a newfound focus on operational efficiency, innovation and commercial optimisation.

One senior executive said “In a very short time, we achieved a much sharper focus on how we operated the refinery, particularly on the reliability and availability of our process units. This shift in focus has led to a culture of continuously questioning long-standing practices and seeking more efficient and effective ways of doing things.

“We constantly ask, ‘Why do we do this?’ and ‘Is there a better way?’ which has resulted in significant improvements in performance.”

We identified 30 to 40 projects in the first 6 months, thanks to a focus on asking challenging questions and proposing innovative solutions.

Commercial and operational synergies

From a commercial perspective, the Klesch environment has driven significant improvements. “Klesch has brought a commercial mindset, focusing on the opportunity first and the costs second.” This shift of mindset has enabled Kalundborg to explore new products and markets, optimising their commercial performance and operational efficiencies.

Recruitment and organisational effectiveness

Klesch leadership also focussed on recruitment and organisational effectiveness. Kalundborg has hired over 140 new employees since January 2022, significantly strengthening it’s operational and commercial capabilities. This influx of new talent has been crucial in enabling the numerous initiatives and performance improvement projects that have been identified since the acquisition.

“This has fostered a more engaged and motivated workforce, that is better aligned with the company’s strategic goals.”

Visible impact and future prospects

The impact of these changes has been significant. Today Kalundborg has a much more visible profile in Denmark. The business knows the numbers in greater detail, has stronger KPIs, and a more robust risk management framework. This newfound clarity and focus have positioned Kalundborg for sustained success and growth.

In summary, the Klesch Group has brought a profound transformation to Kalundborg Refinery. The strategic focus on operational excellence, innovation, and commercial optimisation has not only revitalised the Refinery but also positioned it for future success. The Klesch approach stands as a testament to the value of fresh perspectives, rigorous questioning, and a collaborative approach to both risk and opportunity.

Managing Change: How Klesch the Group has contributed to the future of Heide Refinery

Over the past 14 years, Heide Refinery has undergone a cultural change that is characterised by an holistic approach to thinking and acting, more flexibility and agility, efficient decision-making and a greater sense of individual accountability. Leaders say that a change in thinking has been experienced by employees at all levels of the business and has made the company what it is today: a successful player in a constantly challenging market.

Energising for the North

As one of the smaller refineries in Germany, it is a continuous challenge to survive in an international market, dominated by large corporations. Market proximity is a key element. Today, around 75% of our sales are delivered in Northern Germany, and we have focussed our efforts on servicing the needs of our local customers.

Holistic thinking and an open culture of discussion

There has also been an increased understanding of the complex inter-relationships in the Refinery’s entire value chain. As part of the Klesch Group, employees have been encouraged to understand and take account of interdependencies – both internal and external. At the same time, the establishment of an “open mindset” has become part of Heide’s DNA. This promotes open and critical questioning of the way we do things. Employees are encouraged to engage in discussion and actively participate in change and improvement processes – both internally and externally.

Optimisation of production and crude oil selection

The shift towards an “open mindset” makes it possible to openly discuss new ways of operating our units, whilst maintaining a focus on safety. Optimising individual parameters, such as pressure and temperature, has significantly increased utilisation and availability. In addition, the processing of a greater variety of crudes has further increased the flexibility and competitiveness of our refinery.

Increased flexibility and willingness to change

Being part of the Klesch Group has resulted in significantly increased flexibility, agility, and accelerated decision-making.

Commercial curiosity and adaptability are the qualities we need to succeed. For us, this means never standing still, which will be increasingly important as our industry continues to evolve.