Technology. Ulrich Weitz transforms simple materials into high-tech materials. And thus turned a small, formerly state-owned company into a globally successful supplier to industry. The products of his company IBU-tec are particularly well received in the future market of battery technology.
The pulsation reactor is one of those things. Engineers can talk about it for hours without laymen understanding a word. Ulrich Weitz makes it easy. "I prefer to explain it using the example of a lasagna. When you put it in the oven, the filling is in a relatively liquid state. A thermal process then adds energy to the lasagne and changes its aggregate state. The better the oven, the better it tastes in the end."
Weitz and his company IBU-tec have the best furnace with the pulsation reactor, which is unique in the world. "We own all the essential patents. With this and with our rotary kilns we are able to produce ultra-fine powders and influence their properties". The respective materials can then be processed even faster and more efficiently by Weitz' customers. "In other words, lasagna simply gets better."
Based in the tranquil Thuringian city of Weimar, the company produces catalytic materials for air purification and the chemical industry, ceramic materials for hip joints or dental products, and for electromobility and energy storage, among other things.
Each year, it treats and refines materials worth 290 million euros. The battery materials sector in particular is growing rapidly. "Because the manufacturing process for the materials used in a battery determines how durable and efficient it is," explains Weitz. "And we can directly influence this process with our understanding of technology.
There is no doubt that Ulrich Weitz has built something very special over the past 20 years. "Here in East Germany, you'll find mainly production. But you have to look a long time here for a know-how carrier like IBU-tec, which is visited by DAX companies as well as international corporations in Weimar," he says proudly.
The adventurous history of the company began 115 years before the Weitz era. Because there is travertine, a light-coloured limestone, in the region, a stonemasonry business was established there in 1885 not far from the quarry where the lime is mined. There the limestone slabs are ground and used as window sills in houses. After the Second World War, a state-owned company uses the very pure lime to produce, among other things, filters for breathing masks. In 1974, when the use of lime for this application was no longer worthwhile, this first part of the story ends.
As a result, a research and development facility for cement is being built on the site in cooperation with the Bauhaus University Weimar. "At that time, cement and rotary kilns were built here. Engineers and chemists at the university began researching how products could be set better and faster," Weitz explains. With the fall of the Wall, this episode is also over. But now the former director of the institute and a colleague from West Germany have decided to buy the site, including buildings and facilities. "That was already courageous at the time. It still looked like after the war there. The buildings had never been restored or renovated," Weitz says.
The new owners found the Institute for Building Materials and Environmental Technology - IBU-tec. They develop ideas for products in the field of materials, apply for subsidies - and if the relevant public authority considers them interesting enough, they make money available. "The catch was that no one thought about concrete applications, let alone that someone was thinking about sales," says Weitz. So until the year 2000, the company will live on government subsidies. In the economic crisis following the bursting of the New Economy bubble, however, the public sector has to economize. "Government subsidies were cut back. And because the company was heavily in debt at the time, they wanted to sell it."
It is precisely at this time that Weimar-born Ulrich Weitz himself is looking for a company. "It has always been my plan to go into business for myself at the age of about 40." After studying mechanical engineering, Weitz first worked for the elevator manufacturer Otis in Berlin, then at Otis headquarters in Paris, where he was responsible for a total of 22 factories. He then moved to the mechanical engineering company Winkler und Dünnebier. "My main task there was to get the company in shape for an IPO."
Thus, by the year 2000, he had acquired all the knowledge necessary to build and manage a company himself. "I immediately saw what a valuable asset IBU-tec had - they had developed and patented the pulsation reactor. I thought that with professional management and sales a functioning business could be built from it".
In the year of the takeover, IBU-tec with 13 employees made a turnover of about 150000 Euro. Weitz takes out a loan and buys the company. The purchase price is - of course - not disclosed. "What was important was that there was real estate on the factory premises," he says. "So I had securities that allowed me to take out a loan."
Now his management skills are needed. "The first step was to develop a promising strategy for the company in order to increase the financial resources, but also to establish a controlling, human resources or quality management system." There were plenty of scientific ideas. Separating the wheat from the chaff was not easy, he said. "I'm not a process engineer, but I was able to acquire this expertise, and the proximity to the Bauhaus University was helpful in this respect. Our first product was catalytic powder for the automotive industry. So we started making ceramic bodies for catalytic converters."
Ulrich Weitz's entrepreneurial strategy was already based on the strong Research and Development (R&D) division. The entrepreneur makes this available to his customers. This is how it works: For example, a company wants to produce battery materials for electric motors. "It then has precise ideas about the properties of the material it needs for production. So the partner knows the final result, but does not know exactly how to get there. And setting up their own test laboratory is usually too expensive. That's where we come in," explains the entrepreneur. In his laboratories, the company's experts work together with the client until the material has the desired properties.
"So the R&D contracts are ultimately our door openers. Because, of course, we want to produce the corresponding materials and substances in larger quantities afterwards. After all, the profit margins are much higher there. That's why we have continually expanded the capacity of our furnaces and reactors in recent years. And the pulsation reactor in particular, because it is unique, brings us great advantages.
Only when a product goes into the mass market and exceeds IBU-tec's capacities do clients usually invest in their own, larger production facilities. The planning and construction of such plants are then also part of IBU-tec's range of services.
Weitz has already come a long way in implementing this strategy. In 2000, the R&D division still contributed 90 percent of sales; today it is only 70 percent. And from 13 employees and 150000 euros turnover, the company has grown to 250 employees, 48.5 million euros turnover and 7.1 million euros profit.
The prerequisite for this was steady investment. Over the years, Weitz has invested a total of 33 million euros in eleven rotary kilns and nine pulsation reactors as well as new warehouses and the expansion of the site. At the same time, however, he always paid attention to the financial stability of his company. "We financed all this exclusively from the net profit for the year. Our equity ratio is still around 60 percent."
However, because it quickly became clear that growth could not be financed through acquisitions, Weitz began preparing himself and his company for an IPO in 2008. "For me, the capital market provides the ideal basis for inorganic growth."
In 2017, he decides to take this step. IBU-tec is the first company to be included in the Scale stock market segment, which was created especially for smaller companies. A capital increase - Ulrich Weitz has held 70 percent of IBU-tec since then - brings in 16.5 million euros. With this capital he takes over BNT Chemicals GmbH, a specialist for wet chemical processes. This means that IBU-tec is now also able to use liquid chemical processes to produce powders, for example for the pharmaceutical industry. "This has enabled us to expand our range of products in the field of thermal process engineering."
The company now has four locations and occupies important future markets. "This is particularly important for us because we know that the automotive catalytic converter business will not continue to grow after the diesel scandal," said Weitz. "The production of catalysts for air purification in the chemical industry, the supply of the pharmaceutical industry and above all the area of battery materials are therefore becoming increasingly important." The fact that this concept is paying off was already evident last year when growth in battery materials compensated for the decline in automotive catalysts.
Actually, they would have wanted to write another chapter of their success story in Weimar this year. After all, Weitz had built up production capacities. Equipped for a boom in demand from battery manufacturers. But with the outbreak of the corona pandemic, however, all economic activity now comes to a standstill. And the further outlook is first of all marked with a big question mark.
It is not the first entrepreneurial challenge that Weitz has to face. "During the financial crisis we had a 45 percent drop in sales in just 14 days," he says. "At that time, it was all about securing liquidity. As painful as it was - we had to lay off employees, but in this way we were still able to generate a positive cash flow even in the crisis year".
Compared to this time, the situation at IBU-tec does not look so dramatic this time around. There have only been minor modifications and postponements of the orders announced by customers for the coming months, Weitz informed in April. "The broad diversification of our company with several hundred individual projects per year and a large number of customers from a wide range of industries is now paying off.
The most important thing for him now is a consistent and open information policy towards his employees. He also ensures that the health of his employees is protected and that appropriate precautionary measures are taken. And if things do get worse? "I think that our healthy financial basis would then help us to obtain financing that would ensure the survival of the company."
The entrepreneur has therefore not lost sight of his strategic goals. "We want to continue to grow and, in particular, push ahead with internationalization," he says. In this respect he can already point to initial successes. While IBU-tec was still doing 95 percent of its business with German customers at the time of its IPO, 15 to 20 percent of orders now come from abroad. And Weitz has also already won his first Asian customer in the important area of battery materials. "Of course everything is now fraught with a lot of uncertainty, but I cannot imagine that the megatrend of electromobility will now come to an end. We have built up an annual production capacity of 3,000 to 4,000 tons here, of which we currently use only about ten percent. When this topic picks up speed again, we'll be there."
// How to invest in IBU-tec.
The issue price of IBU-tec shares in 2017 was EUR 16.50. This brought the company to a market value of EUR 66 million.
By 2019, Ulrich Weitz had succeeded in increasing sales from 16.8 to 48.5 million euros - mainly through the acquisition of BNT. The share price climbed just over 21 euros.
In the Corona crisis, IBU-tec shares lost a lot of value. In the low in mid-March, the stock was only quoted at EUR 7.70. By mid-May, IBU-tec was worth EUR 46 million again at a price of EUR 11.50. Should the company succeed in returning to its old growth path in 2021 and realise the potential growth in the field of electric mobility, sales of well over EUR 50 Millionen would be possible in the future. An investment at the current level would then be interesting.
Author: Gerd Hübner