Picking up Steam

From its historical base in the town of Zug, V-ZUG is Switzerland's leading white goods producer, and has been consolidating and expanding its market footprint since 1913. Dr Jürg Werner, Managing Director, talks to Gemma Carter about the company's innovative products and technologies, and its plans to gain a global reputation.

V-ZUG forms the Household Appliances division of the Metal Zug group, which comprises three other divisions: Infection Control, Wire Processing and Real Estate. In 2010, Metal Zug achieved a turnover of CHF 852 million (US$938 million), an increase of 7.9 percent on the 2009 figure. In addition, the net income for the group was CHF 105.4 million (US$120 million), up 70.5 percent from 2009.

V-ZUG itself also has three subsidiaries, two of which are SIBIR Group and Gehrig Group. SIBIR trades in white goods and carries out after-sales servicing, while Gehrig produces and trades in professional appliances, including dishwashers, washing machines and tumble dryers for hotels, restaurants and so on. “V-ZUG’s 2010 turnover was CHF 480.9 million (US$529.6 million),” reveals Dr Werner, “up 8.9 percent from 2009, with an additional CHF 95.6 million (US$105.2 million) coming from SIBIR and Gehrig. Our third daughter company is V-ZUG Australia, which distributes our products in Australia.”

A history of innovation

The development of V-ZUG has been parallel with the automation of housekeeping activities in Switzerland, and the company has a long history of setting new standards through its pioneering work in the areas of convenience, design and environmental protection. Dr Werner tells us how the company has evolved: “V-ZUG was established in 1913 as Verzinkerei Zug, a tinware galvanising plant manufacturing products for home, farm and construction applications. In 1915, it produced the first manual clothes washing machine, and, five years later, Verzinkerei Zug produced the first hand-operated drum washing machine.

“1950 saw the launch of the Unimatic line of semi-professional washers for multi-family households, and, from 1959 to 1962, the Adora line of washing machines, tumble dryers and dishwashers was added. A major turning point in the company’s history was in 1976, when Verzinkerei Zug merged with Metallwarenfabrik Zug, which had been established in 1887, creating a full-range white goods producer – Metallwarenfabrik Zug brought stoves and enamel, while Verzinkerei Zug brought washing and laundry room products. Then, in 1981, the company changed its name to V-ZUG.”

In 1979, V-ZUG launched the Microbraun, which was the first oven in the world that integrated microwave technology with a normal oven. “Then, in 2001, we introduced the Combi-Steam SL, a new dimension in roasting and baking,” continues Dr Werner. “In 2004, we were one of the first manufacturers to add an anti-crease steam-function to our washing machines, and, in 2007, we added the GourmetSteam function to our Combi-Steam ovens, which allows the user to select a cooking programme that does exactly what a top chef would do in his own kitchen.

“In 2008, we rolled out the Adora SLQ washing machine, featuring the world-exclusive Zug WetClean and Vibration Absorbing System (VAS). In the following year, we added a fully automatic cooking sensor to our series of Combi-Steam ovens, through which the oven detects the size and weight of an item and cooks it appropriately. Our latest innovation, in 2010, was the launch of the Combi-Steam XSL, a 45 x 60 centimetre oven which, at 51 litres, has the largest cavity in the compact oven market.”

Indeed, many of the milestones in the company’s almost 100-year history have been in the form of new innovations and ground-breaking developments in the field of household appliances. However, the merger between Verzinkerei Zug and Metallwarenfabrik Zug, which saw the creation of a full-range white goods developer, manufacturer and supplier, laid the foundations for the huge success that V-ZUG has seen in Switzerland over the last 30 years.

Swiss quality in the kitchen

In terms of how the company’s activities are organised, there are two major divisions within V-ZUG: kitchen products, and laundry room products. “In the kitchen division, we have an extremely large and complete portfolio of products, including a range that is made especially for Switzerland, and one that is aimed at the international market,” Dr Werner reports. “In the Swiss range, we have six different types of cooker that are available in two different sizes: the Swiss standard, which is 55 centimetres wide, and the European standard, with a width of 60 centimetres.

“We also produce 13 types of oven, which are available in both widths and in various glass, chrome and aluminium designs. These ovens are divided into a basic and a premium range, the basic range of ovens having a cavity space of 52 to 56 litres, together with all of the expected standard functions, but still with the high standard of quality that is demanded by the Swiss market. Ovens in the premium range have a larger cavity space of 65 to 68 litres, as well as a number of intelligent functions. We also offer a compact range of ovens, which are available in heights of just 38 and 45 centimetres, yet they still have a cavity that is almost normal-sized. These ovens could be of particular interest to the Asian market,” he adds.

“Our range of steamers includes five product types, each of which is available in two widths and with either a chrome or mirror glass design front. The products at the top of this range include our most innovative functions, such as GourmetSteam and BakeOmatic. There are over 1,000 different variations available in our range of kitchen appliances, which is quite extensive. Moreover, we are among the world leaders in terms of technology, especially in terms of our Combi-Steam ovens, with a long-standing know-how. We also collaborate with Switzerland’s best, Michelin-starred chefs, and we work together to develop new ideas and technologies.”

Patented technologies

“Besides cookers and ovens,” Dr Werner continues, “we also produce a complete range of dishwashers – over 90 variations – and then we have our laundry room products, which are divided into two segments: semi-professional and domestic. Semi-professional products are a speciality in the Swiss market, and are aimed at multi-family residences. For example, there may be a dedicated laundry room in the building, with a single washer and dryer that is used by six different families, and is running all day long, six or seven days a week, for 15 to 20 years. As a result, these machines need to be extremely robust, and, for this purpose, we created the Unimatic range.

“For the private home, we produce the Adora range of washing machines, which are available in four different types. Three of these models come with the ZUG automatic VAS, anti-mite and steam anti-crease technologies, and the top model features our WetClean function. All Adora machines come with a stand-by energy-saving function, which helps to ensure the lowest possible energy consumption. In fact, all of our laundry room appliances are designed to be extremely energy efficient – ‘A’ is the best class in Europe, and we produce washing machines and dryers that are up to 30 or 40 percent better than that, in terms of energy efficiency.”

Most of the company’s products are developed and produced in Zug, but it also supplements part of its range via product trading with carefully selected partners. “In exchange, we fabricate appliances for our partners which we deliver to them as OEM products,” explains Dr Werner. “Nevertheless, this is a minor part of our business, and the majority of our parts and products are fabricated in Zug.”

Integrated manufacturing

V-ZUG conducts all of its operations from Zug, where the company has a 62,000 square-metre site for producing its household appliances – from raw materials to completed appliance – with great precision and cutting-edge manufacturing techniques. Dr Werner tells us more: “Within our fabrication facility, we possess the capability to do everything that is required in the manufacturing process: we perform metal sheet stamping and welding; we fabricate drums and housings; we carry out surface treatment, using both paint and enamel; we have robot cells which glue our doors together; and we have eight lines for assembly. What differentiates us is that we do not have one production site for washing machines, another for ovens and so on, but we have one large site where we fabricate everything, which makes us very flexible.

“In 2010, we completed a new storage and distribution centre, called ZUGgate, which has helped to further enhance our competitiveness,” he states. “Designed by a famous Swiss architect, the centre stands out for its striking architecture as well as its functionality, and is the result of an investment of nearly CHF 50 million (US$56.9 million). Indeed, we have been investing heavily in our facilities recently, and none of our machines is more than five years old.”

Furthermore, the company constantly strives to make its appliances more practical and efficient, greener and easier to install, and it carries out its research and development activities using state-of-the-art tools. “I used to be in charge of the R&D department,” notes Dr Werner, “hence, I can assure you that V-ZUG is not stuck in the past, even if it has existed since 1913. We employ around 110 people in this department, most of whom are engineers, who utilise the latest computer-aided design and simulation methods, such as 3D CAD and FEM (finite element method).

“In total, we have almost 1,300 employees, including a wide variety of skill levels and professions. We currently have 60 people taking part in apprenticeships with us, which is quite common in Switzerland, and we also employ qualified chefs. All of our employees benefit from ongoing training and development initiatives, and these vary depending on the department. For example, for our R&D and product development staff, we provide training on IT systems, CAD and calculating tools, and our sales representatives receive regular training to enhance their customer relations skills.”

Going global

While the majority of V-ZUG’s products are sold in its home market of Switzerland, exports are of strategic importance to the company, and Dr Werner believes this is where its future lies. “As we already have a very strong base in Switzerland, being the market leader, our future growth will come from the international market. A couple of years ago, we started doing OEM exports, but we now export our own brand as well, to key markets around the world. Our current target markets include Australia, Belgium, France, Germany, Ireland, the UK, Israel, Luxembourg, Malaysia, the Netherlands, Russia and Singapore, and we are preparing to start exporting to China as well.

“In Spring 2010, we established a showroom in Hong Kong with our local partner there, Vocci Group Limited. Then, in February this year, together with our partner, KHL Marketing Asia Pacific, we opened a new kitchen showroom in Singapore. And, very recently, we opened a showroom in Melbourne, Australia – we already have one in Brisbane, but this is our first in Melbourne. So, we do not only invest heavily in R&D, as part of our efforts to be the leader in innovation, but we are also investing in new markets.” Asked to pick out the differentiating qualities of V-ZUG, which have contributed to its success in Switzerland and growth into international markets, Dr Werner highlights three key points: quality, innovation and technological leadership. “I believe you have to bring something unique to the table, if you are to succeed,” he observes, “and this is how we are still able to carry out research, development and fabrication in the heart of Switzerland, while many of our bigger competitors have had to move away. When it comes to quality, we are, naturally, ISO 9001-accredited, but our efforts to maintain high standards go much further than that, and we look at quality from an internal perspective, rather than just in terms of our products. In our opinion, after-sales service is something to be avoided wherever possible – one quality issue is one too many, this is our philosophy, and we believe it is the only way to maintain outstanding levels of quality.”

Quality first, then growth

The next few years will be crucial to the continued success and future growth of V-ZUG, as it launches its brand in international markets, and, fortunately, current market trends are working in favour of the company’s products. “In Switzerland, the trend for kitchen appliances is towards combi-steamers, and V-ZUG, as the market leader, was the company that really brought this product into the market,” Dr Werner reminds us. “We are also seeing a tendency towards this type of product in the international market, because people are becoming more aware of the advantages it offers – combi-steamers are fit for baking, roasting, grilling, steaming, braising, blanching and poaching, which makes them very flexible. Moreover, the technology allows for short cooking times and a gentle preparation method, which leads to a better preservation of vitamins and nutritional value of foods. The modern way of living calls for nutritional meals that can be prepared in a hurry, but also for appliances that suit people who enjoy cooking as a hobby, and our Combi-Steam range is perfect for both of these markets, which is why we are focusing on this technology.

“In terms of the challenges that we foresee, the major hurdle that we have to overcome is to introduce international markets to our brand, and convince them of the quality and performance of our appliances,” he comments. “This is why we are committed to demonstrating our appliances as much as possible, because, that way, people can taste the food and see how the appliances work with their own eyes, which means they are more likely to believe in the technology. This is not something that can be achieved from one day to the next, it will require a great deal of hard work in each market.”

In 2013, V-ZUG celebrates its 100th anniversary, and the company is looking forward to announcing several new investments and projects. “Alongside our plans to enter the aforementioned markets and establish new subsidiaries, we will continue to invest in our production site, where further work to improve and update our facilities is never-ending. Our first priority is to strengthen our presence in existing markets and establish a strong base in those areas, because, when we go into a market, we are there to stay, and we aim to do the job properly – quality must come before growth,” Dr Werner concludes.