There are 200 kilometres between Ellwangen an der Jagst, in the east of Baden-Württemberg, and Karlstein am Main in Lower Franconia. The two towns epitomise the glory and misery of the battery industry in Germany. While the Swabian manufacturer Varta is in an existential crisis, the BMZ Group is regarded as a model medium-sized company, that in May won a Deloitte award as „Best Managed Company.“

Small button cells for Apple earphones gave Varta a massive boom after its IPO in 2017. Still, when large cell manufacturers such as Samsung entered the market with significantly lower prices, the company began to stumble. Now, the severely ailing battery manufacturer needs a debt waiver from creditors and fresh equity. To this end, Varta is entering pre-insolvency reorganisation proceedings.

Such crisis scenarios are alien to BMZ founder Sven Bauer. Instead of focusing on major customers such as Apple, he relies on a broad buyer base. The entrepreneur prefers to focus on niche markets, and does not do cars, mobile phones or laptops. He once turned down requests from Motorola and Ericsson to supply tens of thousands of mobile phone batteries per month. „In today, out tomorrow, that's not a long-term strategy,“ CEO Bauer says in an interview with Börsen-Zeitung.

His attitude towards electric cars is similar. Although BMZ produces batteries for Deutsche Post's yellow e-cars, supplying large car manufacturers makes no sense for Bauer: „A car manufacturer has to do it in-house. Because the battery is the core of an electric car.“ A vehicle manufacturer has to master this technology otherwise, all that remains are four wheels and two doors. „We can only lose out in the long run,“ Bauer warns.

Instead, BMZ is focussing on batteries for garden and hand tools such as leaf blowers, cordless screwdrivers, high-pressure cleaners, hedge trimmers, chainsaws and robotic mowers, for e-bikes and electric scooters, for commercial vehicles such as buses, forklifts, cranes, excavators and trains, for medical devices such as patient monitors, defibrillators and surgical tools and for loudspeakers, scanners, thermostats and cameras. The company also manufactures energy storage systems for photovoltaic systems. Founded in 1994, the company sees itself as a provider of cross-industry lithium-ion system solutions. One example: BMZ sells a modular power system, primarily to bakeries, food retailers, restaurateurs and agricultural businesses, which similarly stores surplus power to a pantry, optimises internal energy consumption and avoids expensive peak loads.

The diversity of product and customer groups is one of the company's strengths, as its broad base reduces its susceptibility to crises. Another advantage: BMZ acts as a one-stop shop. The company not only produces but also covers the entire value chain – from project development to logistics and spare parts to recycling. This strengthens its competitive position against low-cost Chinese manufacturers. Bauer sees his company as a provider of green energy systems. The mission is to promote electrification in all areas of life, in order to reduce the CO2 footprint.

The decisive factor for the company's rise was that BMZ mastered the technological leaps, for example, with regard to higher performance: „We had the courage to fill the gap and broke new ground,“ says Bauer. BMZ is considered a lithium-ion pioneer in Europe. The company is also involved in the new sodium-ion battery cells. Series production is scheduled to start in the summer of 2025. The price-performance ratio is excellent, especially in storage, i.e. stationary batteries.

The main shareholder is the founder, Bauer. Just over two years ago, Quandt heiress and entrepreneur Susanne Klatten acquired a 20% stake in the company via her holding company, Skion. Last year, the 58-year-old Bauer handed over the CEO role of BMZ Germany to Volker Ritzert. BMZ currently employs 2,500 people who generate annual sales of more than 600 million euros. Group turnover, including non-consolidated joint ventures, is reported at just under 1 billion euros.

According to Bauer, the margin before interest and taxes is between 5% and 6%. This is the classic return for B2B business. The margin is higher in B2C. This is why BMZ wants to expand this business, for example, through increased branding.

Last May, BMZ won the „Best Managed Company“ award, which the management consultant and auditor Deloitte presents to medium-sized companies. Christine Wolter, Partner and Lead of Deloitte Private praised the „powerful mix of vision, productivity, innovation and strong value-orientated leadership“ as well as the „remarkable ability to reconcile attractive work and economic growth“.

The Group is headquartered in Germany, but production and research and development are internationally orientated: „We generally produce where the main market is,“ says Bauer. This means in Poland, Germany and North Macedonia for the European market, and in the USA for the American market. There are other plants in China and Brazil, as well as branches in Japan, Hong Kong, the UK and France.

Poland is the most prominent production location. A new production centre is being built in Skopje in North Macedonia, in which 65 million euros are being invested. Full commissioning is planned for May 2025. In the long term, up to 700 new jobs are to be created in Skopje. From January 2025, the Group intends to start relocating production from the current plant in the centre of Skopje to the new site.

The move abroad is not only related to the need to be close to the market, and the costs of Germany as a business location, but also to the shortage of skilled labour. „Low birthrates are unable to provide the necessary labour, so companies are almost forced to migrate abroad,“ says Bauer. The CEO also comments critically on the desire of many employees to work from home, which poses problems for manufacturing companies such as BMZ.

BMZ has a partnership with Daimler Buses for the development and delivery of the next generation of electric buses, which will combine high energy density, greater ranges and a long service life. City buses travel hundreds of kilometres day in and day out, always stop and go, with the air conditioning or heating switched on. „That's pretty much the heaviest application,“ says Bauer. With a view to air pollution and CO2 emissions, the entrepreneur is convinced: „Internal combustion buses no longer belong in city centres.“

Growth is financed from equity, including retained earnings. „We have not made any distributions,“ says Bauer. „Like you, I live on a salary.“ Going public remains an option on the table: „We've been IPO-ready for years," he says. However, BMZ does not need to do an IPO, which is why it has so far not gone down this route. From his point of view, an IPO does not only bring advantages: „An IPO costs energy and money,“ says Bauer. Additional overheads would also have to be built up.