Hidden Champions Bonn companies are among the secret world market leaders

Bonn · For secret world market leaders, the so-called "hidden champions", the Cologne/Bonn region is one of the most popular locations. Some Bonn companies are among them. What makes these unknown champions tick - and what challenges they face.

 The Bonn-based company Klais plays the organ in the Elbphilharmonie.

The Bonn-based company Klais plays the organ in the Elbphilharmonie.

Foto: Gilda Fernandez

Except for music lovers, only a few people are familiar with the company Johannes Klais Orgelbau. The situation is different in the organ building industry: "We are anything but unknown there," says Philipp Klais, managing director of the traditional Bonn company based in Kölnstraße. A traditional company with champion status - albeit that of a "hidden champion". This refers to companies that are hardly known to the general public but set the tone in their industry. They are either among the top three in their sector globally or lead the market in Europe. They also have an annual turnover of less than five billion euros.

Often, the products of hidden champions are right in front of our eyes, we just don't know it. This is also the case with the organs from Klais Orgelbau: they can be found in the Beethovenhalle, in Bonn Cathedral, in the Schlosskirche - and the gigantic organ in Hamburg's Elbphilharmonie concert hall also comes from the Bonn organ workshop. Other examples can be found in the USA, Japan and Oman, among other places. "The exchange with other cultural landscapes is very enriching for our craft," says Klais, who is the fourth generation to run the company founded in 1882. However, Klais does not want to manufacture abroad, even though that would certainly be cheaper. "We have always been in Bonn and are connected to the city. As a training location, Bonn is ideal, and the infrastructure is also well developed.“

Cologne/Bonn comes right after South Westphalia

The locational advantages of Bonn and its surroundings have also been discovered by other secret market leaders. A total of 124 of them are located in the Cologne/Bonn region. One or two of them are well-known far beyond Bonn - for example the egg liqueur producer Verpoorten, the smoothie producer True Fruits or the photo software specialist ipLabs, founded by Bonn entrepreneur Frank Thelen. But most of them are quietly successful. With its number of hidden champions, the Cologne/Bonn region ranks second in NRW - after South Westphalia.

NRW is home to a total of 690 hidden champions, which corresponds to almost a third of all secret market leaders in Germany. No other federal state has so many. This is the result of a recent study commissioned by the NRW Ministry of Economic Affairs. The hidden champions in NRW thus play an important economic role. As the commissioned researchers from the University of Trier found out, the hidden market leaders in NRW employ almost one million people and have an annual turnover of more than 150 billion euros.

The often peripheral location has its advantages

Surprisingly, many hidden champions are located away from the metropolises. For example, the study counts twelve hidden market leaders in Bonn - and almost twice as many in the Rhein-Sieg district. "In this respect, hidden champions are also important in terms of regional policy," concludes study author Jörn Block. Companies expect to be able to produce in peace and quiet, but also to have a low fluctuation rate, since employees and employers are more dependent on each other in peripheral locations.

The originator of these theses is the management consultant and economics professor Hermann Simon, who has lived in Bonn for many years. He founded the concept of hidden champions in the nineties because he was concerned with the question of why Germany is so successful in exports. He soon came across a growing number of German SMEs that were world market leaders in their markets - except that nobody knew about them. The term "hidden champions" was born.

Hermann Simon, the "father" of the Hidden Champions

The issues that concern the hidden market leaders have changed over time, Simon notes. "Whereas in the past it was mainly about globalisation of business and innovation, digitalisation and the economic power China are now among the most important challenges." That's where the toughest competition is. From Simon's point of view, a rethink is therefore needed: "Hidden champions have to break away from their regional focus and produce where it is most profitable.“

He observes that exports are increasingly being replaced by direct investments. Many SMEs are relocating their plants or centres of excellence to their target countries. "Around 60 percent of the hidden champions already produce in China." The consulting firm Simon Kucher & Partners in Bonn, which Simon himself founded, is also on the list of hidden champions - and now has three offices in China.

Germany must become more attractive for investment

In order for Germany not to end up as the loser, it must also become more attractive as an investment location, says Simon. Positive signals are being sent, for example, by Tesla's Gigafactory in Grünheide, Brandenburg, and the semiconductor manufacturer Intel, which will soon decide whether it wants to build several factories for chip production in Europe - Germany would have good chances as a location. And China is also showing interest: "I expect a massive wave of investment from Chinese investors," says Simon - if the investors can count on enough subsidies and incentives.

Organ builder Klais wants to continue producing in Germany, but is still reconsidering its market orientation. The decisive factor for him was the Corona pandemic. "I want to focus more on Europe in the future. The pandemic showed that travel and transport to distant countries is not always guaranteed." Annually, Klais makes a turnover of six to nine million euros. To keep it that way, he wants to keep his finger on the pulse of the times, a challenge especially for such an old trade. Klais is primarily concerned with changing the way society deals with organs - for example, giving ten-minute concerts that listeners can easily weave into their everyday lives. "Churches are fantastic meeting places, regardless of religious affiliation. These places could be used much more with the help of organ music." In his view, organs are already small "hidden champions" in themselves. (Original text: Nina Bärschneider / Translation: Mareike Graepel)

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