Expectations in 2025

If I leave aside the feeling that the world has gone completely crazy, and that it is best not to expect anything at all, I still think that I could expect something.

1) When I see this graph, and when it is known that in 2020 the share of EUR in transactions in the eurozone was 37% [1], then I expect that there will be no such fools who would enforce the EUR in our country. Let’s face it, we don’t have much Czechness anymore, so at least symbolically we should keep the crown.

If a roll costs 3 CZK today, and inflation raises its price to 4 CZK, then the resulting price increase is 33.3%. If I convert this to EUR, then the original price of a roll in EUR is 0.12 EUR, the new price is 0.16 EUR. But since nobody in Europe plays with euro cents, the actual price will be rounded up to 0.2 EUR. That’s a 66.6% increase. The fact that the calculation of exchange rate differences will disappear from our accounting will not really affect those low-income groups.

2) Another expectation follows from the following graphs. Although we produce cheap electricity, perhaps the cheapest in Europe, we are forced to buy it at the highest prices in Europe. Very motivating for our industry. The same is true for natural gas. We are not at the very top, but just below it, but the fall down will still hurt. My expectation is that I will free myself from the impacts on my private life and my family and focus on selling furnaces.

My natural gas supplier is ČEZ. But because it sees better ahead and probably has better information, it took on the role of a visionary and doubled my natural gas deposits for 2025, even though I had only minimal arrears for 2024. From this, it can be concluded that the impact on the industry will be essentially in line with ČEZ’s expectations.

Yesterday my new pension assessment arrived in my mailbox. An increase of 1.2%. I understand that I am a special pensioner, I have two small children and a family like a young man. But I have a slight feeling that this is precisely why I am being avenged. Of course, I have those children because I wanted them, and I love them as only a father can love his children. But for the tycoons to add thousands and compensate me for inflation, which, by the way, they caused, with a mere 446 CZK, I find it disgusting. After all, I will pay an extra 23,040 CZK to ČEZ just on those natural gas deposits.

3) Another expectation is that this year will be a significant consolidation of heat treatment into larger units. Recently, the Paolo group was acquired by the Dutch group Aalbert N.V, which gave Bodycote in America a large competitor of comparable size. I also noted the Härtha Group’s acquisition of the heat treatment plant Donau-Härterei GmbH based in Neu-Ulm or VACUUM S.P.A. in Italy. Today, it is already an open secret that Härtha is also visiting the Czech and Slovak markets, accompanied by Vladislav Galko, and is looking for opportunities here as well. I am really curious to see who will fall for this lure first.

4) Furnace suppliers have already understood that the furnace itself is only at the beginning. However, if it is to serve for 20 years, it must be provided with appropriate after-sales service. TAV Vacuum Furnaces has TAV Engineering, ECM recently acquired Vacuum SM – Service & Maintenance from Italy, or IOS in Germany. Other furnace manufacturers are gradually joining this trend. My expectation is that both companies I represent will provide these services to the maximum extent and at a level that ensures the credibility of sales. This is the only way to move forward. This also includes the selection of vacuum furnace components, their reliability and long-term functionality, as well as the production of vacuum vessels. The trend of previous years, when low-cost solutions were sought and vacuum vessels for Italian, German or French furnaces were produced in the Czech Republic and Slovakia, is long gone. Today, on the contrary, all furnace manufacturers are bringing this production under their control so that they have the entire furnace production process under control. This is not just a weldment, but a critical part of a vacuum furnace. And since we have several furnaces in the Czech Republic with a vacuum vessel tightness problem right now, I consider this trend to be the only possible solution. My expectations for 2025 are therefore also tied to the fact that both TAV Vacuum Furnaces and ECM have already completed this process and are producing vacuum vessels under their direct control, and the reliability of these devices will help improve their market share in the Czech Republic and Slovakia. And if the customer wants to be sure, he can come and check the welds already in the preparatory phase, before the protective coating is applied.

5) Another expectation for 2025 is the continuous improvement of furnace control systems. The trend is based both on the needs of users and, above all, on the growing number of directives and standards defining the requirements for traceability of all parameters. This is not only ISO 20431 or AMS 2750, but also other requirements arising from aviation or military production. The vacuum furnace will gradually have to become a device that, in addition to its own heat treatment, also provides the user with other information essential for TPM or ESG reporting. For example, the new TAV furnaces already support ESG reporting, so after the process is completed we can already see the consumption per 1 kg, or emissions per 1 kg of charge.

An example is the development of the Ipsen hybrid SQ furnace with hydrogen or electricity heating depending on spot prices on the Leipzig stock exchange. The furnace will decide whether to heat the furnace with hydrogen or electricity, without the influence of the operator.

Another category of problem is the more detailed application of some AMS 2750 requirements to the furnace control system, e.g. management of batch thermocouples and limiting their use to the number of processes while respecting temperature limits. This is a big problem when operating a furnace in aerospace conditions. Who else knows better than the furnace at what temperature the processes were carried out and with what frequency? And I’m not even talking about TPM and mandatory operator actions before starting the process. What is currently done through manual records can simply be dictated by the furnace control system. A few QR codes and a hand-held scanner are all that is needed.

I also see a great future for automatic TUS, which is a system that allows automatic control of the uniformity of the temperature field. The frequency of this test is constantly increasing as the requirements for traceability of process parameters for critical parts grow. This system solves everything in a way that minimizes the demands on measurement time and personnel and their qualifications.

6) It can be expected that due to various restrictions, sanctions or the application of tariffs on imports into the EU, local furnace manufacturers will regain their importance. It is already the case today that furnaces manufactured in Europe cannot be exported to China and vice versa. That is why, for example, ECM manufactures furnaces for Europe in Grenoble, furnaces for the Asian and Chinese markets in China. Even though it sounds scary, the world has been pushed towards total chaos. Only the furnace manufacturer that can cope with this situation will be able to continue. An example is the fate of Ipsen vacuum furnaces, when the last units were installed in the Czech Republic sometime in 2020, just before Ipsen moved this production to the USA.

7) If Europe continues with its self-destructive energy policy, it is clear that natural gas-fired ovens will have to end or their need will be significantly reduced. Although I have heard the opinion, so what, let’s raise prices! But I don’t think there is a ceiling on market acceptance. It will be a big dilemma. So the expectation is that natural gas-fired ovens will gradually be replaced by electric ovens

8) My next expectation is the transition from single-chamber furnaces to two- and multi-chamber systems. Although single-chamber furnaces still dominate, they are limited in energy consumption. Since the processes in them start and end at room temperature, the need to heat the entire furnace from room temperature to the process temperature means extra kWh spent. An example is multi-chamber devices with LPC in the automotive industry. The idea that the same could be done in single-chamber devices has long been overcome. However, there are processes, especially in the aerospace industry, where this is not yet conceivable. The same applies to tool processing. However, I personally believe that both can be converted to multi-chamber systems. The only handicap is the inability to measure the temperature with batch thermocouples. Everything else will work in multi-chamber furnaces exactly the same, or even better, as in single-chamber furnaces. My expectation is that a miniaturized temperature measurement device capable of being placed on mobile charges and with wireless signal transmission to the furnace control system will finally appear on the market. But there is another way. Just as LPC is currently operated only on the basis of model SW, such as SimVac from SecoWarwick or from ECM Infracarb, similarly, models can be developed for simulating the heating and cooling of mixed charges that would suit the purpose of charging the charge into a heated furnace. Whoever comes up with it first will win. My expectation is that this will happen this year, and that AI can significantly help with its self-learning capabilities.

9) Just as the growth of 3D printing of metal materials or the increase in the need for precision casting is expected, the use of HIP technology will also be related to this. This trend is clear and can be seen in Bodcyote’s efforts to dominate this market segment. All these technologies must coexist symbiotically. My expectation is that Czech investors will finally wake up, and this technology will spread to our region. Theoretically, it can be said that it is never too late.

10). This year, the application of ESG reporting, reporting the carbon footprint of a product, will come into effect. Large players on the market will have to require this information from their suppliers, because they will have to report it with the final product. As far as I know, only Galvamet is ready for this for now. But what about the others? The choice of a heat treatment supplier for these large players will not only be determined by price, time and quality, but also by the carbon footprint. The expectation is that this very need imposed by Europe will trigger an innovation process in the equipment of hardening plants. It will no longer be possible to operate furnaces with unecological heating systems and with high energy consumption. Atmospheres will also come into play, and ENDO as such will be under pressure from this mechanism. The replacement is obvious, processes will start moving into a vacuum. Paradoxically, what everyone is complaining about will be a great stimulus for equipment innovation.

11) The last expectation is the robotization and automation of the heat treatment process. Here I see a significant role for ECM Technology and its ECM Robotics division. ECM, as one of the few furnace suppliers, tries to deliver complete sets with a high degree of robotization. In my opinion, it is also the first company that was able to implement a robotic cart into the heat treatment line, fully replacing the existing concept of a rail stacker. I consider this to be a revolutionary solution that completely destroys existing ideas about the linear arrangement of heat treatment lines. Furnaces or peripherals can be anywhere in the hall and the AMR stacker can handle it. Its range is in the order of hundreds of meters.

What else can I say? My ideas may not be those of company management.

David Navrátil, Chief Economist of Česká spořitelna, described it here [3]. The study “Have CEOs Changed?” analyses more than 4,900 evaluations of top managers between 2001 and 2019. The results are surprising: after the 2008 financial crisis, CEO skills declined in several key areas. The new leaders are less charismatic, less strategically creative, and less focused on interpersonal relationships. On the contrary, they are more dominated by an analytical approach and an orientation to detail, which may be a reaction to the increased operational demands of companies.

The results suggest that today’s CEOs may be “survival managers” rather than growth visionaries. The consequences for the long-term development of companies and innovation may be significant.
We will see at the end of 2025.

[1] Lukáš Kovanda, https://www.linkedin.com/feed/update/urn:li:activity:7281387719866421248/
[2] Janusz Kowalewski, https://www.linkedin.com/feed/update/urn:li:activity:7280568797613146112/
[3] David Navrátil, https://www.linkedin.com/posts/david-navratil_m%C3%A1me-hor%C5%A1%C3%AD-generaci-ceo-studie-have-ceos-activity-7280460417947058176

Jiří Stanislav

January 5,  2025