Stefan Louis of Leclanché: “We plan to double our turnover annually”

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When Stefan Louis sold his company Trineuron, a Belgian specialist in lithium-ion batteries, it ended up becoming part of the ambitious Leclanché group. The Swiss group now plans to double their turnover annually. “Electric transport and the stationary energy storage of renewable sources have enormous growth potential.”

While there has been negative press about the Philips site in Turnhout, in the past, the news is increasingly positive nowadays. The gas lamp factory is reinventing itself to become the most productive square kilometre in the country. With Open Manufacturing Campus (OMC), promising start-ups can appeal to the infrastructure and people of Philips.

Leclanché is one of these promising businesses on the rise. BeAutomotive interviewed Managing Director Stefan Louis about its automotive activities.

You sold Trineuron to Leclanché less than a year ago. Why?

Stefan Louis: “I was looking for an investor for Trineuron, a company I founded in 2010. The department of my battery specialist Emrol of Malle, specialises in batteries and chargers for Automated Guided Vehicles (AGVs): self-driving forklifts for warehouses, with many opportunities for other electric vehicles, such as city buses.

The disadvantage is that the development of electric public transport and the smart city are slow, too slow for a company with people on the payroll. This is why I also started looking for investors, which I found at Leclanché, which is growing steadily through internal research, acquisitions and partnerships.

In exchange for Trineuron I got 410,000 shares of Leclanché (with a current value of approximately €3 per share).”

How much interest in automotive is there for Leclanché?

Stefan Louis: “Automotive is one of our four markets, besides professional transport, energy storage and customisation of batteries for portable applications.

We’re currently working on vertical integration to manage the entire process. From raw materials, design and production of lithium-ion cells, putting them in modules with suitable electronics, to the installation and follow-up at clients’ places. Two years ago we only handled the raw materials and cells, but now we also take care of components such as powertrains and engines through partnerships.

This is not an automotive example, but it does say something about projects we’re working on. Graciosa Island in the Azores is completely cut off from an energy supply. In the past, a boat brought oil every few weeks so the 4,500 people on this volcanic island could generate electricity. Today they have solar panel installations, windmills and a large battery. The renewable energy production has increased from 15% to 65%. The boat now only has to supply oil every few months, saving the island €2 million annually.”

Does your Belgian department play an important role in the group?

Stefan Louis: “The group’s application development is concentrated in Turnhout. As the Belgian department we are responsible for the systems R&D, which means developing everything in addition to battery cells: electronics, software, casing and modules. We provide customised engineering for external clients.

We introduced AGVs and related charging systems to the group. For example, transport specialist 2XL has a large automated warehouse in Zeebrugge. The special batteries of their fully automatic material handling vehicles are charged in less than eight minutes. This means that the vehicles of Motum in Mechelen can be used extremely cost-effectively, as they are operational 23 out of 24 hours a day. As well, the new refrigerated warehouse of Delhaize supermarkets uses 34 vehicles with cold-resistant batteries.”

Three electric buses ride with your batteries in Bruges. How is the pilot project going?

Stefan Louis: “Yes, we have taken part in the electric vehicles pilot project on the EVTecLab platform in which €4.5 million was invested. We provided the batteries and the integration with conductive and inductive chargers for three electric buses that Van Hool and Bombardier supplied to De Lijn. At night, they are charged through specially secured charging points. During the day, the buses pass over an inductive charging system at the depot, enabling them to drive non-stop with 15-minute charges.

We were recently told that the project is going very well at a round-up meeting at the IWT. There are no complaints. No news is good news.”

Is there a possibility of more electric transport?

Stefan Louis: “We will soon notice a shift towards electric buses. De Lijn is now mainly investing in hybrid buses, which will ride increasingly longer and more on electricity. We’re the right partner for this. Leclanché has the links and experience with city buses; it’s no longer a technological challenge for us.

The great learning curve is now with the bus operators because there is a big difference between buying and using diesel buses. You can let them ride everywhere, all together and on various routes. They only need to be filled up at the end of the day.

However, it’s different for electric buses. They have to be purchased and produced for a specific bus line. An express service will require a completely different battery than a city bus. A route with hills and bridges is different than a flat bus service. Finally, it’s difficult to include a charging point of 300 to 500 kWh in the road.

A shift in budgets also has to be taken into account. The purchasing department currently buys a classic bus for €250,000, and puts aside €250,000 for use, for a decade. To buy an electric bus you need €400,000, but only €50,000 of power needed for the next decade. A difficult exercise, all the more because the operational department currently requires its budget to let existing buses ride.”

How do you help clients with the new challenges of switching to electric mobility?

Stefan Louis: “We take a good look at how users deal with products and services. What are the small advantages clients are looking for? What are the pitfalls they’re experiencing? How can we solve them? Then we help them find solutions.

This is how we make our knowledge available to clients, such as the best way to charge, which has a major effect on lifespan. For example, did you know that all batteries wear out prematurely because of incorrect use? Or do you know the best way to recharge a tablet? It would be handy if a device informed you of this.

Our own cloud solution compiles data of the batteries, analyses, draws up reports and provides advice on the most efficient asset management method.

This asset management is currently curbing the sale of batteries. Again, De Lijn is a good example: in the past, a buyer of the De Lijn would order 300 buses annually following the same procedure as the previous year. If they chose electric transport, they would need to think about each bus separately. If we succeed in removing these obstacles, sales should follow automatically.”

Youre expecting to double your turnover over the next two years. How realistic is that?

Stefan Louis: “The European market for city buses is slowly but surely on the rise. At the same time, things are moving fast in China, where they’re buying thousands of electric buses. As an SME we would not be able to tap into this market, but we can with Leclanché. We’re already active there and we will not ignore this market.

The energy storage market will also grow, especially because I feel that people finally understand that we need to switch to renewable energy. This cannot be done without storing surplus energy for periods when less energy is generated. Batteries are immediately available and quickly go to maximum power and back. Thanks to such advantages this market will grow tremendously.

We’re also seeing growth in the turnover of Leclanché, plus 69% up to CHF 18.2 million in 2015. We’re realistically heading for twice the turnover in 2016, aiming for a production volume of 100 MWh by the end of the year. When we double our turnover again in 2017, we’ll have a profitable business.”

Are you also planning to hire more people?

Stefan Louis: “Thirteen people work here: experts in electronics, software, quality and project management. We’re still looking for two extra people. At the end of 2016 we want to have five extra employees to start production of batteries for self-driving forklifts. The goal is to fully produce 1,000 batteries annually. They need to be produced somewhere, so why not in Belgium, at the Philips Open Manufacturing Campus (OMC)?

Here in Turnhout we have the best infrastructure and knowledge available. If we need a production engineer, then I can cross the street and walk into Philips. We even took on an employee from Philips with specific production knowledge.

Labour costs are reasonable here is as well. We are quite competitive as compared to Switzerland, where the head office of Leclanché is located. Of course, it’s difficult to be more expensive than the Swiss.”

Batteries have become a competitive market. How does Leclanché distinguish itself?

Stefan Louis: “Leclanché employs a total of 160 people and is growing fast. Upon its foundation in 1909, it was the inventor of the primary battery. Since 2006 it fully switched to lithium-ion. In 2012 the company opened its first production line. We are now completely restarting with a new strategy: vertical integration.

Our competitors are either cell manufacturers or integrators who buy cells and make batteries. But we do everything, even more so because the electronics department needs to understand cells in their entirety for efficient operation.”

What role can Belgium play in automotive?

Stefan Louis: “A country like Belgium cannot excel at everything. The government understands this and approaches this the right way. Other countries are surprised by the advantages created here in R&D, among others because of the advance levy discount for research assistants. I managed to clarify this during my presentation for the group, as it’s an important reason for establishing engineering here.

In addition, Belgium invests quite a lot in the structure of universities, research institutes and companies, and we’re reaping the benefits of this. For example, we cooperate closely with the VUB and other universities, with Flanders Make and Agoria. Their structures work.”