Cofermin Group: Trading confidence

By Laura Syrett
Published: Wednesday, 26 August 2015

Essen, Germany-based Cofermin’s dispersed yet nimble network of operatives can expand the market reach of suppliers and multiply sourcing options for buyers of speciality minerals. With the recent launch of two new businesses, the group is delving into even more niches than it was in before. Cofermin spoke to IM how people are at the heart of its reputation for transparency, efficiency and trust.

The often adapted business mantra that you are only as good as the people you surround yourself with might have been made for industrial mineral trading companies.

Opaque, niche and often in private hands, the operations of these businesses rely on experience and trust – qualities for which corporate practices can only make up for a fraction of that provided by simple human intuition. 

German mineral trading and distribution group Cofermin is a proponent of people. "We are a people business," says Tim Geldmacher, partner of Cofermin Rohstoffe, the original marketing and distribution component of the Cofermin Group. "In our business, people come first, commodities second. Our people make things happen, they are our most valuable resource that allows us to be the service provider our suppliers and customers need us to be."

Priding yourself on personnel means setting yourself a tough recruitment task and staffing the business hasn’t always been easy. From the beginning, the four founding partners of Cofermin agreed that having the right team in place with the ability to inspire confidence in customers would be key to securing long-term business contacts.  Therefore, employee engagement and development play a large part in Cofermin’s culture.

"The key is to find the right people for the job – experience is appreciated, but more importantly, the person must fit the philosophy and culture of the company," Geldmacher told IM

The owner-managed company was originally set up by former employees of Frank & Schulte GmbH – Dr Pawel Golak, Bernhard Krueger, Ralf Ossen and Tim Geldmacher. Frank + Schulte, also known as F+S, was a division of logistics and trading group Stinnes AG and a dominant force in raw materials trading, processing and distribution in the 1990s.

Based in Essen in the Ruhr region of North-Rhine Westphalia, Cofermin was formed 15 years ago with a staff of eight. Today, Cofermin Group consists of five distinct companies – Cofermin Rohstoffe, Cofermin Chemicals, EEG, M!nerals and Cofermin Chrome, employing more than 40 permanent staff and supported by a widespread network of agents and partners.


Founding fathers (from left to right): Bernhard Krueger, Dr Pawel Golak, Tim Geldmacher and Ralf Ossen set up Cofermin in the year 2000. (Cofermin)


Broad network

Like its founders, most of Cofermin’s staff have had a long history in the international industrial minerals business. As a result, the company has a large degree of diversification in speciality minerals and chemical products across several countries and industries, including refractories, ceramics, steel and foundries. 

Although it is based in Germany, Cofermin has a worldwide customer base and generates over 60% of its turnover from outside its home country.

In addition to its Essen headquarters, Cofermin Group works through its own offices in Poland, Russia, Japan and China. In other countries, including Spain, the UK, Italy, Turkey and India, the group has long-term local partners that maintain close contact with its customers. 

According to Andreas Pabst, business development manager for Cofermin Rohstoffe, "this is a very lean and effective way of servicing the markets in the best interests of all parties involved".

Many speciality minerals producers do not have the resources to set up bases in every country where they have, or would like to have, business. By marketing their products through Cofermin, these producers can reach their final customers via a model akin to a minerals supermarket – a supermarket that can not only source products but also provide technical advice and manage the supply chain. 

"We assume a large number of functions, primarily marketing and distribution, but also logistics, processing and packaging, as well as strategic market development. In this sense we see ourselves more as a service provider," Pabst told IM.

"Our portfolio consists of dozens of different speciality products from many different sources around the world. When our people visit a client, every single producer that we represent effectively participates in these visits. It’s economies of scale in marketing and distribution terms."

In an industry where margins are permanently under threat and buyers are always looking to minimise their raw material costs, traders might seem like dispensable middle-men, particularly as the growth of internet commerce has made it easier for sellers to connect with potential customers at the click of a button.

Room in the middle

But Cofermin believes that the role of the trader-cum-service provider is crucial to the minerals business, where end users need reliable, consistent supplies of highly specific raw materials, for which there are few or no substitutes.

"There was a trend not so long ago when producers and customers tried to squeeze out the middle-men in an attempt to cut costs," recalls Geldmacher. "But in 2008, when shortages were realised in a number of markets, people soon recognised how important our function is."

From a consumer’s point of view, one of the many functions a marketing and distribution service provider like Cofermin assumes is the management and maintenance of inventory in a non-speculative manner. Another function is to find alternative sources, if and when this becomes necessary. 

At the other end of the supply chain, from a raw material producer’s point of view, Cofermin promises transparent, objective and up-to-date market intelligence, which in turn means it has the ability to react quickly to changing conditions. 

And these conditions have changed quite spectacularly in the 15 years Cofermin has been in business. From an insatiable consumer of industrial minerals in the late 1990s and throughout the 2000s, China has shifted into a position of overcapacity and become a more significant exporter for raw materials, changing the supply and pricing landscape for many bulk and speciality mineral products. Developments elsewhere have seen other producing regions wax and wane in importance, but most have witnessed a drop off in demand to some extent, owing to the "China factor".

Geldmacher says that Cofermin has weathered these changes. "Business has been satisfactory for us over the years, we have no reason for complaining." He puts this success down to three "secrets" of Cofermin’s approach. 

"Number one is having good people. The second is having a diversified portfolio, a broad range of products so that you are not only in refractories or foundries but also in ceramics, glass, fertilisers and other areas."


Andreas Pabst, Cofermin Rohstoffe’s business development manager, previously worked for Andalusite Resources in South Africa. (Cofermin)

And the third secret of avoiding dents in demand, Geldmacher says, is geographical reach. "Even though we are a small company, we are very international. If the steel industry in Germany is taking a dip, this is of course not good, but somewhere else in the world, it will likely be growing, so you need to make sure you have access to other markets and regions." 

New businesses

At the end of last year, Cofermin added the two newest branches to its family tree – M!nerals and Cofermin Chrome – both of which began trading on 1 January 2015.

The additions mark the company’s shift towards bulk trading minerals, which Cofermin describes as the "classical Chinese raw materials business". M!nerals specialises in the sourcing and distribution of bauxite, magnesite, fused alumina, graphite and chamotte, collectively referred to as "refractory minerals" and produced mainly in China, for European customers. 

Cofermin Chrome, meanwhile, has taken over and is set to expand all Cofermin Rohstoffe’s chrome activities, offering chrome ore and chromite sand to a range of industries, including foundries, refractories and glass, from a variety of global sources.

While chrome markets are old hat to Cofermin, its M!nerals venture is a more decisive departure from the company’s traditional focus. "In the past we had deliberately stayed away from minerals like bauxite and magnesite and concentrated more on speciality and niche products, but the new setup fits very well with our existing businesses," Geldmacher told IM

Despite the addition of new and potentially less certain areas of mineral trading to its business model, Cofermin Group describes itself as essentially "conservative" in its approach – taking only well measured risks where the odds are on success. 

This goes back to Geldmacher’s insistence that it conducts maintenance of inventory responsibly and non-speculatively.

He cites the example of the zircon industry, where in 2010-2011, prices shot up from $800/tonne to around $1,800/tonne on perceived shortages and aggressive marketing by Australian producers, causing many suppliers to stock up on material to sell on at an inflated profit.  

"We never did that. And while it means we might not get an extraordinary advantage when the prices are up,  we also don’t fall as deep when the market comes down again," Geldmacher explains.

New generation

Aside from changes in China, since entering the speciality minerals trading business 15 years ago, Cofermin Group has witnessed some other visible alterations in the raw materials distribution landscape. One such change has been a shift in approach towards more modern thinking.

"We were certainly part of this change. It is partly a generational thing – we have a relatively youthful workforce, and whilst our oldest colleague is 80, we reach forward across five generations," says Geldmacher.

A hallmark of this new-generation thinking is a leaning towards transparency – a relative term in niche minerals trading – which Cofermin believes is central to the trust component of its business code. 

The main reason Cofermin can make this work in what remains a largely opaque industry is that it does not act as a traditional trader in the majority of cases, but rather as a service provider and agent for its principals. 

"Cofermin is the extended arm of the supplier," says Pabst, "and as such, operates along the lines of building lasting relationships between suppliers and customers, rather than making short-term gains from individual trades and transactions."  

A concern that Cofermin has started to address seriously in recent years is where the next generation of company executives will come from. It is a problem being faced across the industrial minerals industry, as fewer people train in relevant disciplines and those that do are tempted away from industrial minerals into lucrative jobs in financial services and other sectors. 

Cofermin has faced accusations of "poaching" staff, following a handful of high profile moves from other businesses to positions within the Cofermin Group. Cofermin, however, argues that it has simply "taken steps to actively identify, engage, hire and empower the people it needs to ensure the company is in safe hands in the future".


On a plate: Cofermin sources and delivers 
speciality mineral products such as calcined 
bauxite to customers all over the world, although 
its main trading route for refractory minerals is 
between China and Europe. (Source: Cofermin)

"We saw an opportunity to get some really good people and use them to head up new parts of our business," says Geldmacher.

Secondary raw materials

Aside from its two new businesses, Cofermin’s focus for the next few years is secondary raw materials – recycled or reclaimed materials from spent mineral-based products that can be fed back into the industrial manufacturing loop.

Corhart ZAC, for example, a refractory material used in glass tanks, is now an accepted recycling raw material for use in the refractories industry, particularly in monolithics, to increase abrasion and alkali resistance. "We think this can be true for other recycled materials," Geldmacher explains.

Cofermin believes that the key to unlocking this market is original thinking and a proactive approach to opening up new market opportunities – a nettle which Cofermin intends to grasp by co-designing recycled products in collaboration with partners and potential end user customers.

Cofermin Group "considers this to be the necessary modern approach – to act the role as the extended arm of the supplier/producer," says Geldmacher.