Conquering the Challenges of being a Global player
Thierry Bernard, Paris-based president and CEO of The CHRYSO Group, recently visited CHRYSO Southern Africa. In an interview with Construction World magazine, Thierry Bernard discusses CHRYSO's successes, challenges and future strategy
How did The CHRYSO Group fare globally in 2018?
It has been a satisfying year for us, with significant organic growth, several new acquisitions, and meaningful expansion of our product range. But it has not been easy in many ways – the past three years, in fact, have never been plain sailing, business-wise.
What were the major challenges in 2018?
CHRYSO faced strong headwinds when it came to profit margins for a variety of reasons – and these, sadly, are obstacles that will almost certainly still have to be overcome in 2019. In the first place, raw material costs are constantly rising along with the soaring oil price and stronger US dollar. Then, for a Group operating in several emerging markets, the volatility of the various local currencies has been exceptionally difficult to cope with. The Turkish lira, for example, plunged to a life-time low in 2018, and currency slumps have been the order of the day in many countries where CHRYSO has operations, including South Africa
What has helped counteract these problems?
Improving customer experience is of paramount importance. CHRYSO has had to focus on product innovation as well as our service offering to customers and create new and loyal customers by providing support not readily available on local markets. The South African Centre of Excellence at the Jet Park head office, for example, offers research and development as well as testing and advisory services that customers of an admixture supplier has never been able to find at the supplier’s home base in South Africa. The performance of the South African Centre of Excellence has been most impressive and - especially from the cement additives side of our operations - a major success. It operates identically to similar research and development facilities CHRYSO has established in Istanbul, Mumbai and at our head office in Paris. We are planning to open another of these crucial R&D centres in Dallas, Texas, in 2019. Even in the toughest of times, successful companies cannot afford to cut back on investments in research and development.
Cost-saving is also of paramount importance and the Group is constantly looking for ways of streamlining and improving productivity as well as minimising input costs. Capital expansion programmes continue to focus on enhancing those elements.
Despite operational obstacles, CHRYSO continues to acquire new operations all over the world. How do you select candidates when it comes to take-overs?
Over the past four years, our Group has indeed significantly expanded its presence in many corners of the globe by acquiring local businesses with strong potential. Since 2014, we have taken over new companies in areas such as Sri Lanka, Algeria, Kenya, Sweden, Qatar, the Philippines, Italy, Ireland and Portugal. We have even expanded our presence in our country of origin, France. In selecting new subsidiaries, CHRYSO looks at businesses with ‘healthy drivers’, leaders with construction dynamics and appetites for innovative solutions. On the ‘soft side’, we also look for companies where the owners have created market-leading relationships with customers: as at CHRYSO, the new subsidiary’s management must have the philosophy that ‘the customer comes first’. Apart from these shared values, we also assess compatibility and general synergy when it comes to quality consciousness and whether there is the essential enthusiasm to expand and grow. So far, these criteria have worked well and the cosmopolitan atmosphere at the Group’s leadership meetings in Paris never fails to provide positive excitement for all concerned.
Are there plans for further acquisitions and expansion in 2019?
We are always looking at creating more subsidiaries in areas where our representation can be improved and where we can support our global customers. As far as Africa is concerned, both the East African and Algerian operations have proved successful and our African distribution network keeps expanding. We are likely to invest in more production operations in Africa in West Africa in 2019 not only because there is scope for increased CHRYSO involvement there but also because of the synergy created by the area’s strong French-speaking profile.
When it comes to new products, what is in the pipeline in 2019?
Our new products will to a large extent focus on concrete – from basic to decorative. The development of new products that the market has been waiting for is one way of surviving in the worst of times. In South Africa, for example, the poor quality of local aggregates has been a persistent problem for the concrete industry. In this regard, we are planning to embrace the concept of QUAD and CLEAR technologies: new admixtures that will greatly assist concrete producers to manage low quality aggregates and/or clay-containing aggregates. This will allow our customers to add quality to their end-products and cut costs.
CHRYSO is also going to concentrate much more on the decorative concrete market in future. Since we acquired Moderne Méthode’s decorative product offering, as well as its Béton Academy training facility in France, new market opportunities have opened for us world-wide. This subsidiary has unrivalled expertise in stamped and polished concrete and some spectacular finishes which are impressing architects and designers all over the world. We have already created a Moderne Méthode department at CHRYSO here in South Africa and we intend to extensively grow the range of decorative products stocked locally in the future.
Finally, are you proud of what has been achieved by CHRYSO in Southern Africa?
Immensely happy and proud. It is without any doubt one of the Group’s most successful subsidiaries, thanks to astute leadership and quality of staff – just the spirit of the Group here is striking. It is, for me, always a joy to visit our South African operations. CHRYSO Southern Africa ticks all the boxes I mentioned in the criteria for selecting subsidiaries and we see a tremendous future for the company here, particularly if the political arena becomes more stable and the limitations of delayed infrastructural development are removed.