Bobst Flexible Materials: the first hundred days

One hundred days after the final deal was signed that brought Valmet Converting into the Bobst fold the Group took drupa by storm with 12 world premieres from the flexible materials and folding carton divisions. But just what were the ups and downs of the first days of the much enlarged group?

"In general we are very satisfied with the progress of the integration. I have to say I have been really surprised with the very positive co-operation of the ex-Valmet people," said Claude Currat. "You hear all about other acquisitions and mergers difficulties, especially concerning those with cultural differences, so it was much better than anticipated thanks to the excellent preparation and time available during the negotiations."

"Last November we launched 29 working groups, for example product definition, IT and preparation for drupa. The results have been good, quick and produced with enthusiasm." Why exactly did he think that people had reacted so well? "Speaking to them I think it was because they realised they could never be part of the core business of Metso – paper. It is quite the opposite to integrate into a group where the core business is converting and packaging. It was suddenly really nice for them to work within a group that understands their business."

And the downs of the integration? "The only thing was the overlapping of products between Rotomec and Schiavi." (Gravure and flexo press builder Schiavi was already part of the Bobst Group before the acquisition of Valmet Converting, which included the gravure specialist Rotomec.) "But we put people together and asked them to work on solutions."

"Of course Rotomec was delighted to hear that it was to be the centre of excellence for gravure and Schiavi was disappointed," he revealed honestly. "But now since the beginning of the year Schiavi has seen success with flexo and the attitude is changing there.

"Basically if there is logic in what you do employees will follow you."

Just how far has the integration gone? "The product lines, communications and R&D and service is done. There is real focus on customers and creating added value for them." Throughout the integration process the customer was kept to the fore- front. He explained: "For every product line we took two or three people out; we told them we would protect them and that their job was to focus on the customer. If you like, it was a seamless transfer.

"Now we have the internal integration. That is the harder task. How do you take the best synergy and the best practice in our organization? It is more difficult in several ways and will take much longer to achieve. The people involved in this will not see the result of their work so easily as with the product integration. Therefore there may not be the same satisfaction as during the first stage of integration."

IT importance

Could he give examples? "Take production. Schiavi is making rollers. Rotomec is making rollers. Should we centralize? Should we outsource? We have many subcontractors for all the different companies – all need examining. On the IT front we are all different. We can exchange files, but we have different CADCAM solutions, for example. It has to be sorted out if we have to interface with say China or another division. We have to get all the users in the company together, work out what is needed and then get the IT specialists in. If you do it the other way around you are likely to get a white elephant," he added with a wry smile.

How exactly are sales and marketing being handled in the new group structure? "The main interface is the Bobst Group Marketing Organisation. The product groups bring the support. Naturally if the customer is in the same country as the plant then they go direct. Our aim is to make it easy for the customer to reach us. The Bobst marketing integration has not been nearly so difficult – this is an area where you can never have enough people," he stressed. "In fact the plan is to increase the sales, marketing and service capabilities. The vision is that if we want to survive in Europe we must provide added value solutions. We need a lot of service people – a good service engineer is so much in demand. He is bringing value to the customer," said Claude Currat who is an engineer and spent several years in the plastics machinery business before joining Bobst 10 years ago. Around 12 years of his working life were spent in North America where he took an MBA.

Close to customer

So skilled service is clearly an area very close to his heart. "Someone who can bring more productivity to the customer is worth a lot to the company. That's why we want to develop more in this way. We need electronic and process people – people who are able to look at machines and see just what it takes to get more production efficiencies. It goes far further than mechanics.

"The other challenge is to have these people close to the customer. For example in China the customer doesn't want to pay for someone from abroad. It has to be Chinese people who can do this. We have 100 people working for us in China; we have manufacturing there. They have to find people to learn about production. It is why we make only the entry level presses in China."

Are margins improving in the sector? "Margins are a problem in some areas because of a multiple number of small producers and suppliers doing crazy things to survive, "he revealed. "With the niche products like gravure presses, metallizers and the big Atlas machines and special coaters there is not the same problem. But there is enormous pressure elsewhere.

"It's a war out there for slitter rewinders. But we will get the differentiation in service for the customer," he added, returning to his vision. "Our customers are much more educated today. They know the cost of operation; cost of a square metre; labour costs and raw materials. They are much more sensitive to efficiencies and waste reduction. And we can help them make the difference. A lot of the smaller guys don't offer that service. They just sell a machine and then leave the customers on their own."

Does being part of the larger group offer any cross divisional benefit? "Very much so. There are common technologies – for example gravure, flexo, cutting and lamination. We have technical committees that meet formally. In flexo, for example, the inking process is the same for films, cartons or corrugated. And on the marketing side we have meetings by industry. For example in the tobacco industry we provide equipment for producing cartons, outer cases and films. So from both a marketing and technical point of view we are able to focus on the different market needs,

"The beauty of Bobst is that now we can serve all the needs of the large converters."

Had he any examples of this synergy in technology and marketing? "The Apollo paper sheeters have so many leads from the folding carton equipment people in the USA. Before they were on their own. And Bobst Champlain is interested in looking at the robot from Titan for application in the flip-top carton area."

R&D is clearly important in his eyes. "We invest some five to six per cent of our turnover in R&D. And we will sustain this because we believe in the importance of innovation," he said.

"This is the only way we could have come out with 12 innovations at drupa. No one else in the field has as many at this exhibition. During the integration we made an inventory of all the development work in progress. Then we had some strong discussions as to which one we would keep. We had to identify overlapping projects, chose which to go ahead with and then we doubled the effort – integrating the ideas together. And that is why we have come here with these seamless innovations. At the end of the day everyone feels they have contributed."

Was he optimistic about the future of the integrated company? "Based just on the first four days of drupa the next few months will be even busier. We are already getting the feedback that this show is going to be extremely successful for us. If this is the case we may well have to ask questions on capacity. The worst thing that could possibly happen to us is delivery times being extended."

This begged the question about moving some of the capacity to developing countries. Bobst already has manu- facturing facilities in China, India and Brazil. "The ideas development process will be maintained in Europe. But we have to be realistic about China. The bulk of the market is just not accessible. You can buy a gravure line that will run at 60 per cent of our speeds, but at a price three or four times cheaper. We cannot and shouldn't compete in those markets. We have to identify where we can compete and do that well. For example there is a big market for entry level, good quality machinery and service there."

Drupa success

Claude Currat was certainly proved right on the success of drupa for the group. As the show closed Titan reported the sale of four SR8 slitter rewinders to customers in Turkey, India and Columbia. The SR8 on show went to Amcor Flexibles and a Titan CT600 auto turret slitter displayed nearby at Bobst Germany was sold to a new French customer.

Four of the new Rotomec-Schiavi RS 4004 short run gravure presses were sold to Argentina (two), Mexico and Turkey. And four other gravure presses were also sold during drupa. Schiavi also sold two of the new CL660 Unica coater laminators to India.

The next 100 days could prove even more interesting for the newly expanded Bobst Group.