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ISSUE 04-05 / 2001 |
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| PET Top-Talk | BACK to contents |
Francis Olivier,
PRESIDENT OF SIDEL, FRANCE:
"Innovation is my added value to the company"
Sometimes the world moves quicker than we
do. We at PETplanet Insider had only just finished our interview with Francis
Olivier, President of Sidel, when we heard about the friendly take-over bid
that Tetra had made for Sidel and which apparently is favourable considered
by Sidel. Thus the comments made by M. Olivier about Sidel and about himself,
about past and future have received a further dimension of current interest.
Perhaps it was a bit of journalistic good fortune that our instinct took us
to the right person and the right place at the right time.
PETplanet: With 2800 machines on
the market, 1000 customers in 100 countries, 37 applications for 37 different
liquids, crossing the EURO 1 billion mark last year, SIDEL is in an unchallenged
number one position. What, according to the President of SIDEL Francis Olivier,
are the reasons for the success, what is the secret of SIDEL`s success ?
Olivier: At present we are unchallenged
in terms of technology, in terms of shares of market. But of course PET is
a raw material with a continuous high ratio of growth since a long time. Numerous
companies enter the PET market, by themselves or by alliances. With the consequence:
there are challenges in future, different to those 10 years ago, even for
the market leader.
PETplanet: Looking back, what do you consider the secret of your and SIDEL`s success ?
Olivier: There
is no secret. But one thing is very important: from the very beginning, the
company has focused on the bottle, on customer’s requirement. The first customer
was the shareholder, the Lesieur Group, Europe`s No. 1 oilseed producer. And
therefore we had the best knowledge in terms of how to blow the bottle, how
to design the pre-form to blow the bottle. We were more knowledgeable in packaging
even than most of our customers. We do the business of our customer and, for
this reason, he is confident in us.
PETplanet: Do you remember some key events in the company’s life ?
Olivier:
The company`s activities were very marginal before PET. It was just a company
making blow-moulding machines for PVC, PE, PP. The prime reason for our willingness
to go ahead with PET was because we had no option. I had no choice. It was
either success in PET, or remaining a small company. SIDEL`s full commitment
to PET was my vision. Something may and could and had to happen. It was not
clear at all what precisely it was. We had 12 years experience in making stretch-blow machines to manufacture
PVC bottles for Evian in France. When the PET revolution started, we were
immediately successful, because our machines were well proven on PVC.
PETplanet:
The new material, your visions and SIDEL`s experience were the best pre-conditions.
But was the market waiting for you ?
Olivier: In the early days in
1979 PET was around in the US only. The rest of the world did not exist -
70% of the PET market in US - , except a little in UK and Japan, a little
in Canada. Consequently to be in PET meant to be in the US or to forget it.
We designed our machines primarily for the US. Which is not exactly a secret,
but was a very good decision. It was not easy to penetrate the US market.
Cincinatti, Nissei and Corpoplast were already there. We had to go for higher
output rates. With the consequence that the first SIDEL machines supplied
to Amoco/US were so different from all others. We won considerable market
share immediately and became leader in the US first on our way to world market
leadership.
PETplanet: How did your American competition react ?
Olivier:
They did not react, technologically speaking. They had a machine producing
five or six thousand bottles per hour and in very standard condition. Our
systems took over the market. It appeared as if they didn’t want to compete.
May be, they thought it was just a French company, very small, no problem.
After six years, we had installed approximately 70-80 machines, tailor-made
machines for special applications. It was the beginning of the end of all
competition in the US. The Americans focused on machines, we focused on bottles.
It was their attitude against our attitude.
PETplanet: Customer orientation is seen when you go to the SIDEL factory in Le
Havre, where number one activities are customising the machines and/or the
systems as well as making moulds.
Olivier: It
is the clearly defined SIDEL strategy: we outsource all production well established
over many years. The machines are supplied to LeHavre for trials under production
conditions and for customising. Then we make the moulds. Because moulds are
important for the quality of the bottles.
To LeHavre we invite our customers. All people in LeHavre on our payroll work
for the customer. I remember, when I became general manager the design department
was behind walls in a kind of castle. I opened windows and doors. I put the
customers in front of the designer. It was a kind of revolution in the 1980s
and still is today.
PETplanet:
In some companies the great inventions, design and develoment, originate from
the genial idea of a lone inventor; in other companies R & D is the effort
of an ambiguous team, which includes the customer and many others. How does
SIDEL handle this sensitive issue? Who participates in development?...
Olivier: Once
more we talk about attitude. The general attitude is not to rely on a genius
but to let your engineers free to be creative. You have to give freedom to
them, which is point one. Point two: when you have any invention, good or
bad, a small or big idea, you have to go as fast as possible to reach a stage,
that the invention can be tested by a customer. If the idea proves to be good
on shop floor of your customer, you launch machines and systems. If not, you
stop or you promote another better idea. The secret is not to have great people
with big heads coming from major universities or high schools. No, no, the
secret is to have free people able to develop their ideas, in conjunction
with others, together with universities, research for raw material and especially
with converters and customers.
PETplanet:
Does your sales force participate in development?
Olivier:
We need sales engineers for the day-to-day jobs, for new applications and
customising of already existing machinery. But being in front of technology and staying well in advance of the existing
market requires more than the common and necessary commercial desire for turn-over
and income of a company, which is prime function of sales.
PETplanet:
Any example ?
Olivier: For
instance ACTIS, the process of inner coating, which is a decisive innovation
in PET packaging of beer. ACTIS will increase the barrier characteristics
of PET and improve shelf life of the fluid. We have put ACTIS in front of
the interested customers in order to test the process, to test the market
and positively to create the market. That has nothing to do with your sales
forces.
PETplanet:
Innovation is something that has pushed SIDEL forward.
Olivier:
That is perhaps my added value to the company. It was part of my business
education. When I started this company was totally protected, secured and
paralysed by its own patents. And as soon as I launched something new, a new system, it had to be new and
it had to be a success. Every year I say to myself and my people: you have to have new ideas; any
idea is allowed, of course as long as it is connected to plastic packaging.
PETplanet:
This message of total innovation, can also be dangerous. How do you rate the
risk of too much innovation ?
Olivier: Indeed, it can be dangerous. Innovation needs control.
But for SIDEL innovation has been the driving force. SIDEL should never forget
the reasons of their early success: which was innovation. Cutting cost is prime objective of today. New technological ideas however
are the challenge of tomorrow. You can make money for three or four years
forgetting innovation. We do not enjoy the same high profitability at the
moment that we used to have. Somebody may say: because of too much innovation.
But what will happen in ten years? If my successors will continue with SIDEL`s policy, SIDEL will remain the
leader. Because all innovative systems, which we have invented during the
last two or three years, are in the basket for tomorrow`s competition. I believe: a company like SIDEL must choose between life and death, between
life with innovation including the risks involved and death without.
PETplanet: How was ACTIS
developed ?
Olivier:
So far we delivered up to 10 ACTIS systems. The ACTIS machine is a good example
of the innovative task at SIDEL. In 1996 we were trying to find new ideas to re-heat preforms. And one idea
was to use micro-wave. We started a relationship with a small company specialising
in micro-wave. After a while, we discovered that micro-wave was not the solution
to re-heat pre-forms. And suddenly, just by chance, we discovered plasma with
the same company. In other words, we were searching for something and we discovered
something else. This typically happens with big innovations - if you allow
freedom in research. The engineers were not restricted intellectually to what
they were supposed to look for. I did not instruct them to find a plasma solution.
PETplanet:
And no. 2 new development is your venture in combi-operations. The combination
of stretch blow moulding and filling of PET bottles in one unit without conveyors
and storage.
Olivier:
There is a great potential in the combi concept for numerous applications,
including and especially for the aseptic operations. With this method of aseptic blow moulding and filling, plastics will substitute
cardboard packages. I guess in ten years from now it will be something like
50 % cardboard and 50 % PET. Not only PET but also PE, which has a good potential
in milk .
PETplanet:
You bought the filling know-how from four companies, each being French and
having expert knowledge for different liquids.
Olivier:
They make filler for flat-liquid, for cabinet-liquid, aseptic liquid and viscose.
PETplanet:
They are part of the SIDEL group. Will they be on the market with their own
names?
Olivier:
We have a division called Sidel packaging system. Eventually everybody will
operate under the brand name of SIDEL. It is not so easy to integrate companies.
It is an intellectual revolution for people running their own companies, very
small, with their own mentalities, and suddenly become part of the big SIDEL. I am moving in the direction of integration, but very slowly. I want to encourage
the spirit of our new employees, to make use of their individual talents.
Steering of this process to the benefit of the group is a very fragile subject.
PETplanet:
SIDEL has promoted the two-step process for production of up to 50.000 bottles
per hour. But in case of a production of smaller numbers, is there any project
where you would recommend a one-step machine?
Olivier:
We don’t care. We sell our machines. We are not consultants, okay?
PETplanet:
The market size of two-stage machines is bigger ?
Olivier:
Much bigger. Approximately 90 to 10. In terms of numbers of bottles produced.
Not in terms of quantity of machines and value. Unfortunately for us most one-step companies have started two-step machines
some years ago. May be, we have to carefully watch the future of plastic in
the segment of smaller quantity production.
PETplanet:
M. Olivier, would you like to explain to us: what is the role of the competition
for your company?
Olivier:
Competition plays a major role, because with the competition you don’t need
to invent ideas to make your people work or to make them aware of life’s dangers.
Never ignore competition. It’s much more important to talk about your competition,
than to talk about being the best in the world. The most dangerous competitor for SIDEL used to be Corpoplast. Thereafter
it was Sipa. Today it is probably Krones. We changed our number no.1 competitor
from time to time. We are focused on them. Competition forces us to be better,
to be innovative. And referring to myself: I am a competitor. I like to play. I need pressure,
personally. I am not able to work just on my own. I need pressure to
pressurise.
PETplanet:
Coming to selling your products. You are a major player in many countries.
Olivier:
One of my early decisions was to have subsidiary, my own commercial companies
all over the world rather than agents. We opened subsidiaries all over the
world. Commercial selling and technical service must be in the hands of locals, but
directly working for SIDEL. Customers want to see the commitment of the mother
company.
PETplanet:
In some countries you opened manufacturing and assembly facilities.
Olivier:
We manufacture in Brazil, we manufacture moulds in the US. When we manufacture,
it’s the same as in France: we have a channel of sub-contractors and make
assembly and customising ourselves. It’s the same in Malaysia and in India, where we try to make a low priced
version of blow moulder.
PETplanet:
Is SIDEL globalised ?
Olivier:
Globalisation started in our business six or seven years ago, when our customers
went global, when they opened factories in Asia, in South America. We have
followed our customers, not only with sales and service, also with manufacturing. The world of today is a village. The operational and commercial quality in
machines and in service must be identical in Paris, Washington or Beijing,
just to mention some extremes.
PETplanet:
When do you decide where to manufacture and where to just sell and service
with your own subsidiary?
Olivier:
Take Brazil. It is impossible to sell in Brazil, if you don’t manufacture
in Brazil, because of the protective customs, and Brazil is a major country
in South America. It is very important to manufacture in Asia for cost reasons. Motivation for local manufacture is a mix out of cost and marketing considerations.
PETplanet:
Are there markets where you feel you are not represented ?
Olivier:
We are present in 100 countries world wide, i.e. in all important markets.
PETplanet:
I would like to quote from the SIDEL saga: “M. Olivier arrives and almost
turns on his heels.” And then you are quoted you were horrified in 1972, because
the CEO at that time was uncomfortable with selling. Is your strength selling?
Olivier:
Being in charge of this company, irrespective whether you are financial or
technical, you have to be comfortable with your customers. Similarly important
for customers is to meet a human being, a face and a human body on top of
SIDEL.
PETplanet:
Mr. Olivier, one of the last questions must be about the future of PET, the
material for packaging and of SIDEL as leading company in two-step blow moulding.
What is your personal opinion ?
Olivier:
I predict that the PET market will double in a short time.
Thanks to ACTIS and the combi systems SIDEL will continue growing with the
market. New applications will include beer, milk, fruit juices, small bottles
for soft drinks, which presently are not filled in plastics because of cost. As for myself, in 2002 after 30 years with SIDEL and 20 years in most responsible
position I guess I will change from president to adviser. Following my own
dogma: knowlegde and experience should never work against innovation. And
as my first belief is innovation, I will have to quit my position in time.
PETplanet:
M. Olivier, are you Monsieur SIDEL?
Olivier:
Yes and no. I am M. SIDEL in the perception, in the eyes of some customers
and some people on the stock market. Okay. But I also know that everything at SIDEL has been made possible because of
the talent of our engineers. I am not an engineer. I am not able to design
any piece of machinery. Therefore in this respect it would be stupid to claim:
I am Mr. SIDEL.
PETplanet:
Thank you very much.
The interview was conducted by Wolfgang von Schroeter and Alexander Büchler
in Paris on 06.03.2001
QUOTES FROM THE SIDEL SAGA 122 Please use PETplanet's
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Early 60ies: in a quiet setting among cows and moorhens, plans are
drafted, a chemical formula is invented, and the plastic era dawns in the
countryside of Normandy.
Late 60ies: SIDEL takes shape as part of the French Lesieur Group,
Europe`s No. 1 oilseed producer. Extrusion blow moulding is promoted world
wide. Exports begin. Water is packaged in light weight, transparent containers.
Time of experiments and prototypes.
70ies: dark years of SIDEL, changing ownership, simply becoming a branch
of SMTM, a large industrial group. But the process of bi-orientation appears
to improve the barrier properties and the physical strength of the bottle,
making it possible to package carbonated beverages in plastic. Bi-orientation
together with the new material PET inspire high hopes. And in 1972: Francis
Olivier arrives and leads SIDEL out of the crisis into a promising future.
80ies: end of the dark years. The PET era; bi-orientation lives up
to expectations; complete production lines are operating in countries everywhere;
and SIDEL enters the American market.
Late 80ies: SIDEL rejects Krupp`s offer, wins its independence, focuses
on innovations and exports, and marches off to conquer world markets.
90ies: SIDEL is listed on the stock market, continues to build up range
of machines, establishes presence on all continents and begins building a
Group. Acquisition of French makers of downstream equipment for filling and
packaging. SIDEL`s strategy of internal and external growth for the years
to come.
In 2000: sales of SIDEL exceed EURO 1,0 billion.
In 2001: Tetra Laval bids for Sidel
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