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growth was strong, profits were good, the shareholders were happy. “Then in a board meeting I had to tell them that the construction boom in Spain could not last forever. We had also learnt a hard lesson from Hewlett Packard and could not afford this to happen again with any other customer.” CELO had to really invest in the international future of its business. “We definitely needed a factory in China, not to reduce our costs, although that is always good, but to be able to follow our customers and supply them in China and other dollar related markets.” The dollar issue was another hard lesson. CELO had developed strong export business to Mexico while the Euro and US Dollar were at parity. As the Euro appreciated, though, the sales disappeared. “It was crazy: we had invested a lot of time, effort and money and then it was all undermined.” Ramón’s strategy was based on three pillars: the capability to
deliver to customers in China and other dollar markets; the long term reduction of exchange risk; and the opportunity to win back business lost in Europe to imports from Asia. “The shareholders thought I was a little bit crazy,” recalls
Ramón. They said to me, we are not a big German or American multinational, we are a small Spanish family company. How are we going to achieve this? They were right, it was really difficult.” Research and calculations followed until Ramón Ceravalls was ready to present his final business plan. The only option was a
reinforce our fixings business in Spain.” Since 2005 Grupo CELO’s main motivation has been to reduce
its dependence on the Spanish market. The reality today, says Ramón Ceravalls, is that only companies, like CELO, that have developed good export business are surviving. Today the Group is clearly structured in two divisions with
distinctive characteristics and challenges. Apolo MEA sells its fixings primarily via distribution. CELO’s construction screws are supplied mainly in Spain, Germany and Northern European countries. The industrial fastener business sells technical fasteners for plastics and metals almost entirely direct to the OEM, supported by an array of design, development and technical services. Its main market remains Western Europe but it is “growing solidly” in Eastern Europe and China. Ask Ramón Ceravalls the extent in 2005 he foresaw the
Spanish market falling and he will tell you, “maybe ten percent”. In fact by mid 2011 the Spanish construction market was 60
green field start up in China. “I told them we needed to invest in 10,000m2
of land in Jiangshu province.” He also said if anything
went wrong he believed the land could be sold to recover the investment. “My father said, ‘I trust in your plan, but I trust the real estate in China even more, can you buy 25,000 square metres?’ I said ‘No’ because there was a ratio between the business investment and the land area. He said, ‘how much was needed to buy 25,000 square metres’. I said we have to double the investment and they said ‘OK, you’ve got it’.” At the same time Ramón told the shareholders CELO had to
internationalise its construction fastener business, and acquire expertise in fixings that would complement this division. “To start from scratch would have taken us years. So I proposed we bought a European company with good quality products, good knowledge of fixings and an international presence.” The trouble was times were still good with most companies achieving ten percent annual growth. Company valuations were optimistic and few owners wanted to sell. “Then we were really lucky to find MEA Bfs. They met all the
requirements. Excellent quality products, international sales, a very good and dedicated team and an affordable size for us,” says Ramón. “Selling our specialist construction range in Spain was getting tougher. Not only could we grow MEA in Germany by introducing our screws there, we could at the same time
78
percent of its 2007 level, suffering further decline since. Apolo MEA in Germany, in contrast, has “seen very good progression and continues to grow at a double-digit rate”. Spain faces challenges for years to come and consolidation amongst distribution is evident. Smaller suppliers, says Ramón Ceravalls, will find it particularly tough. His impression is the direct sales companies are growing much faster than traditional fastener and fixing distribution. CELO sales to industry continued at high levels during the first
half of 2011 but in France and Spain slowed significantly from August. Electronics faces major changes as hard disc drives are increasingly replaced with flash memory. The television sector is also undergoing dramatic change, albeit more corporate than technical, as major players spin off divisions or enter joint ventures with Asian corporations. “A stagnant market will bring more pressure to ensure good
costs and bring added value to our customers,” says Ramón Ceravalls.” Volumes are important, but so too is ensuring a good supply chain to the customers.” “It seems that everything has been invented but I am sure
someone will come up with new business concepts that reduce costs and/or increase perceived value.” “The changes will continue”, he concludes. Unsaid is the
confidence that CELO will continue to change in response, demonstrating a seemingly genetic ability to gain energy from the crises it faces.
Fastener + Fixing Magazine • Issue 73 January 2012
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