Was the sale of Bossard Metrics Inc in the
USA related to this deal? “The disposal of Bossard Metrics was a completely separate
issue. In America our strategic business is focused, as elsewhere, on the OEM sector and has been performing very well. Historically we also had this role as a Master Distributor selling metric fasteners in small volumes to those American distributors that did not carry or had limited Metric ranges. This led to channel conflict because our OEM business
inevitably goes after customers that are served by BMI customers, who obviously did not like that. Lindstrom was doing exactly the same as BMI - making it a logical owner for that business. They are committed to master distribution so BMI was a very logical add-on. We have agreed on future collaboration on the buying side so there will be a continued business relationship. Most important, though, is that each of us is now focusing on our core competences.”
Recent mergers and acquisitions give the impression consolidation may be accelerating in the fastener market. What is your perspective
on this? “I have been watching for this for ten years but it really has
not happened in a big way. There are still lots of people around – too many, perhaps, for my taste. Despite increasing demands from the end customer and more complexities on the supply side people still seem able to survive. Of course there will always be places for smaller, niche
players focused on a specific field or customer segment. Why has consolidation not been so pronounced? I hear
everyday customers saying they want to consolidate their supply chain relationships. They see the benefits but somehow it takes them forever to actually execute the changes. To some extent it has to do with the role fasteners play for
most OEMs. Unless it is a crisis situation there is a tendency to find reasons not do it, to postpone it. Fasteners are often a small part of the total cost of the finished product so there are often other priorities, other areas where cost savings can be generated. It’s our job to demonstrate to management that there are serious opportunities to be exploited. When we get that top- down internal approval, things happen.
Looking at the fastener industry, the question is what is out
there of interest? A lot of businesses tend to overvalue their worth, led on by advisors who lack a strong understanding of the market and, maybe, have too strong an interest in a higher price. So the expectations of some owners are very often not in sync with reality. Generational changes that are coming along might spark
developments. But what do you gain by acquiring a company where the management is not stable or committed? You have to ask whether you could win that end business without going through an acquisition. Bossard is certainly not into ‘more of the same’ acquisitions.
We are interested in opportunities like KVT – something that we don’t have, something that is complementary, something that can be multiplied for us globally, and is more at the high end technically. With our family majority shareholding, Bossard has the
privilege to be able to think in the long term. This has certainly paid off for all the shareholders. Even if the timing is not exactly right in the market we can still make the right acquisition for the long term.”
Finally, how do you see prospects for 2013? “America is still looking strong. We recorded double digit
growth so far this year. Now we have to wait and see the implications of the presidential election but so far the market, perhaps to everyone’s surprise, has been holding on pretty well. In Asia, the signs are things are coming back in a lot of key
economies. The PMIs show positive movement towards and above the 50 mark. Europe is, by comparison, very difficult. Much depends on
Germany and I keep hearing signs the market is weakening. The German car industry is still holding on, particularly the premium segment. For the mid range models it is much tougher. In Italy and France automotive is clearly not very good. Overall, though, there is still business out there: you just to
have to look for it. Where we can demonstrate to customers how to find cost savings they are prepared to listen. In fact, when the market is more challenging you sometimes get access to people that do not want to listen in the good times.”
www.bossard.com
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