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European growth
Page 24
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Platinum Equity has relaunched Hays Logistics as ACR Logistics but does it have a
future? Jennifer Ball reports.
In November 2002 Hays Group was having a tough time, going so far as to issue its second ever profits warning. So it came as no surprise that weeks later the logistics division, which accounted for 40% of the group's turnover, was put up for sale, leaving Hays to concentrate on its core recruitment business (CM 28 November 2002).
There were many rumoured potential buyers, including Exel and Deutsche Post, but it was over a year later before US financiers Platinum Equity snapped up the firm, relaunching it as ACR Logistics. We won't bore you with the reasons for the new name (suffice to say words like "ambition", "commitment" and "results" are bandied about)—what everyone wants to know is whether the firm can compete in an already difficult marketplace, particularly when its rivals have an 18-month head start.
Chief executive Xavier Urbain is confident that it can make up for lost time; he's relying on his experience as executive director of Hays Logistics and senior positions at a number of other European haulage firms, including France Distribu tion, to challenge the big hitters. He aims to increase turnover by more than 10% year-onyear; the firm has already secured important contract renewals with major clients Waitrose and Scottish Courage.
He points out that while Exel and its new acquisition Ttbbett & Britten are the largest players in Europe they hold just 4% of the market: "This is a small share for a top player in any market. Europe is a fragmented market with many opportunities and we aim to win a 6% market share through concentrating on our core activities and providing a collaborative supply chain — being proactive is the key to customer retention."
Urbain doesn't believe that ACR needs to expand globally to be successful; he sees plenty of growth opportunities within Europe. He plans to develop the business by strengthening its European presence: primarily in Germany and Spain, followed by Central and Eastern Europe (Poland, the Czech Republic and Hungary).
The company will focus on four key sectors: fast moving consumer goods (FMCG) retailing; FMCG manufacturing; automotive and industrial; and telecoms and technology. "ACR Logistics has an approach that goes above and beyond simply providing economies of scale and lower costs," says Urbain. "Our objective is to provide added value for customers by turning logistics into a competitive advantage and a means to grow in their respective markets. We develop solutions for our clients which are based on measurable results."
However some analysts are less optimistic about ACR's prospects. John Manners-Bell of consultant Transport Intelligence agrees that Eastern Europe will provide a strong growth area for ACR, but he believes it will find these new markets challenging. "It's a year or so behind [its rivals] and hasn't been helped by 18 months of disruption and a level of uncertainty about its fut ure, which would have shelved strategic planning," he said."Making acquisitions in countries such as Germany will help it get back in the competition rather than trying to grow organically in these regions." •