AR Metallizing has been thriving, thanks to innovation
Metallized packaging and applications producer AR Metallizing has been driving consumer engagement for over 40 years. Their reputation for enabling brands to stand out from the crowd with a premium look is second to none and development of new materials using new technologies has led to some amazing innovations.
Bart Devos looks a bit like Brad Pitt. Or at least the main character in Moneyball, an American movie from 2011. In this film, Pitt plays Billy Beane, manager of the Oakland Athletics, a baseball team on a losing streak. Beane takes a radically different approach to the traditional way of scouting for new talent. Together with a young economist, he looks for statistically undervalued players and hires them. As a result, his team later achieves surprising success. A textbook example of thinking outside the box.
When Bart Devos started working AR Metallizing in 2013, he faced many challenges. Thanks to continuing globalisation, the Genk-based company was an established market leader in metallised labels, mostly for brewers such as AB InBev, Carlsberg, Heineken and Miller-Coors. An important component of this success was a special coating technology, combined with a microscopically thin layer of aluminium. This technology made it possible to produce high-quality and fully compostable labels - and thus environmentally friendly - while using less paper, from a lighter and cheaper kind. In addition, these labels shone like a premium product, which subconsciously helped to entice consumers.
Innovation is essential
Enter Bart Devos. The CEO from West Flanders spends only a few days in Belgium each month. He flies 350,000 miles a year. Yet we were able to meet him in a hotel in Diegem, overlooking Brussels Airport in Zaventem. First slide. He shows us the trailer for Moneyball. And then explains: "Thinking outside the existing frameworks is essential to remaining competitive. With the budget we have for research and development, we cannot possibly compete with the multinationals. What I do is pull people out of their comfort zone and create a spirit of entrepreneurship throughout the company."
But what does that mean in practice? The knowledge and expertise of AR Metallizing lies in coating, which gives any given material an extra function. This material can be paper, such as in beer labels. But it can also be cardboard, for example, for cosmetics and other fast-moving consumer goods. Or even a combination of paper and cardboard, or synthetic fibres. Moreover, the added function of the coating is far from limited to ‘premiumisation’. The coating can be designed to provide extra protection for the product against high or low temperatures, moisture, or even against bacteria or counterfeiting. Devos gives some examples. "Our special six-pack packaging for beer bottles looks like classic packaging, but offers extra insulation, contains no plastic and is 100 percent compostable. Another example: the ceiling of the Bangkok Airport is lined with our metallised technical textile, which protects against the sun."
Innovation in marketing
Devos goes one step further. "You don’t want to limit innovation to your product line: it should in fact be present in all areas of your business, including sales and marketing. You need to think outside the box, everywhere. This means that we must launch our product in new countries. It also means that we need to market our product better. We now sell our multilayer metallised and laminated paper as a finished product. Previously we always tailored its production to the specific needs of the customer. Based on our experience, we simplified our range to five variants and gave it a nice brand name, SilberBoard."
The possibilities suddenly seem endless. When asked whether he was not running the risk of trying to do too much at once, he replied, "In the distant past I taught marketing at the Solvay Brussels School of Economics and management. I have retained a few academic traits from this period: we studied and analysed our ideas in an orderly fashion, fitting them into models and matrices. We did the same for product use and technology, and looked at possible synergies between AR Metallizing and our parent company Nissha, such as developing touch technology for packaging."
Turnover up six fold
Thanks to the bravura of Billy Beane, the Oakland Athletics missed the championship by only a whisker in 2002. AR Metallizing did in fact even better. Thanks partly to acquisitions in Italy, the United States and (at the end of December) in Brazil, the Genk-based company now employs 450, more than five times as many as in 2006. During the same period, sales of the global market leader grew from €24 million to €155 million. EBITDA rose from €242,000 in 2006 to an expected €19 million for 2016.
Big in Japan
The excellent results of AR Metallizing have not gone unnoticed. In August 2015, it was acquired by Japan’s Nissha Group. Out of respect for their achievements, all staff members were retained. Bart Devos was even appointed as the first non-Japanese executive of Nissha since the company’s founding in 1929. He livened up his first presentation to the Executive Committee in Santa Fe with an inspirational film. Not hard to guess which sport it was about.
“Large structures do not stand in the way of a personal approach” - Bart Devos
AR Metallizing and ING
ING has long been the main banker of AR Metallizing, even after the takeover by Nissha. How does CEO Bart Devos view the co-operation? "Despite its status as a major bank, ING remains very human. Its large structures do not stand in the way of a personal approach. ING developed a ready-made product to meet our need for hedging. We don’t need to re-explain our business each time. The staff make things simple and transparent. There is a high degree of mutual trust and respect. Yes means yes." An additional advantage is the short decision lines at ING. "Our acquisition of Brazilian Málaga Produtos Metalizados, including the required approval from the Brazilian National Bank, was a very complex process. Moreover, we had little time: the decisions had to be taken between Christmas and New Year. Despite the holiday period, ING continued to provide excellent support."