van leer packaging worldwide - the total account
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8/10/2019 Van Leer Packaging Worldwide - The TOTAL Account
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Rishi Kumar | Ashesh Agarwal| Sharad S| Ashish Jain | AbhilashChandran| Anuj Vir | Akshay Dhar
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-Founded in 1919 by Bernard Van Leer-Started Manufacturing steel drums in the Netherlands in 1925,launching into closuresystems in 1927
-In 1930s became the global leader in both the segments
-Expanded its product lines to flexible packaging, using paper and plastic materials in 1960and 1970s which facilitated penetration into consumer goods sector -In 1992 Van Leer acquired 4P from Unilever(packaging subsidiary)
-Van Leers worldwide sales reached NFL 3,958 billion(approx.$2.5 billion) in 1994 -Profits soared to NFL 67 million-Van Leer held 25% of the worlds large steel drums in 1994
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Corporate RelationsExecutive Board
STRATEGIC BUSINESS UNITS
IndustrialContainersNorth America
4P FoldingCartons &Tubs/Lids
Latin America
4P ConsumerFlexibles &Films
Moulded FibreProducts NorthAmerica
FlexiblePackagingEurope/NorthAmerica
Steel IndustrialContainersSouth Europe
IndustrialContainers UK& Ireland
Fibre & Plastic
Containers &IBCs ContinentalEurope
Steel InContain
Mould
Fibre E
Closures Africa For East Austrand Zeala
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Joined the company in 1968 and held executive positions in Argentina and Brazil
Chairman and CEO of Van Leer since 1992 and an executivesince 1989
Served at general management role in Akzo Nobel, between
Willem de
Vlugt(b.1942)
CFO of Van Leer since 1992 Served at managerial positions at Air Canada, Alcan, Canad
Corp in both Canada and Switzerland Also served as VP finance and treasurer of Le Groupe Video
Andre Saint-Denis(b.1944)
Member of the executive Board since 1995, responsible fodevelopment of consumer packaging business
Headed the strategic business in Flexibles, including Van Leers
strength films, metallised products and industrial flexibles,board
Francisco de Miguel(b.1944)
Christian Betbeder(b.1942)
Appointed to the Executive Board in 1995 with a special brindustrial packaging activities of Van Leer
Joined Van Leer in 1968 and held several major positions inLatin America
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CLAUDE HOAREAU,Business unit Manager,
France
PAUL LAVISI
TEN CATE,International Accounts
Manager, NL
Mail from TOTAL to
reduce unit pricesof Steel drums inFrance
6% ofexpectedsales from
TOTAL
JEAN CLAUDE DPurchasing
MICHEL CHOUAInternal Consulta
HAL SWINSOTotal North Amer
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Total Fixed assets are 71% of capitalemployed
Net Working Capital is 29% of Capitalemployed
NWC-TA Ratio approx. 39%
PAT is low at 2.07% of Net Operating costs are 49.74% Lot of money lost in interes
close to 824,143,000 NLG fiBanks through loans
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IND
ROCE is 2.22% in 1993 but in 1994 its 4.03% ROCE isimproving over the years This may reflect an improving
macroeconomic climate
Steel Drums account to 74% of InPackaging
Manufactured close to client site Van Leer had 25% of the overall s
market
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Massive exposure to all markets; from large corporations to small local players were its clients Numerous Suppliers, small local drum makers; 213 litres and 150 million unit market in 1995 50% OF COST OF MAKING A STEEL DRUM WAS STEEL AND HENCE PRICES WERE CLOSELY LI
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37%
20%
12%
31%
Market Share of steel drummanufacturers in Europe
Van Leer Blagden Gallay-Mauser Others
Van Leer was the onlglobal manufacturer iworld
Price of steel was risisurpassed $450/tonthreshold
Shot up to $590/ton ifinal quarter
Plastic and Fiber packbecame viable substit
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Drums store and facilitate transportation of goods Customers had improvised their logistics
Clients demand lower prices and better quality
Now:
Difficult
Manufacturing process was widely accessibland easy to imitate
Earlier:Easy
Organizations global presence assuredcustomers with standards of quality, serviceand responsiveness that local manufacturerscouldnt offer
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RATIONALIZERationalize the packaging material
CONSOLIDATIONConsolidating their purchasing into the hands of fewer suppliers to achieve price
advantages
TRANSFER
Transferring production to cheaper and emerging economies
Management sensitive to the following actions of global client companies -
Result would be a lower demand for steel drums in parts of Europe and asmaller number of competitors.
Requirement of an efficient cooperation among the business units of Van Leer
on international contracts.
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Overview
9th largest oilconcern in theworld and one ofthe largest Frenchcompanies
Sales reached $27billion in 1994
Presence in 5continents and 80countries
Operations in oiland gas extraction,refinery anddistribution, crudeoil and oilderivatives, etc
Business Departments TOTAL Lubricants
Automobiles
Devoted to sellingautomobilelubricants
IndustrialLubricants
Devoted to sellingindustrial lubricants
MaP
Selservsouintepricdep
DivPacMaMa
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WorldwideReengineering
Effort
ImplementingPurchasing
Strategy
GlobalizePurchasingActivities
Company took the initiative of consolidating international purchasing so thatthe company could reduce the types of drums bought, thereby standardizingand cutting costs
Instill genuine collaboration between TOTAL and its suppliers in the form ofadvice, assistance, technical information and R&D
Delvallee and Chouarain would implement the purchasing strategy as well asnegotiate with the major suppliers.Every supplier would have to:1. Offer goods on an international scale
2. Factor in TOTALs international standards requirements 3. Keep track of sales volumes and negotiate globally via a single representati
Globalization came after a purchasing price had been reached locally based olocal competitive conditions and the establishment of personal relationships.
Global contracts would sometimes obtain significant price reductions Market conditions in other markets could provide better local conditions than
global purchasing would obtain
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The proposal from Van Leer has identified everything that TOTAL was seeking to obt1
Assess more on the TOTALs needs, demonstrating to TOTAL that Van Leer has a clearunderstanding of their situation2
Establishing a cumulative discount policy on all purchasing in Europe, the problem ohigh unit costs in France and lower costs outside it will be improved
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Quality Assurance programs and Drum Recovery and reconditioning program, theirquality of services can be collaborated by both TOTAL and Van Leer.
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