Corona treatment manufacturers’ ‘Must-Win-Battles’
DENMARK • With a market share approaching 85% in narrow-web, and a year on year growth rate of nearly 20%, the Danish manufacturer of corona treatment technology, Vetaphone A/S, is enjoying one of the most successful periods in its 60-year history. Nick Coombes visited the company’s headquarters in Kolding and spoke with CSO, Jan Eisby, to find out the company’s secret to success and its plans for entering new markets.
For a company with a long and proud tradition of manufacturing high quality equipment for the converting industry, Vetaphone is remarkably coy about its success and modest about its achievements, especially those enjoyed since the global crisis of 2007-8. Founded in 1951 by the father of brothers Jan and Frank Eisby, who now run the company on a daily basis with a non-executive steering Board of Directors, Vetaphone has become, at least in the narrow-web industry, the by-word for corona treatment, and lists most of the leading press manufacturers amongst its portfolio of OEM customers. These, along with direct sales to converters, accounted for more than 1000 units in 2013, and Eisby has set the ambitious target of a 25% increase for this year.
“This marks a real turnaround for us. In 2000, we knew little about narrow-web, which up to that time was largely involved in converting paper-based substrates. But, with the advent and rapid growth of filmic materials, and the increasing use of in-mould, sleeves and wraparounds, we eased into this market and have built ourselves a strong position,” he commented. Everything was going well until the financial crisis put a temporary brake on events seven years ago, although Eisby is quick to point out that it appeared to affect the narrow-web market less severely than other sectors.
“In 2009 we took a long hard look at the market with a view to plotting a strategy for recovery, and came up with what I called ‘Must-Win-Battles’. These were: change the organisation to a project driven one; keep our OEM business; and maintain our key account projects.” The plan clearly worked, because the four years since have seen unprecedented growth at Vetaphone, culminating in the company being awarded the prestigious Gazelle Prize for Growth, given by Borsen, Danish business daily newspaper. Criteria to be met include a doubling of turnover over a period of four consecutive years, of which each must have shown a profit of not less than DKr 500,000. Seen as an objective third party testimonial to the company’s performance, Eisby says that after the award was announced, Vetaphone began to attract interest from various quarters, including the Banks and investment companies.
In making his presentation to the Sales Team, Eisby has set the tone for a more active and positive sales and marketing strategy, which included the expansion of the agent network, and the conscious attempt to forge closer cooperative partnerships with OEMs and converters. “We see this as an ongoing project,” he commented, hinting that it is unfinished business that will take the next turn when eight more sales and production staff are recruited in 2014, adding to the existing 50 employees. “We’ve made a deliberate effort to reduce the age profile of the whole team, so that, as a company, we can relate more easily to the new generation of management with which we have to deal and negotiate,” he added.
The new personnel are part of an ambitious programme of investment that Vetaphone is embarking upon. This is planned in three phases over the next two years and will see a complete refurbishment of the existing building, with increased production facilities, and the construction of a new, adjacent building on land owned by the company. This will house sales and admin departments, and also provide more onsite storage facilities. Estimated to cost around EUR 2 million once fully completed, it is the largest investment plan in the company’s long and successful history, and is seen as an essential platform for taking the company forward to the next stage of development. “We have taken corona treatment far beyond what was ever envisaged when my Father started the company, and with our development of commercially viable EASI-Plasma treatment, we can foresee significant growth opportunities ahead,” said Eisby.
So successful was his ‘call to arms’ back in the dark days of 2009, that the Vetaphone agents’ conference in 2013 proved ideal timing to redefine the ‘Must-Win-Battles’. Setting keen targets for the printing, laminating and key accounts sectors of growing sales by 400% in the three years to 2016, Eisby told his sales team: “We need to build on our list of end users and OEMs, and find projects from our key accounts that challenge us and allow us to develop new products.” Finally, he said that EASI Plasma should be considered as a separate product line, and grown independently of the company’s core corona business. Suggesting that perhaps he was aiming a little high with his 400%, Eisby responded: “While European plastics production has barely recovered to its pre 2007 levels, global production is booming again – we know the volume is there, and plastics for packaging is what Vetaphone is all about.”
So where is this growth to come from? Vetaphone now has its sights on the mid and wide web markets, particularly for plasma treatment, and Eisby reports that the company is close to a technical breakthrough that will significantly change the ground rules in the flexible packaging industry. “We intend to build close working relationships with the OEMs in this market, just as we have in narrow-web. We know that our technology can significantly improve press production speed and print and lamination quality, at the same time as reducing expensive waste, and will build our growth around successful commercial installations.” Claiming to be close to an exclusive agreement with one of Europe’s top press manufacturers, Eisby believes that once the dam is breached, the flood will follow.
Back in the narrow web market, the continued growth of digital technology is playing into Vetaphone’s hands. Initially predicted to be the death knell for corona treaters, digital presses have in fact increased sales for Vetaphone, with units being required before and after printing to permit down stream product enhancement, like cold foiling. “The king is dead – long live the king! This saying could have been coined for us,” said Eisby with a knowing smile.
There is no doubt that Vetaphone will continue to strengthen its market position, partly through diversification into new markets, and partly through the innovation of new products. When the planned investment programme is completed, it will have the means to the end that Jan Eisby seeks – but I can’t help thinking it will also be the start of the next phase in the history of this dynamic company, which has a high brand image yet retains a low profile.