Saturday 24th Sep 2016 - Logistics Manager

Ceva looks to invest

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Ceva logistics has weathered the storm, emerging rejuvenated and fighting fit, chief commercial officer Inna Kuznetsova tells Johanna Parsons.

2012 was a tough year for Ceva. The firm reported EBITDA of just €251million for 2012 compared to its net financing costs which amounted to some €284 million.

But by the end of the year Ceva had launched a cost saving initiative, and in May it completed a recapitalisation project which reduced its net debt by some €1.3 billion, cutting interest payments by over €130m and opening the way to €230m of investment cash.

This has been widely viewed as a decisive move, says Kuznetsova. “It’s been perceived as a very positive event, and we’re getting positive feedback about the outcome from customers. It’s obviously very important for them to know that we’re stable.”

In fact Kuznetsova explains that this new financial structure has empowered the firm, “The recapitalisation has given us the headroom to invest in strategic innovative projects.”

One of the latest of these projects is a massive development for its healthcare division, the City of Pharma in Italy. The dedicated healthcare distribution hub covers 20,000 sq m, and is equipped with specialist staff and facilities such as temperature control areas, vaccine handling kit and compliance certification. As with the City of Books, Ceva is hosting companies from the same industry at one location to provide visibility across the supply chain, allowing it to help customers respond to market fluctuations.

The hub has been equipped with a photovoltaic system that will produce 1,100 MWh per year, equivalent to the annual consumption of 400 homes, saving on average about 80 tons of CO2 emissions.

Further afield the firm has launched new services in its US-Mexico Transborder portfolio; a faster customs clearance option for Mexico importers with bonded warehouses as well as a new intermodal service.

And in response to demand for a transport service that’s faster than ocean shipping but cheaper than air freight, Ceva has also begun a China to Europe railway service. The 11,000 km route connects Suzhou in China with the Netherlands in Europe in approximately 28 days.

“Another impact is that it allows us to invest in the base of our infrastructure,” says Kuznetsova. She gives the example of a four year deal with IBM to set up a cloud-based information exchange for its supply network.

“We are using IBM cloud technology to update infrastructure and to allow us to be more efficient and reliable.”

All of these developments and business growth is not happening by accident. The firm is making concerted efforts to expand. “We find opportunities by expanding market share, and growing into competitive accounts,” essentially making aggressive tenders, and winning clients from their competitors.

Kuznetsova sees the last few months as a real turning point for Ceva. “Our success with the recapitalisation has opened the way for new investment and growth in our supply chain management facilities…

“We now have new access to investment capital, allowing innovation which is all part of a strategy to provide our customers with better innovative capabilities.”

And she says the 2012 cost saving drive has left the firm leaner and meaner too. “We try to keep our non customer facing operations as lean as possible. It’s got us in better shape, and fitter for business.”