It’s symptomatic of a down-to-earth approach to the market that has enabled it to succeed with a group of customers that tend to be resistant to trendy new titles.
Liverpool-based Bibby Distribution is part of the family-owned Bibby Line Group, which was founded in 1807 making it the oldest privately-owned shipowner in the world.
Bibby has been particularly successful in winning business with other family-owned companies where it has been able to capitalise on a shared understanding of the world.
However, Bibby Distribution is no longer a small company – sales are now exceeding £160m a year.
Chief executive Theo de Pencier points out that these figures include nine months contribution from Hammond group which it bought in 2004. Underlying growth was about eight per cent – a figure de Pencier describes as a bit “disappointing” given that growth has been higher in recent years. Nevertheless, Bibby was able to renew the contract with Nisa Today’s which has been one of the cornerstones of the business. The new contract means that Bibby will have held the business for 25 years.
De Pencier says that Hammond was “pretty close to what we thought” – a solid business producing good profits in its core activities. The takeover has also changed the balance of Bibby’s business. Bibby has focused mainly in dedicated contracts in the past while Hammond has been a multi-user operation. As a result, this year the group will get almost £40m of its £170m turnover from multi-user operations.
De Pencier is also full of praise for John Cutler, the Hammond managing director who was persuaded to stay on through the first six months of the transition process. Cutler, he says “was steadfast in doing what was right for the business”.
Looking ahead, de Pencier expects growth in the domestic distribution market to be fairly modest and is looking to other areas. Three years ago, he bought a freight forwarder which focused on European overland services. He has also bought the seafreight activities of PD Ports and says he is looking to add airfreight to the group’s skill set. “We might acquire or find a partner – we do make a good business partner.”
A major partnership deal has come with the formation of the Logistics World Alliance with four other major European independents. De Pencier has been there before with “Globalliance” which never really took off. He has clearly learned the lessons.
Between them, Bibby, Azkar in Spain and Portugal, Bartolini in Italy, MGF Logistique in France and the Rhenus group in Germany have 24,800 employees and annual sales of £1.67bn.
It has 500 sites in Europe and Asia and can use over 2.5m sq m of storage space. But perhaps most important, it has its own office and managing director – Hans-Peter Schneider who is based at Holzwickede, Germany.
It has a “One Face to the Customer” approach where a client, instead of making separate agreements with each of the partners, determines conditions and services for all logistics firms involved through his contact.
Cross-border integration of individual logistics solutions is supported by advanced approaches such as the Business Networking Platform. Developed by Rhenus, this system combines internet techniques with functions derived from Enterprise Resource
Planning. For example, an overseas customer can use the platform to monitor processes in individual European markets and to follow the development of previously defined indices.
The alliance also has a number of co-operation partners include the Seaways Group India, the Shibusawa Warehouse Company Japan, the UVK Company Ukraine, Avalon Group Russia and Elesco Europe, a provider of repair services in Europa, as well as HECC Alliance who operate a call centre in 14 languages in the Netherlands.
Looking forward five years, de Pencier sees organic growth as well as further acquisitions with the emphasis on international traffic.
De Pencier says the aim is “to buy a good business and grow it. We are not interested in basket cases.
“There are sufficient good targets to keep me busy. Vendor price expectations are now lower as margins have been squeezed,” he says.
CV
Theo de Pencier is a director of Bibby Line Group and chief executive of Bibby Distribution, the UK’s largest privately owned logistics specialist. Bibby Distribution turned over £157 million in 2005 and currently employs more than 2,700 people at 60 locations around the UK.
He joined the company in May 1999 from Danzas, the Swiss-based international forwarding and logistics business, now part of DHL.
De Pencier was managing director of UK operations for Danzas before becoming vice-president, strategic development, based in Switzerland.
Earlier, he spent ten years with NFC plc (now DHL Exel) the UK’s largest distribution business and a leader in global logistics. At NFC he held senior marketing and management posts in the parcels group (Lynx Express), transport division, where he was managing director of BRS and Pickfords.
An economics graduate and a Fellow of the Chartered Institute of Logistics & Transport and the Marketing Society, de Pencier has a wealth of industry knowledge and strategic planning experience. He is also a director of the Road Haulage Association and a school governor.
