Chemistry & Life Sciences

Helping Customers Meet Market Requirements

Interview with Azelis’ Anna Bertona about Success Factors in Specialty Chemicals Distribution

02.04.2018 -

In the past decade, specialty chemicals distributor Azelis has transformed from a decentralized European business into an integrated group with a turnover of €1.8 billion and facilities in 42 countries worldwide. The owners of the Antwerp, Belgium-based distributor, private equity company Apax Partners, support Azelis' strategic focus on growing the business through continuously developing its product portfolio and extending its global reach. The expansion covers each of the major regions: Asia, Europe and in particular a transformation in Americas. However, Europe remains an important region for Azelis. Michael Reubold asked Anna Bertona, the company’s CEO and president Europe, Middle East, Africa (EMEA) about her strategy and approach to steer market teams in the region with a particular focus on the company’s principal development activities.

CHEManager: Ms. Bertona, the change of ownership in March 2015 to Apax Partners has seemingly accelerated the development of Azelis into a global distributor. What role is Europe still playing in the company’s strategy?

Anna Bertona: Being a global business that is built on technical expertise, business that is very much diversified across multiple market segments in life science and industrial chemicals, enables us to easily share and build upon this expertise. However, Europe remains important as it is our largest region in terms of sales, customers we serve and people we employ. In addition, it is where our roots lie, it is the region where Azelis was founded and where it is headquartered. Last but not least, Europe is where many of our partners and principals reside, and based upon our successes with them in EMEA, many principals have extended their agreements with us to cover APAC; they trust our capabilities in technical service, compliance and overall high quality standards that they uphold themselves.

Furthermore, Europe is the region where a lot happens that influences the rest of the world’s economy; this is where competitive landscape is very dynamic, where some of the environmental and consumer trends originate from, where some of the important new legislation is passed on, to name only some. Having said that, it is important to remember that we all operate in the global economy today where one region cannot be seen independently from another. Being a truly global company, we closely follow all developments and we share learnings and best practices across all regions, working all this into our business strategy. Azelis brings innovation to all markets that we serve; the most recent example of this is the biodegradable, customizable face mask that won the innovation award at SCS Formulate in November 2017.

Before talking about the presence and future, could you briefly summarize the key steps Azelis took to grow the business specifically in the EMEA region?

A. Bertona: EMEA is a dynamic market that is increasingly ready to innovate, probably much more so today than three years ago. We are continually investing in our commercial teams and our technical capabilities, which are crucial in being able to support our customers and principals in that innovation. We strengthen our presence and distribution footprint across all of EMEA wherever we see strong opportunities in selected segments. We are constantly fine tuning our delivery service to make it more efficient and regularly measure supplier and customer satisfaction as this is always important to us. This enables us to better define targets with principals and to improve service to our customers. Improved performance towards our suppliers has a positive effect on our partnership with customers and vice versa. The world of distribution is an ever changing one. As a distributor, you never stand still and are always focused on the next step.

EMEA is a quite diverse region in terms of market size, maturity, and demands. Can you operate in this region with a one-size-fits-all approach?

A. Bertona: One-size-fits-all would never work here. As a matter of fact, it would not work anywhere in the world of specialty ingredients. We believe in a well-balanced mix between local and regional. Local autonomy in the countries is supported by regional marketing and infrastructure services. Remaining local is very important however as it enables us to stay close to our customers as well as continue to focus on country dynamics and developments. The local aspect of our business is significant for different reasons. Not only do the languages and laws differ from one country to another, the implementation of legislation can be different too. Local tastes and needs are something we need to have solutions for, which we can do only when we have a true presence in each market. For example, bread in France is very different to bread in Sweden, and customers in Greece will need a very different range of skin protection products than customers in Norway. Remaining truly local throughout Europe is the only way to ensure we are the best local champion and have the right solution for that specific market.

How do you respect the differences of the geographic and market areas in your operating strategy?

A. Bertona: On the other hand, we benefit from our large scale as we can leverage the fact that we are present in a large number of countries in Europe. We coordinate lab activities across the regions, we share best practices and knowledge, and we complement one another’s capabilities and skill sets. This often translates into solutions for our customers that otherwise would not have been possible.

What do you think are the strengths of Azelis in the EMEA region, and where do you see specific challenges?

A. Bertona: If I was to simply summarize Azelis’ strengths in EMEA, I would say: 1) highly educated people, 2) large laboratory footprint, 3) broad customer base and high customer satisfaction, 4) excellent compliance and regulatory knowledge, and 5) state of the art infrastructure. Let’s look at it in more detail:

Over time we have invested a lot in the laboratories across the whole Azelis group and in EMEA specifically. There are 24 labs in EMEA, each dedicated to a specific market segment that supports our customers and our principals. In addition, we have some of the best people in the industries we serve who have built a lot of knowledge and expertise and who are highly appreciated outside Azelis too. They are often lecturers at universities or at prominent industry events. This is one of our strong points in Europe.

Furthermore, it is the lasting partnerships with our partners, quite a few of which have existed for 40+ years. These have been based on our value proposition: quality of our people, our capabilities, connectivity to the local markets and customer intimacy, long time service and support we provide to our customers and principals alike, and so on.

Our size is another one of our strengths. Over the years, we have built a solid pan-European presence, not only in Western Europe, but also all over Eastern Europe, a true foot on the ground in all the countries we serve. This gives us an opportunity to leverage prospects in various local markets, combined with the scale of the international organization. This gives us a good competitive advantage over local champions who, although they can be knowledgeable and experienced, may not have the funds to invest and compete against big market players. An example of this is that we can do REACh registration which local players may not be able to afford. We can also invest in company-wide digital tools and platforms, for example ERP systems, CSR programs and corporate initiatives alike, because we are not doing it for one country or even just for Europe only, but for the entire company, thus sharing the investment costs across the regions.

We do all we can to ensure a high quality, stable service to our partners however we do not always have all the factors in our hands. For example, from time to time there can be a raw material shortage, often as a result of macroeconomic movements or individual production issues of our suppliers, and this is something we need to manage when it happens. It is not good when it happens, as we do not want to disappoint our customers, but we try to have mechanisms in place that will minimize any potential negative effects of this.

According to Azelis’ CEO, Hans-Joachim Müller, the business philosophy is centered on technical services. What does it mean and what does it take to provide these services to your principals and customers on a high level?

A. Bertona: It means that we need to have highly qualified people with the technical know-how to understand our customers’ requirements and to provide solutions to their issues. All our sales force have solid technical backgrounds, often with PhD or master’s degrees. They are dedicated to their market segments and typically have several years’ experience in the segments they serve, helping them to understand better the issues our customers are facing. Our laboratories play a critical and dual role in all that. On one hand, we train our people in the laboratories, enabling them to stay up-to-date with innovations from our principals. On the other hand, we also give internal training on market trends and end-product manufacturing; for example we teach our sales staff how to actually mix paint, and all of this helps our people to understand our customers’ issues better.

This strong technical expertise perfectly supports our lateral value chain approach. We want to be a full solution provider for our customers. We want to be able to provide our customers with the ingredient they need for their production process. If we identify an ingredient that is currently not in our portfolio, we will then identify suppliers of such ingredients and we will actively go after them in order to ensure that full and complete lateral value chain. Seeing that our customers value this only gives us more reassurance this is the best approach we can have.

Innovation is a key growth driver in the specialty chemicals market. How can distributors effectively trigger innovation on the supplier and the customer side?

A. Bertona: A specialty distributor has the advantage of offering a lateral value chain to its customers, a basket of synergistic products. We offer products from many different suppliers and also have the knowledge how these substances and ingredients interact best with each other, thus helping our customers to meet some of the most stringent market requirements. Closely following the market developments ourselves, we often proactively offer formulation solutions to our customers and this is highly appreciated as it shortens their R&D and time-to-market. Not only have we thought up something new, but we have already tried and tested it before offering to customers, which then makes their process much shorter and more efficient. The distributor makes new technology more accessible for smaller customers who would not normally be served by big suppliers directly.

Prime examples of this expertise leading the way are the innovation awards Azelis has recently won: innovation awards at PCHi for three years in a row (China), gold formulation award at Cosmetagora (France), product innovation award at Ringier Technology innovation awards (China) and the Laura Marshall innovation award at SCS Formulate (UK), CFIA Ingredient Innovation Trophy (Morocco).

Furthermore, distributors often serve the mid and smaller customers, which in some industries are more often the innovators compared to the larger accounts. This knowledge is not only valuable for the customers but also for principals as an input for their R&D. By feeding this market information back to our principals we keep them abreast of new needs and trends on the market.