The PGS Group, has achieved record growth over the last 5 years. with a 27.36% increase between 2013 and 2014. And turnover practically doubled between 2010 and 2014. A look back at the reasons for this success and sustainability.
The goal set was €200 million. The Group's final consolidated turnover for 2014 will be €211.8 million, an increase of 27.36% compared with 2013. This was a huge achievement in a difficult economic environment with the industry particularly under pressure in France, which constitutes the main outlet for pallets. And the first six months of activity for the year 2015 show that this growth is continuing, in line with the goal of reaching €500 million by 2020. This strong increase in 2014 is the result of several factors: organic growth stimulated by expansion through new sites, especially in the United Arab Emirates (PGS Middle East) and Morocco (PGS Morocco), and the setting up of partnerships or joint ventures, combined with external growth such as the acquisition of the Belgian company DE BACKER in January 2014.
The recipe for success
The development of PGS is due to a carefully laid-out strategy: before deploying at international level, the leader in the wooden pallet market reinforced its position in its historical French market, not only by controlling the entire pallet-production chain via sawtimber, manufacture and reconditioning, but also by expanding in regions where the Group had not previously been sufficiently present, as was until recently the case in Brittany. "By being close to our customers, our senior managers are able to interact closely with the regional ecosystem and decision-makers. In addition, to improve our competitiveness, we systematically associate the notions of "Produce More" with "Produce Better", explains Jean-Louis LOUVEL, Founding President of PGS Group. The broadening of its range of products and services in 2014, with the cardboard palette, the eco-designed ECO-GSP pallets or the relocation service organised with RLS (Reverse Logistics Solutions), also contributed to the expansion of PGS. With an approach involving multiple skills and multiple geographical zones, growth is faster still, as it now applies across all the Group's different businesses, services and products, and over larger and larger areas. For Jean-Louis LOUVEL, however, the key factor in the success of his Group lies in its workforce, which today numbers 1300! "For 22 years, we have always placed people at the centre of our concerns," he says. "And we are proud of our corporate culture, which generates an outstanding spirit of cooperation." By drawing upon his own career as a self-taught entrepreneur, Jean-Louis LOUVEL has systematically favoured internal promotions over the years, to complement external recruitment. Through a policy encouraging the motivation and loyalty of its employees, the company ensures their strong involvement. In addition, before a new company is acquired by the Group, the management does its utmost to ensure that it shares the same social, societal and environmental values, in order to avoid any restructuring. This guarantees smooth integration of the teams, with the aims of both pooling experience and of enabling these additional human resources to contribute fully to the Group's activities, while benefiting from new professional opportunities. "We foster the pooling of experience and the loyalty of our human resources, which allows us to maintain flexibility and rapidity of execution," adds Jean-Louis LOUVEL. Mentoring schemes between older employees and young recruits also promote the sharing and transmission of knowledge.
A well-planned strategy for growth
Such rapid expansion, over so short a period, also requires that the company take special measures to sustain its growth. The Group's most recent, and highly ambitious, programme is a three-year plan to roll out an ERP software suite across all 10 of its French sites for sawtimber and pallet manufacture. "By implementing this new information system incorporating an innovative data management component we will further strengthen our processes both at each of our units in France and for our support services. In this way, we will increase our capacity for harmonisation and rationalisation of our activities so as to be even more efficient and closer to our customers," explains Pascal MONDET, General Manager of PGS France. This programme, which got under way in October last year, will see the ERP system deployed at the first two production sites in the middle of the year and will be completed in 2017. Last October, the PGS Group also finalised the deployment of another ERP system, for the twenty French sites where pallets are reconditioned. PGS is also adapting its infrastructure to host and bring together all of its support services, such as the recent construction of 1800 sq metres of offices at Salles (Gironde) near the BEYNEL plant – built out of wood from nearby forests! In addition, on the financial side and with assistance from France's Public Investment Bank, PGS raised a first round of €10 million in 2014, thus lessening the pressure on its own capital and providing it with the means for its future investments and development projects. The goal set by the Group for the next 5 years is to reach €500 million in turnover, by maintaining dynamic growth in the international market, driven by Michael MODUGNO, Founding Vice-President for International Development. Within 5 years, half of the turnover will be generated outside France, both through increased business in Belgium and Spain, and by expanding very soon in new neighbouring countries and even more distant ones. Jean-Louis LOUVEL remains convinced that the success of his entrepreneurial adventure owes more to the principles he set himself from the outset, to strictly respect his commitments and stick to his fundamental values. For the Founding President, who in his youth was something of an expert at such board games as chess or "Risk", his career has been an exciting game of strategy and conquest - and he shows no signs of tiring of it all.