System house disruption?
Darren Woodcock, general manager, Deceuninck, explains why in a period of significant change in the systems market, Deceuninck will continue to focus on its customers, not its competitors.
Although not a done deal yet, it appears highly likely that regulatory approval aside, the Laumann Group, the owner of Veka, will acquire the Epwin Group within the coming weeks creating by far the UK’s largest systems offering.
Consolidation in the systems market was always on the cards. The Veka-Epwin deal signals a period of flux and ultimately change. It’s clearly a strategic decision, neither business was in distress, setting a forward trajectory that is likely to reshape the UK systems sector.
As a supplier into that market we have to acknowledge that – but we remain confident about our own future.
The integration of two large UK systems suppliers isn’t an easy thing to do. Veka and the Epwin Group know that first hand. Veka went through a tough 2011 merger with Halo. The Epwin Group’s acquisition of Latium the following year, also brought inevitable disruption.
That’s because mergers send shockwaves through businesses. It doesn’t really matter how careful you are, it unsettles customers – and in this case more importantly, existing teams, and that translates into disruption to service and manufacture.
I have no doubt that Veka and Epwin will manage the transition carefully. Customers will be reassured that both will adopt a ‘business-as-usual’ approach in the immediate term.
Longer term, acquisitions inevitably bring change. Opportunities to drive economies of scale. That change can be managed, but it inevitably brings disruption.
I’m certain Veka and Epwin will work hand-in-glove with their largest fabricators to make sure that they are unaffected by whatever changes come down the line in the medium term.
It’s the mid-sized customers that the evidence of past mergers and acquisitions suggests, are likely to feel the sharp end of major change in systems supply – the delays to delivery, the changes in personnel, the product quality issues.
If they get it right, there are big opportunities for Epwin and Veka. They don’t need me to tell them that consolidation on this scale is not without risk – and the fallout can be hugely damaging to existing customers.
The direct impact aside, the merger of Veka and Epwin also sends a signal to the market more widely and particularly the customers of independent UK-based systems houses.
The new Veka-Epwin megalith is going to have serious buying power, which smaller UK systems houses will not be able to match. Even if they hold their ground short-term, their pricing models will be under pressure and funds will be tight, impacting scope for future development.
As one of the three largest PVC-U systems houses in Europe, we have more than a little scale of our own. It means we can remain competitive in an evolving systems market.
As a business we need to be aware of what our competitors are doing but not worry about them. Our focus is, and will remain on, our customers. We won’t be distracted from our own plans for the future including some exceptionally exciting new product launches and evolutions in our offer.
Despite our size, we’re focussed on doing what we do in person, maintaining personal relationships so that our customers are partners, not entries on a spreadsheet.
It’s also important not to overlook the importance of people. We have an established and expert team, our people have decades of combined experience and are the foundation of everything that we do.
Acquisitions on this scale unsettle people and I am sure there will be plenty of people in both Epwin and Veka, who will spend the next few weeks and months looking over their shoulder. We would say to anyone looking for a new opportunity, that our door is always open to good people who share our values and focus on customer service.
We place huge value in our people, which is why they stay. We do so because we know that their knowledge and understanding of our customers’ needs, are invaluable.
It’s a foundation, alongside supply from stock, for the flexibility that we can bring to our colour offer, for our plus 98% OTIF, the technical and sales support that we deliver to our customers.
And that’s where we want to be. We pass the economies of scale onto our customers, and underpin it with an agile and highly personal service offer.
If you’re an Epwin or Veka fabricator who may be concerned about where they sit within a future merged offer, I’d say get in touch. Early planning could avoid a lot of pain further down the line.
