Preben Hadberg exudes confidence. The managing director of Klimax, a label converter based in a suburb of Copenhagen, Denmark, is certain of the future of the business he runs. A few short years ago, the 50 year old company was at the threshold of collapse, but Hadberg and his partners brought it back to life. Beyond that, they have more than doubled the annual turnover through acquisition, and have growth plans for the future that are aggressive, to put it mildly.
"Our vision is to become No. 1 in labels, labeling equipment and flexible packaging. That sounds very dramatic," he acknowledges. "Most who say they want to be No. 1 also want to be the biggest. We want to be the company that gives the best service, is very innovative and supplies the best quality. We have no aspirations to be as big as CCL or the other very large companies. We want to be good at what we are doing — fast, reliable and consistent."
Klimax today is a small group of operations — two in Denmark, one in Holland, one in England — that prints labels using offset, screen, flexo, and UV flexo. It has 154 employees, and only two years ago it had annual sales revenue of €15 million. The former owner, who had turned over the operation to a relative who oversaw its gradual decline, brought Hadberg out of retirement (from Avery Dennison) to fix things up over three months. That plan didn't turn out quite the way it was supposed to, so Hadberg and some partners bought the business in 2005. Soon they made acquisitions, acquired more shareholders, and took the company public just recently.
"We want to be an attractive partner for our large customers years from now," says Hadberg. "If you look at one of the biggest food manufacturers in Scandinavia and the UK, five years ago they had 60 roll label printers supplying labels to them. They wanted to reduce that number to five, and now they are cutting it down to three. Of course, if you are a small family owned roll label printer, you will not be among the five. You don't have the capabilities, you don't have the systems and you don't have the knowledge base to allow you to be a competent supplier. This is happening more and more.
A Nilpeter press in the process of a job change
"How will we grow? Organic growth is too slow, too costly and too risky. Here in Denmark the raw materials market is flat. In the south of Europe it's probably growing 5 to 6 percent. But the prices of labels are coming down, so in value, the market in Denmark is decreasing.
"We want to take over companies. In Europe there are about 2,500 label printers. In five to seven years this number will be half of what is today. Not because companies will go bankrupt, but because the owners are reaching their pension age and the sons and daughters may not always be interested in taking over, and they will want to sell. It will happen fast. A lot of companies are for sale right now.
"Take-overs ensure profitable growth with less risk than organic growth, as well as entrance to new markets, capabilities, ideas, and customers.
"One of our customers has said to us, 'If you buy a company in, say, Germany, we will guarantee you a lot of new business.' So I think where we want to grow and take over companies is in Germany, Russia, Italy, and Spain. We plan on at least one acquisition per year. And we hope that the first will come by the end of 2007."
Klimax has implemented an inventory management program for customers, and asks that clients provide three months of advance production data. "The customer saves money by not having people placing orders for labels because that happens automatically. We take care of everything. The advantage for us is that we can budget work and materials, leveling out the tops and the bottoms of the productivity curves. Ultimately, we can save the customer between 20 and 40 percent of his label spending. The only thing we ask in return is that we want to be the sole supplier.
"Of the 26 biggest customers who account for 85 percent of sales, half are involved in the program. It's growing, and we are refining it all the time."
A Nilpeter offset print station
"Everybody knows offset, and you don't have to discuss whether you can print a good label if you print with offset. If you use UV flexo and a prospective customer is using offset today, you have a lot of convincing to do. Offset is an easy choice from a quality point of view. The real reason we go for offset is that you can transfer the orders very fast, and print a lot of different variants of the labels side by side. And there is no machine like the Nilpeter offset press."
Hadberg plans to step out of the managing director's position by the end of this year, but will keep a seat on the board of directors. His successor has already been chosen, he says, and will be the person who oversees the expansion, first throughout Europe, and then beyond.
"Our values," Hadberg says, "ensure our success: We are customer focused, fast, open and honest, we keep our promises, we solve problems, we make decisions based on facts, not opinions; and we prioritize till it hurts."