Saint-Gobain
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| Saint-Gobain SA | |
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| Type | Manufacturing, Glass and Engineered Materials/Public, (Euronext: SGO) |
| Founded | France (1665) |
| Headquarters | Les Miroirs 18, avenue d'Alsace 92400 Courbevoie France |
| Key people | Pierre-André de Chalendar, Chairman & CEO Benoit Bazin, CFO |
| Industry | Manufacturing, Glass, and Engineered Materials |
| Products | Construction Materials, Glass, Ceramics, Plastics, and Abrasives |
| Revenue | ▲ €41,596 million (2006) |
| Operating income | ▲ €3,714 million (2006) |
| Net income | ▲ €1,702 million (2006) |
| Employees | 208,000 (2007) |
| Website | www.saint-gobain.com |
Saint-Gobain SA (Euronext: SGO) is a French multinational corporation, founded in 1665 in Paris and headquartered on the outskirts of Paris at La Défense. Originally a mirror manufacturer, it now also produces a variety of construction and high-performance materials.
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[edit] History of Saint-Gobain
[edit] Manufacture royale 1665-1789
The early history of the Manufacture royale de glaces de miroirs belonged to what today could be called a "voluntary industrialisation policy" under the direction of French minister of finance Jean-Baptiste Colbert. Colbert's policy was, first and foremost, to reinstate order in the kingdom's economic and financial sectors, while ensuring the glory of King Louis XIV and the State. His economic and financial policies, in particular, were aimed at making France independent vis-à-vis the other great European merchant nations, while building up strong, productive, and most importantly, strategic industries.[1]
Since the middle of the seventeenth century, luxury products such as silk textiles, lace and mirrors were in high demand. In the 1660s, mirrors had become very popular among the upper classes of society: Italian cabinets, ballrooms, châteaux and ornate side tables and pier-tables were decorated with this expensive and luxurious product. At the time, however, the French were not known for mirror technology; instead Venice was known as the world leader in glass manufacturing.[2]
From the very beginning of the seventeenth century, Venice controlled a technical and commercial monopoly of the glass and mirror business, capable of producing the finest quality products available. Colbert wanted France to become completely self-sufficient in meeting domestic demand for luxury products. Furthermore, he recognized the potential that the luxury market had to offer in terms of strengthening the national economy. He thus turned his attention towards the glass and mirror industry and established the public enterprise Manufacture royale de glaces de miroirs in October 1665. The company, which had the informal name Compagnie du Noyer from the beneficiary of the monopoly granted to it, the financier Nicolas du Noyer, a receveur of taxes of Orléans, was created for a period of twenty years and would be financed in part by the State.
To compete with the Italian mirror industry, Colbert commissioned several ex-patriate Venetians to work for the Manufacture royale de glaces de miroirs. Soon the mirrors created in the Faubourg Saint-Antoine under the French company began to rival those of Venice. The French company was capable of producing mirrors that were 40 to 45 inches long, which at the time was considered impressive. Competition between France and the Venetians became so fierce that Venice considered it a crime for any glass artisan to leave and practice their trade elsewhere, especially in foreign territory.
After nearly twenty years, the Company's financial arrangement with the State was renewed for another two decades in 1683. However, in 1688 the Compagnie Thévart was created and was also financed in part by the state. The Compagnie du Noyer's monopoly was thus threatened after its 23-year monopoly because the Compagnie Thévart created mirrors and glass using a new pouring process that allowed it to make plate glass mirrors measuring at least 60 inches long by 40 inches wide, much bigger than the 40 inches the Compagnie du Noyer was offering. Thus fierce competition made its way once again to the center stage of the glass and mirror industry.
For seven years, the two enterprises waged intense competition, until 1695 when the economy slowed down and their technical and commercial rivalry became counterproductive. Under an order from the Monarchy's ministry, the two companies were forced to merge together, creating the Compagnie Plastier.
In 1702, after only seven years of existence, the Compagnie Plastier declared bankruptcy. The 1695 merger had not saved either company from financial ruin. However, a group of Franco-Swiss Protestant bankers came to the rescue of the collapsing company. Once again the company's name was changed, this time becoming known as the Compagnie Dagincourt.
At the same time as it was taken under the wing of the Swiss bankers, the Compagnie Dagincourt was provided royal patents which allowed it to maintain a legal monopoly in the glass manufacturing industry up until the Revolution, despite fierce, sometimes violent, protests from free enterprise partisans.
[edit] Saint-Gobain and the Industrial Revolution: 1789-1910
In 1789, as a consequence of the French Revolution, the state financial and competitive privileges accorded to the Compagnie Dagincourt were abolished. The company now had to depend on the participation and capital of private investors, although it continued to remain partly under the control of the French State.
During the Industrial Revolution Saint-Gobain was faced with a changing and challenging environment. Ever since its creation, Saint-Gobain had benefited from a monopoly in France and in other parts of Europe. In the 1820s, Saint-Gobain continued to function as it had under the Ancien Regime, manufacturing high quality mirrors and glass for the luxury market. However, the competitive scene was changing. In 1824, a new glass manufacturer was established in Commentary, France. Thirteen years later, several Belgian glass manufacturers were also founded. While Saint-Gobain continued to dominate the luxury, high quality mirror and glass markets, its newly created competitors focused their attention on making medium and low quality products. By manufacturing products of such quality, mirrors and glass became affordable for the masses. Saint-Gobain understood that the future of the glass and mirror industry lay with the broader public. Moreover, mirrors and glass of lower quality could be used in construction industries and thus provided a huge opportunity for growth. The company realigned its strategy by searching for opportunities to increase the demand for thick glass, and by extending its product line to include lower quality glass and mirrors.
As Saint-Gobain's strategy was changing, so too was its legal and financial status. In 1830, just as Louis-Philippe became King of the newly restored French Monarchy, Saint-Gobain was transformed into a Public Limited Company. For the first time the Compaigne de Glace was completely independent from the state.
The changes made inside Saint-Gobain from 1830 onwards were more than just simple adjustments to the way the company functioned. Drastic measures were taken to adapt the company to a growing world economy. Between 1850 and 1870, global mirror production increased at a rate of 9% annually. Industrialized urban centers, which were growing and expanding rapidly, lead to an urban building revolution. Mirrors were used in apartment buildings to create the feeling of a larger space in tight quarters. In the 1850s and 1860s, large mirrors and glass began to make their way into the streets where shops began to use them for their front windows instead of small glass squares.
While mirrors remained their primary business, Saint-Gobain began to diversify their product line: glass panes for skylights, roofs and room dividers, thick mirrors, semi-thick glass for windows, laminated mirrors and glass, and finally embossed mirrors and window panes. These secondary products were used, along with rod iron, to create the now famous decor of the late 19th century. Some of the more famous buildings that Saint-Gobain contributed to during that period were the Crystal Palace in London, le Jardin des Plantes, les Grand et Petit Palais, les Halles in Paris, the Milan Railway Station, and buildings in Philadelphia, Sydney, New York, etc.
Beyond altering its product offering, Saint-Gobain adapted to the changing business environment by merging with another French glass and mirror manufacturer, Saint-Quirin. In the mid-1800s, the Belgian and English glass and mirror industries had become so competitive that the two companies decided to merge in spite of their fierce rivalry. After the merger, Saint-Gobain was able to gain control of 25% of European glass and mirror production whereas before the merger, it had only controlled 10% to 15%.
Foreign competition increased over time. In addition to the Belgians and English, Germans and Americans entered the glass and mirror industry. In response to the growing international competition, Saint-Gobain began to open up new glass and mirror manufacturing facilities in countries without any domestic manufacturers.
[edit] Saint-Gobain 1910-1950: From New Techniques to New Products
After the Industrial Revolution, the glass industry experienced a technical revolution. For the first time in history, window panes, mirrors and printed glass were fabricated using more or less the same manufacturing process. Saint-Gobain understood the value of this revolution and thus mobilized the necessary capital to invest in research and to patent its discoveries.
One advancement made in the glassmaking business was the Chance Process. Instead of using the casting method where glass was simply poured onto a table to form sheets, molten glass was instead pushed between two rollers to obtain a thin, even and perfectly flat sheet of glass. Not only had glass panes never been this perfect before, but also the time needed to cut, grind and polish the glass was greatly reduced.
Saint-Gobain's experienced significant success over the next three decades. The large line of specialty window glass was particularly popular within the building industry. Over time, the French glass company decided to expand its product strategy. In 1918, Saint-Gobain began manufacturing bottles, jars, tableware and domestic glassware.
In 1920, Saint-Gobain extended its businesses once again, but this time in something that went beyond windows and traditional glassware: fiberglass. Fiberglass was being used to create insulation, industrial textiles, and building reinforcements. In 1937, Saint-Gobain founded Isover, a subsidiary dedicated to manufacturing fiberglass insulation. Seventy years later, Isover still remains a part of Saint-Gobain and is the current world leader in fiberglass insulation.
Beyond stretching the range of its activities, Saint-Gobain, having dedicated itself to research, developed three new glassmaking techniques and processes that not only impacted the glass industry but also had an impact on society. A dipping technique was used to coat window panes for automobiles. The technique prevented glass from shattering and possibly injuring passengers in the event of an accident. Thanks to this particular development, 10% of Saint-Gobain's sales came from the automobile industry in 1920 and 28% in 1930.
A few years later another technique was discovered that allowed glass to be shaped and bent. While such glass had several different applications, one example of its impact would again be in the car industry. Windshields could be made rounder, thus impacting the design of automobiles.
Finally, Saint-Gobain developed a process to coat glass with aluminum. This permitted glass to be used as a conductor and allowed Saint-Gobain to create aesthetic products such as the radiavers, a glass heater.
[edit] From 1950 to 1970: Saint-Gobain and Pont-A-Mousson
Between 1950 and 1969, Saint-Gobain's sales rose at a rate of 10% per year. Its work force grew from 35,000 people in 1950 to 100,000 people in 1969. By the end of the 1960s, Saint-Gobain had more than 150 subsidiaries under its control.
Glass and fiberglass sales benefited from the booming construction industry and the rise in mass consumption after the Second World War. Saint-Gobain glass was used anywhere from the automobile market to the construction industry, and its yearly production went from 3.5 million m² in 1950 to 45 million m² in 1969. In 1950, fiberglass only represented 4% of the company's turnover, whereas in 1969 it made up 20%.
France counted for only a fifth of Saint-Gobain's revenue; Spain, Germany, Italy, Switzerland and Belgium were also important markets for the company.
In 1968, Boussois-Souchon-Neuvesel (BSN), a French industrial group, made a hostile takeover bid for Saint-Gobain. Saint-Gobain quickly looked for a company to help fend off the bid. The Suez Company suggested that Saint-Gobain and Pont-à-Mousson, another French industrial group, merge in order to maintain independence from BSN.
After the merger, Saint-Gobain-Pont-à-Mousson, later known simply by the name Saint-Gobain, produced pipes in addition to glass and fiberglass.
[edit] 1971 to 1986: Evolution
The next fifteen years were a time of change and reorganization for the newly merged companies.
In the 1970s, Western economies were suffering a sharp downturn. The company's financial performance took a hit with the economic and petrol crisis.
In 1981, for the first time under the Fifth Republic of France, a socialist candidate was elected president. In 1981 and 1982, 10 of France's top-performing companies were nationalized and by February 1982, Saint-Gobain was officially controlled by the state. However, Saint-Gobain did not last long as a government-owned corporation; it was re-privatized in 1987.
[edit] 1986-1998: A Turn Towards The Future
When Saint-Gobain once again became a private enterprise, control of the company quickly changed hands. Jean-Louis Beffa, an engineer and graduate of the prestigous French Grande École Polytechnique, became the CEO of Saint-Gobain. From the very beginning, Beffa had a clear idea of how he would like to reshape the company within the next 10 years. As Saint-Gobain had a long history of investing in research and development, Beffa pushed strongly to integrate the notion of engineered materials. This notion consisted of looking for and finding future growth markets such as abrasives and ceramics, pushing Saint-Gobain to be at least one step ahead of the competition.
Under Beffa, Saint-Gobain continued to expand internationally. Not only did Saint-Gobain set up foreign factories, but also acquired many of its foreign competitors. In 1996, Saint-Gobain made a significant acquisition that would further change its product lines: Poliet, the French building and construction distribution group, bringing along with it subsidiaries such as Point P. and Lapeyre.
[edit] Saint-Gobain Today
[edit] Saint-Gobain Committees
[edit] The Executive Committee
- Pierre-André de Chalendar, CEO
- Benoît Bazin, CFO
- Bernard Field, Corporate Secretary
- Guillaume Texier, President of Corporate Planning, Secretary of the Executive Committee
[edit] The General Management Committee
- Pierre-André de Chalendar, CEO
- Jacques Aschenbroich, President High-Performance Materials Sector, General Delegate of the USA and Canada
- Benoît Bazin, CFO
- Jean-Claude Breffort, President of Human Resources and International Development
- Gilles Colas, General Delegate of the Asia-Pacific Region
- Philippe Crouzet, President of the Building Distribution Sector
- Jérôme Fessard, President of the Packaging Sector
- Paul Neeteson, General Delegate to Germany and Central Europe
- Bernard Field, Corporate Secretary
- Jean-Pierre Floris, President of the Flat Glass Sector
- Claude Imauven, President of the Construction Product Sector
- Jean-François Phelizon, Advisor to the CEO
- Didier Roux, President of Research and Development
- Guillaume Texier, President of Corporate Planning
[edit] Financial Data
| Year | 2002 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 |
|---|---|---|---|---|---|---|---|
| Sales | 28 815 | 30 390 | 30 274 | 29 590 | 32 025 | 35 110 | 41 596 |
| EBITDA | 4 194 | 4 317 | 4 185 | 3 800 | 4 086 | 3 903 | 5 431 |
| Net Results | 1 517 | 1 134 | 1 040 | 1 039 | 1 112 | 1 294 | 1 637 |
| Net Debt | 8 217 | 8 614 | 7 012 | 5 657 | 5 566 | 12 850 | 11 599 |
| Staff | 171 125 | 173 329 | 172 357 | 172 811 | 181 228 | 199 630 | 206 839 |
[edit] Business Units
The company is built around five business sectors: Building Distribution, Construction Products, Flat Glass, Containers / Packaging and High-Performance Materials.
[edit] Building Distribution
Since its creation in 1996, the Building Distribution Sector has experienced rapid expansion through internal growth and acquisitions, first in France with Point P. and Lapeyre; then in the UK with Jewson and Graham; followed by Germany, the Netherlands and Eastern Europe with Raab Karcher; and finally in the Nordic Countries with Dahl, the leading bathroom, kitchen and heating products distributor and Optimera. With almost 4,000 stores in 24 countries, the Building Distribution Sector is the leading building materials and kitchen, bathroom, heating and plumbing supplies distributor in Europe, and the leading ceramic tile distributor in the World.
A Few Facts
- 2006 Sales: 17,6 euros
- Global Workforce: 63,000
Subsidiaries:
- SGBD UK
- Raab Karcher
- Point P.
- Lapeyre
- Dahl
- Norandex Distribution
[edit] Construction Products
The Construction Products business unit provides the following products: acoustic and thermal insulation, façade coatings, roofing, interior and exterior products and pipes.
A Few Facts
- 2006 Sales: 10.9 billion euros
- Workforce: 45,000
[edit] Flat Glass
Active in 39 countries, the Flat Glass business unit is targeting so-called "emerging" countries for expansion, a market that now accounts for more than one third of its sales. Products include self-cleaning, electrochromic, low-emissivity and sun-shielding glass.
Flat Glass is currently building a plant to produce photovoltaic cells jointly with Shell, and is developing a pilot factory for the production of electronic glass in Spain.
A Few Facts
- 2006 Sales: 5.1 billion euros
- Global Workforce: 37,100
Businesses:
- Production of flat glass;
- Manufacturing, transformation and distribution of glass for construction, housing and interior decoration;
- Manufacturing, transformation and distribution of glass for the automotive – OEM and after-market – and transportation industries;
- Specialty glass: household appliances, electronics, photovoltaic applications
[edit] High Performance Materials
The High Performance Materials business unit has research centers in Cavaillon (France), Northboro, MA (United States), and now Shanghai (China). The fuel cell and the particle filter are two current projects of the research centers. New sources of growth are appearing in areas like energy, the environment, and medicine. Overall, the HPM sector's sales are usually made up of at least 30% new products.
A Few Facts
- 2006 Sales: 4.9 billion euros
- Global Workforce: 35,800
Businesses:
- Ceramics
- Grains and Powders
- Crystals
- Plastics
- Abrasives
- Textile Solutions
- Composites
[edit] Packaging
With a workforce of 20,000 worldwide, the Packaging business unit focuses on glass packaging for the food and beverage industry.
A Few Facts
- 2006 Sales: 4.1 billion euros
- Global Workforce: 20,000
Businesses:
- Glass bottles and jars
[edit] Strategy
Saint-Gobain has made a number of recent acquisitions. In December of 2005, it purchased the British company BPB plc, the world's manufacturer of plasterboard, for $6.7 billion USD. [1] In August 2007, it acquired Maxit [2] doubling the size of its Industrial Mortars business. [3].
Going along with its development strategy, the company has also sold off different businesses. For example, it recently sold its cosmetic glass manufacturing business, including its plant in Newton County, Georgia. This plant competed with other cosmetic glass manufactures such as Wheaton Glass in Millville, NJ.
[edit] External links
[edit] References
- ^ Abbott Payson Usher, "Colbert and Governmental Control of Industry in Seventeenth Century France" The Review of Economics and Statistics 16.11 (November 1934:237-240).
- ^ See Venetian glass.
- ^ Fiche d'entreprise. OpesC. Retrieved on 2008-01-22.
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