The British company Acal BFI operates as a components wholesaler in various European growth markets. Its customers, OEMs as well as smaller manufacturing companies, are setting the bar ever higher. They want suppliers that can contribute ideas and have in-depth product knowledge. ‘For that reason, wherever possible we buy up manufacturers of sensors, electrical components and other high-quality parts ourselves’, says managing director Pieter-Jan Rovers of the Dutch site in Eindhoven.
Eindhoven springboard for further growth on the continent
The trend is unmistakable: as well is growing autonomously, wholesalers are expanding by swallowing up smaller rivals. Acal BFI seems to be taking just that path, but actually things are a little more nuanced says Pieter-Jan Rovers. ‘Our parent company in the UK acquires the manufacturers of the products we sell on to our customers. It is a successful strategy. We increase our influence on purchase prices and we acquire the most up-to-date knowledge for ourselves. After all, it is the manufacturers who employ the specialists; they keep up with the latest technological developments. In turn, we know what the OEMs want and are able to feed that back directly to our manufacturers. As a result, we move up from being a glorified order picker to a knowledge supplier. Increasingly, we sit down with our customers to advise them on the best components. And the great thing is that we make them ourselves.’
It’s not just Acal BFI who benefit. ‘No, the manufacturers gain access to our network and customer base in one go. We serve more than 20,000 customers in Europe. Slowly but surely, we are also making inroads in the United States and Asia. In our marketing, we automatically include our component manufacturers. That way, we kill several birds with one stone.’
Pieter-Jan Rovers pulls up an interesting infographic to illustrate the strategy. In recent years, the parent company has acquired eleven firms, distributed across the most important market sectors for Acal BFI. They include firms operating in the Netherlands, such as Contour, MTC and Foss. The most recent acquisition was Variohm, a distributor and developer of sensors. ‘Of course, the demand for sensors is increasing massively, just like the electronics for the Internet of Things and everything to do with energy and energy storage. Developments are moving extremely rapidly. Take the electric car, for example. I recently bought a petrol car, but it will undoubtedly be the last one. The next one will be an electric car, possibly self-driving, with dozens of systems, thousands of sensors and numerous displays. In the automotive sector, the demand for components will be insatiable. As a wholesaler, that is an important market for us. But we want to be more than just a supplier. We want co-development, to be involved across the board. To this end, we are working with innovative manufacturers which are now sailing under the flag of Acal BFI.’
Healthcare and gaming
The exponential growth around the Internet of Things is astonishing. ‘Countless devices are connected to one another via the internet. You can use your smartphone to turn up your heating, order your groceries and control your TV. We use apps to operate milling machines and reset the software in our cars. I believe there are currently already 60 billion devices worldwide equipped with a transmitter that can make contact with internet. And how about the applications in healthcare? Remote diagnosis and treatment, robots in the home, special programs to prevent diseases. Health will be as big as the gaming industry, I recently heard. There are no limits.’
Pieter-Jan Rovers foresees a revolution in the energy sector, too. ‘It is already underway. We are saying goodbye to oil, electricity is being generated sustainably. The challenge is the production of batteries and capacitors that are small, charge quickly and have a long life. The acquisition of the Scandinavian firm Noratel was therefore a useful step. Noratel is a specialist in capacitors, transformers and other components for power supplies.’
Acal BFI is part of Acal PLC, a UK listed company with over 5000 employees and various production sites. It has eight sites on the European mainland, employing 560 people, primarily in sales and distribution. The customers in continental Europe are supplied from a large distribution centre near Frankfurt.
In Eindhoven, the company employs 35 people engaged solely in buying and selling. ‘From here we also provide the complete logistics for our distribution centre and the ICT for various countries. At Acal, cooperation is key. We have set up competence centres at different sites in Europe. Marketing is handled in one place, just as the specialists in sensors are concentrated at a different location. Increasingly, our sales force is made up of technically highly trained people who are able to advise our customers. They know the markets and are up to date on the latest developments. That is precisely where we set ourselves apart. Of course we do still simply sell components, but with their technical backgrounds our sales people are growing into the role of creators of solutions. Ideally, we like to get them involved at the design stage so that they can contribute their ideas. The smaller companies in particular appreciate that, because they do not have that technical expertise in-house. You need to consolidate knowledge, not disperse it.’
Naturally, Pieter-Jan Rovers is not happy about the Brexit vote. ‘No, definitely not. Just as we are not happy about nationalistic tendencies in Europe and protectionism in the US. Nobody can turn back the clock. Not even Donald Trump. A car or machine is always the sum of international knowledge and skills, of components worldwide. Of course I don’t know exactly how it will all turn out. We are following our strategy. For the time being, I am not seeing any changes. We are investing heavily in our web platform. With the expansion of our product range and the acquisitions, we can offer our customers more and more. We demonstrate that in presentations on the website rather than in a web shop. Very often, customers don’t realise we offer tailored solutions, and that we are keen to have a seat at the drawing board. I am constantly looking for new candidates for acquisition and cooperation – increasingly, we are looking towards Asia and the US. We are taking a lead from our customers, who are also internationalising and globalising. I cannot imagine that stopping. On the other hand: I have seen the world change massively over the course of thirty years. You have to stay on your toes.’