Allimand's activity by Franck RETTMEYER

1st part : Porsche SUPERCUP in Monaco

When and how did you meet Kevin ESTRE? How long have you been sponsoring motor racing for? In your opinion what does Kevin ESTRE (only 23 years old) represent?

Franck RETTMEYER, ALLIMAND Chairman and CEO: I met Kevin ESTRE 5 years ago at a race circuit, motor racing being a passion of mine. ALLIMAND has been sponsoring young pilots for the last 8 years with the aim of helping them start up their career. We had a talented pilot, Laurent GROUPI, Formula Renault 2.0 French Champion, who won the French Porsche Cup 2 years ago. However we stopped sponsoring him as he only competed in races in France and Kevin ESTRE’s potential seemed a lot more interesting. Kevin ESTRE is a quick, willing and sound young man, a fighter, and this is why he caught our attention.

How do you compare motor racing with the company Allimand?

A race is a commitment, as is business; then there’s risk taking: taking orders is always a risk even when we do our best to have everything under control… Finally there’s the challenge: motor racing and the industrial world both have the same objective, annual success.

Why do you support Kevin ESTRE? What is there of interest for ALLIMAND in being a sponsor? What is the ROI for ALLIMAND? What is ALLIMAND’s sponsoring budget? Do you sponsor any other activities?

The interest is helping a young man fulfil his dreams. The real interest for the company is to take up a challenge. Finally being associated with the Porsche SUPERCUP evokes reputation and excellence. Man is what interests us the most. The car is a means but man is the master. That’s what we like.

How is this rank encouraging?

The Porsche SUPERCUP is a European discipline in which experienced or promising pilots participate. To finish 2nd in Monaco is more than just a stepping stone to success!

Do you have other sponsoring projects coming up?

At the moment we’re happy to stay with Kevin ESTRE and hope to accompany him as far as possible, while staying in a reasonable financial framework. Our objective is to share Kevin ESTRE’s success with our customers, personnel and partners and what better way to do it than with this impressive Porsche SUPERCUP race.

And next year… Do you hope to go that step further and be part of the Monaco Grand Prix?

For Kevin ESTRE and ALLIMAND, we’ll be at the Porsche SUPERCUP or its equivalent. Our objective for him is to win Monaco and other Grand Prix which will be a curtain raiser to the Formula 1 but most importantly for him to fulfil his dreams and become a high performing sportsman.

2nd part: ALLIMAND / 2011 results / 2012 forecast

Over the last 30 years, we can see that despite a surge in government spending, deficits and debt, France’s growth is weaker and weaker (1.2 % per year for the last 10 years), unemployment’s growing, poverty is rising and inequalities are increasing.

Since 2009, France hasn’t managed to generate sufficient growth, even if only to ensure paying public debt interest; the fall of French GDP isn’t helping the situation. While world growth is stabilising around 3.5 % in 2011 and 2012, Europe is heading straight for a recession… What’s ALLIMAND’s position with regards to Europe?

2011 was marked by a strong sales activity allowing us to build up our order book with 5 paper machines, 2 of which are to be delivered in 2013. These machines are to be built either in Europe or South East Asia (Indonesia, China). In addition to these machines, we also have several rebuild projects on existing machines in France, Thailand, Saudi Arabia, India, Japan.

The annual turnover for 2013 is very high; between 70 to 80 million Euros. It’s an impressive industrial performance! Our order book is full and our workshops are running at full speed with three 8 hour shifts on certain machines.

August 2011 marked a turnaround point in the recession. In this seasonal context of little trade on the international stock markets, and after having been hit by the Greek recession, the American public debt rating was downgraded from Triple A to AA+. Immediately speculation spiralled out of control and the wildest rumours spread during the summer of 2011. Stock prices collapsed in sizeable proportions. It’s the economic crisis. Where is ALLIMAND placed in all this?
For ALLIMAND, the economic crisis obviously has an impact on everyone’s daily lives by the inevitable higher tax burden, by the behaviour of politicians often very misplaced in view of the inescapable fact: Globalisation.

ALLIMAND is different in that we have integrated a global market that has allowed us to compensate for a drop in investment in Europe by areas where investment is still strong: Asia, but not only…!

2012 started out like 2011 and finished in a mist of demagogy. The debates on the social VAT and France’s loss of its Triple A ranking set the tone. Many greeting cards were designed using the Triple A theme: “Argent, Audace, Aventure” “Money, Audacity, Adventure” etc. How did you express your best wishes?

2012 is a busy year for us and much of 2013 as well. With this in mind we wanted to start the year full of optimism, remaining however attentive to the development of our customers’ order books. The latter have considerably weakened over the last few months due to the impact of the decline in growth, the collapse of the car industry for certain European countries and in particular France, the drop in consumption, which all result in the inevitable increase of the tax burden and increase of unemployment.

Our order book is full up until mid-2013 which is particularly pleasing; however the drop in activity of certain paper producers is worrying. The cost increase of waste paper has become unaffordable for not only French paper producers but also European. Finally, politically speaking, our leaders do not place their strategy within global competition and still dream of Western world dominance! Which is not so viable today.

We are supported by our banking pool and ALLIMAND is therefore not affected by the pressure from the banks. In 2012, we are investing 2 million Euros in our production means, management and opening various offices around the world. Furthermore, we have invested in a “long fiber” pilot machine, installed in the United States, an hour from New York, in order to develop our products and offer our customers a specialty paper testing base.

How do your foreign customers see France and more importantly, French industries like you?

France is no longer spoken about! The Empire days are behind us and now we are reinforcing our presence on the particularly competitive world market where our customers expect to receive new technology and products in order to respond to the needs of their different markets.

In which geographical areas have you noticed the highest increase in your turnover?

Without a doubt Asia, with its leader, China.

The escalation in the prices of raw materials weighs on the buying power of importing countries and can oblige companies, households or governments to ration their consumption, and therefore reduce demand. Has this explosion of raw materials since mid-2010 affected your production costs?
It’s a real concern. Raw materials are fixed at high prices and are not lowering. This has been going on for several years as we are at the same level as in 2008, which is before the 2009 economic crisis. However, we’re pleased with the decline in value of the Euro which is reinforcing our product competitiveness in Asian and American zones.

3rd part : ALLIMAND / Setting up in Spain and in the United States

You will soon be opening an office in Spain in San Sebastian… Why?
Mainly to discover the Hispanic market, but also the Latin American market. For that matter, we have taken an order for a new “long fiber” machine in Spain for the group “Miquel y Costas”, for which the commissioning is scheduled for the last quarter of 2012.

United States: ALLIMAND has just installed a new pilot machine in the United States, in Albany in the state of New York. This means that you have opened a new ALLIMAND entity. How long have you been working on this project? What does this new step mean to you? What’s in it for your customers? But firstly, what is a pilot machine?
A “pilot machine” is a small scale complete machine used for carrying out tests and for producing paper in order to have a clear idea of the characteristics that will be obtained on an industrial scale machine. This investment is an opportunity combined with the possibility to be closer to our customers in this area.

We started working on this project in 2009 while confronted with the recession. We were threatened by the development of electronic media, which started having a serious impact on our customers who produce magazine, writing & printing paper, more commonly known as “White Paper”. With this announced drop in white paper consumption, we needed to find new opportunities for growth. We therefore concentrated our efforts on technical papers where ALLIMAND is well known and “long fiber” papers. These are very high added value, creative papers for the food, medical and construction industries and which are today sought after in Europe and the United States.

4th part: ALLIMAND / PROSPECTS

After the United States, what other continent do you target? And where will you stop? You are one of the rare heavy equipment manufacturers that have remained independent… Have you ever been approached by investors?
A company like ALLIMAND is a constant challenge. Our aim is to create value through developing products, following the development of our customers and winning over new customers while remaining independent.

You continue to invest abroad but also for your employees as you are in the middle of renovating and extending the administrative offices of the 1st floor of your Headquarters in Rives. Is ALLIMAND therefore a good place to be…? Do employees have a lifelong career with ALLIMAND?
ALLIMAND has a strong activity and responds to challenges; it is not just a “walk in the park”. Lifelong career, absolutely not…! The desire for stability and social improvement…? Not an easy objective.

Finally, you have just been re-elected Chairman of the Paper Group SYMPO… What is the main strategic direction for the 2 years to come?
There are several areas: Promoting French companies who manufacture paper making equipment or propose their services. 2nd objective: our machine safety, which is a common objective amongst French paper producers and its technical association ATIP.

You’re head of an impressive French SME with 300 employees and with a full order book but for how long…? Several months… several years…? What advice would you give in order to succeed in France today?
I wouldn’t! Success is a fleeting phenomenon and a daily concern!