How does a Belgian family business go about taking over a business in Spain or setting up a brand new factory in Hungary? UNITED CAPS, which outgrew the Belgian market years ago, learned through trail and error. And it had a little support from its trusted banker here and there. 'We have done business with other Belgian banks, but KBC always gave me the feeling that more was possible,' states CEO Benoît Henckes.
Today, 85% of UNITED CAPS's turnover is achieved abroad, making this Antwerp company a textbook example of a family business that turned internationalisation into one of its pillars. The manufacturer of plastic lids and caps has met with great success, doing business with global players such as Nestlé, Danone and BASF for years now. United Caps was founded just under eighty years ago, but internationalisation only properly took off in the late 1990s.
'It is actually very simple,' explains CEO Benoît Henckes. 'If we want to be the top player in our sector, we simply have to take that step abroad. This is a volume business. For logistics reasons alone, it makes sense for us to be as close to our customers as possible, preferably no more than one day's drive away from their production sites.
Other factors are at play too, certainly the last few years: we are increasingly focussing on innovation and therefore on developing new products. Not many people realise this, but a cap is an extremely technical product. What's more, plastics are still a fairly new material in comparison to, for example, glass or metal. Our products are evolving very rapidly from a technical perspective. Once again, the proximity of major customers is essential, as new technological developments almost always take place on request and in consultation with those customers. Sometimes this is purely because major brands wish to differentiate themselves from private labels, e.g. in the packaging.
A great example of those types of innovations is the new cap we
developed for bottles of culinary oil: you can alternate the flow of
oil depending on which way you pour the bottle.'
International expansion would have been a great deal slower and less smooth if we hadn't been able to rely on the support of KBC.
Taking over or setting up a factory
'The first phase of our foreign expansion primarily involved a
far-reaching collaboration with customers we followed abroad. In the
last fifteen years we started taking over businesses. We currently
operate in seven countries, including France, Spain and Ireland. We
even set up a greenfield in Hungary a couple of years ago. Next year
we will be opening a brand new factory in Malaysia. If there are no
local businesses in interesting locations that meet our technical
criteria, then setting up our own factory is the only
Local market knowledge and international support
The financing of foreign acquisitions, as well as the extra investment needed for construction or renovation of existing factories, are always a shot in the dark for a relatively small company. The construction of a new factory in a country like Hungary (and soon Malaysia) goes far beyond this.
Benoît Henckes: 'The rules and procedures differ wherever you go. It
is extremely important to be able to fall back on the experience and
expertise of a banking partner that does understand the local market.
We always work together with a local bank in each country, but we also
engage the services of major international banks like KBC. This allows
us to benefit from the extensive international experience and network
of that bank.'
That's when the support of a bank like KBC, a bank that knows us through and through, is truly invaluable.
'We have benefited from the added value of their international
network a couple of times in the past, and not only in far-away
destinations. We have been operating in Germany for a couple of years,
but German banks consider us, a Belgian family business, to be a small
company. We haven't reached the level of Mercedes or Volkswagen yet
(laughs). That's when the support of a bank like KBC, which knows us
through and through, is invaluable. I don't think I am exaggerating
when I say that our international
expansion would have been a great deal slower and less smooth if
we hadn't been able to rely on the support of KBC these past
The latest foreign investment project in Malaysia is proof that UNITED CAPS has been growing at a quicker rate these past years. A new factory will be set up there, meaning that the necessary working capital must be available. 'When you talk about different regulations or major cultural differences, this is a totally different situation to, for example, setting up a factory in Germany or Spain. KBC does not have a branch in Malaysia, but it does in Singapore, so we contacted them at a relatively early stage. Their advice and knowledge of local markets is essential for these types of foreign investments, which also involve factors such as the stability of certain countries.
I truly feel that other banks do not provide these types of services to the same degree. We have one central contact person at KBC in Belgium with whom we have a good business relationship and who helps us with our foreign plans. They are almost like an external strategic partner. I have the feeling that some internationally operating banks mainly focus on major companies. As far as I am concerned, this is certainly not the case at KBC.'