Simpler Structure Strengthens MacGREGOR

Tuesday, July 08, 2003
The MacGREGOR Group is implementing a restructuring plan to strengthen its position as the leader in providing marine cargo flow solutions and service for shipowners, ship operators and shipyards "Service is the primary area of future growth for MacGREGOR," said the Group's president and CEO, Hans Pettersson, announcing a plan that will simplify the organisation's structure to increase its efficiency. "And improved service includes concentrating on getting even closer to our customers: the Group's headquarters will have completed a move to Copenhagen on July 1, nearer the vital European shipowner and shipmanager community; and the future Dry Cargo division that we're establishing will be run from Shanghai, at the heart of the world's shipbuilding centre, which of course is Asia." After his appointment in August last year, Hans Pettersson initiated an exhaustive performance improvement programme that examined every aspect of MacGREGOR's activities. "For more than 60 years we've consistently come up with revolutionary cargo handling solutions that have become the standard. We have a truly global presence, both in terms of manufacturing and our service network. More than 13,000 ships use MacGREGOR products. Why weren't we more profitable?" he said. MacGREGOR has a light capital structure as it outsources a lot of design and all production tasks, which gives the Group the manoeuvrability needed to generate positive cash flow under most market conditions. Since June 1998, when the Swedish private equity fund Industri Kapital acquired the majority of shares in the MacGREGOR Group from Incentive, MacGREGOR's strategy has been to combine service business development with sustained leadership in new equipment enterprises. However, although revenues continued to grow - even in difficult market conditions, operating profit did not keep up. "The performance improvement programme identified productivity as the main culprit," Mr Pettersson said. "The organisation of the Group was too complex. We should have taken better advantage of the synergies available from our highly skilled resources. And we've identified that working more efficiently should produce an overall cost reduction of at least €8 million". One step in the new plan has been to form a new division to pull together all the Group's customer-oriented responsibilities: sales & operations, after sales and new products. Mr Pettersson considers this Service division to be crucial – so much so that he is managing and leading it himself. "The net benefit of the Service division to our customers will be improved efficiency," Mr Pettersson said. This will be achieved by economies of scale in, for example, logistics and spare parts handling, and a single spare parts unit will now handle spares for all of the Group's divisions. Dry cargo division Another new division, the Dry Cargo division, will combine the activities of the Hatch Cover and Cranes divisions. "For shipowners and shipyards who want both products, this creates a common MacGREGOR 'face' to deal with, and our focus on ship types will be increased," Mr Pettersson said. Dry cargo ships benefiting from single-source supply and servicing of cranes and covers include general cargo ships, container carriers, reefer ships, bulkers, heavy-lift ships, and special-purpose ships. "However this cannot be achieved overnight - most likely it will happen over the next couple of years or so," Mr Pettersson said. "More immediately, the Hatch Cover division's general manager will move from Europe to Shanghai before the end of 2003." The Hatch Cover division's worldwide activities will be led and managed from there by Markku Mattila, who has been general manager for 19 years. Commitment to Asia Markku Mattila also becomes president of MacGREGOR's Asian operations. He will manage the integration of MacGREGOR-Kayaba and MacGREGOR's activities in Asia. "MacGREGOR is one of the pioneers in the marine industry in Asia and will now further strengthen its presence and operations in the Asian region," Mr Pettersson said. MacGREGOR has already established its commitment to a presence in Asia: in China it has a design team in Shanghai; a joint-venture with the rubber company Haida for hatch cover seals; a partnership with NCSC in Nantong for production of hatch covers for Korea; a crane production partnership with Luzhou in Nanjing; and a partnership with Dalian Shidao in Dalian producing securing products. MacGREGOR has increased its ownership of MacGREGOR-Kayaba in Japan during 2003, where synergies with the Chinese and Korean operations will be utilised under the new management. Mr Pettersson has long experience of working in Asia, and one of his first tasks upon becoming general manager of MacGREGOR's Crane division two years' ago was to play a key part in steering the highly successful outsourcing of MacGREGOR's crane production to China. Hans Pettersson Hans Pettersson took over as President and CEO of the MacGREGOR Group on August 27, 2002. He joined MacGREGOR in 2001 as the general manager of the Cranes division. He has an extensive international business background gained, among others, from 12 years with the Swedish Match group, based in South East Asia and Germany. Prior to joining MacGREGOR he worked for 10 years in the paper industry with MoDo Paper and ASSI DOMÄN where he held the positions as president and senior vice president, respectively.

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