A busy September

16 October 2006

September was a busy month, kicking off with another successful and growing edition of the All China Leather Fair in Shanghai, which was itself preceded by the 25th International Footwear Conference, held for the first time this year in China. With an international audience already in China, Stahl also took the opportunity to hold a grand opening for their Suzhou facility on the day after the fair closed and the following day there was a Chinese upholstery leather tannery opening in Haining province. September is also a busy month for those exhibitions with a heavy emphasis on fashion. Premiere Vision, for instance, has been a major attraction for designers for as long as I can remember and it is now part of a grouping of fairs at the Paris Villepinte exhibition centre. Together with Le Cuir A Paris this is now a one stop location for range builders and designers to look for inspiration for their next collections. Le Cuir A Paris has settled nicely into its own skin as the leather industry has come to realise that it is a pre-selection rather than a general leather show. Heavy leather exhibitors have tended to drop out while more and more innovators have joined the prestige exhibitor list. Many of the top designers and brands are likely to put in an appearance so the trick is to capture their interest. Of course the halls are thronged with fashionistas, some of them looking more like fashion victims and one leather industry exhibitor was surreptitiously taking photographs of the more outrageous outfits because she didn't think the folks back home would believe her otherwise. Naturally, I was inappropriately dressed as I should have been wearing a minimalist summer dress over leggings. I suppose they got it half right as the weather was hot in Paris at the time. There were also events during the month of a more individual nature such as the media day held by LANXESS at Leverkusen to celebrate their independence. Once part of the huge Bayer Group, they were spun off towards the end of 2004. With their share prices consistently out-performing their competitors, they feel that they have proved themselves and say they are now ready to take the next step and expand through targeted acquisitions. They are, quite rightly, proud of themselves. In less than two years they have turned themselves from a business which not only started off with very low profitability but was also burdened with a considerable amount of debt. However, over the past 18 months they have reduced their debt by more than e500 million and now have a healthy balance sheet. They have transformed themselves from a low-margin and financially weak enterprise into one with improved performance and financial headroom. Phase one of their strategy to turn the company around was aimed at reducing internal costs and improving performance. Next came the restructuring of loss-making businesses to produce maximum profitability. And stage three involved portfolio adjustments, running LANXESS like a chemical based investment portfolio whereby the market drives their decision-making. One of the most telling statements as far as I was concerned was that they have reduced their management levels from nine to four, making decision-making much quicker. How many good deals have been lost over the years because the right decision was not made in time? Their success has not been without some pain, however, as unprofitable businesses will not be allowed to continue. Nor will managers be allowed to rest on past performance. Initially there was too little work for too many people which led to the elimination of 960 jobs. However, they also set up a job centre which has enabled 740 of these workers to be found new employment either within or without the company. All in all, a very creditable performance. Shelagh Davy  

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