Azelis Group: Success in specialty chemical distribution

Azelis Group is a leading specialty chemicals and food ingredients supplier, serving principals and customers across more than 40 geographies in a diverse palate of industries, including: Coatings, Adhesives, Sealants & Elastomers (CASE), Personal Care, Homecare & Industrial Cleaning, Pharma, Food and Health, Animal Nutrition, Specialty Agri/Horti, Lubricants and Metalworking Fluids, Rubber & Plastic Additives and Chemical Industries. m“We will continue to expand service offerings globally by investing in technical teams and local application labs,” says Azelis Group CEO Dr. Hans-Joachim Müller. “Our goal is to be the most successful with regard to principal and customer satisfaction.”

Targeted growth

Expansion alongside existing principals, lateral product line extension in targeted markets and selective acquisition will drive growth. “We will grow by following existing suppliers/principals into new markets and providing customers with additional solutions,” Müller says. “We don’t want to be first in terms of size, but the best in terms of quality and performance.” A key enabler will be continued investment in talent and training to drive business performance. “Our employees are our best ambassadors and as such our top priority is to have engaged and motivated people,” Müller says. “This is the only way any strategy can be carried out effectively.” Azelis has established eight new application labs over the past year to address local market needs in key verticals such as food, personal care, metalworking fluids, and CASE. “The labs address local market needs and are an excellent enabler to increase penetration in targeted markets,” Müller says. Azelis will also take a balanced approach to expanding its global footprint. “We made great strides over the last couple of years by pursuing a ‘tag-along’ approach, or expanding business with our key principals,” Müller says. “If a principal asks us to expand in a geography that is not already served by us, we obviously already have the specific product expertise and the unique selling positions.”

Azelis sees strong opportunities in targeted segments across all regions. “Even though we already have a strong presence in Europe, the distribution market remains highly fragmented,” he says. “There are plenty of inorganic growth opportunities. Anna Bertona, our new Chief Operating Officer for EMEA, is also responsible for driving growth in Africa. And we are in the process of establishing an office in Abidjan/ Ivory Coast by following the ‘tag-along’ approach. More countries will follow over the next 24 months.”

Azelis America, led by president and CEO Frank Bergonzi, is already the largest and most successful specialty chemicals distributor in North America. “We have plenty of opportunities to expand our lateral value chain offering,” Müller says. “For example, we have a marginal presence in the North American food ingredients market. That is something we certainly will address. Azelis Americas will also lead the expansion into South America – either by pursuing the grass roots approach or through acquisition.”

Asia-Pacific, meanwhile, is not only a huge market but a tremendous growth opportunity for Azelis. “Four years ago we were not present in APAC,” Müller says. “By the end of 2016, our business in the region will contribute revenues of about €100 million with an adequate profit as well.”

Azelis recently appointed Laurent Nataf as CEO Asia Pacific, based in Singapore, to carry out the Asian expansion strategy. “Laurent will drive our expansion both into new market segments and new geographies for us,” Müller says. Azelis has successfully established a presence in Thailand, New Zealand, and Vietnam over the past twelve months and will start operations in Indonesia in first-quarter 2017.

Generating organic growth by leveraging strong technical capabilities is of paramount importance, Müller says. “Principals trust us to represent their portfolio on an exclusive basis because they want us to grow their business. And we see our sales teams as their extended arm into the market. If we don’t grow the business, we don’t deserve the mandate,” he says. To sustain growth, even in sluggish markets, Azelis continuously trains its sales experts about the technical specifics of the portfolio while leveraging access to in-house application labs. Azelis has defined strategies for all of its targeted market segments. “Azelis will work closely with principals to expand value chain offerings to better serve customer needs,” Müller says. “As the markets we serve develop over time, through either M&A activities of principals, innovative product launches, or simply changing demand pattern of our customers, these strategies are revisited and adapted on a regular basis.”

Principals, meanwhile, are shifting their focus to key accounts. “They have also retracted from certain smaller markets that were uneconomic to serve,” Müller says. “Both drivers – the increasing focus on key accounts and the drive for operational efficiency by retracting from smaller markets – are posing significant opportunities for those distributors who are ready to deploy additional, technically trained frontline sales resources to the specific market.” The trends, namely that principals will focus even more on larger accounts and that they will operate in fewer of the smaller economies, is very much intact, Müller says. “It us on us to be their partner of choice by investing in local labs and the technical capabilities of our sales teams,” Müller says. “And our team is poised to create value and grow with close collaboration with principals and customers in an everchanging specialty chemical distribution landscape.”

Article published in November 14 edition of IHS Chemical Week Magazine. Click here to read the article in full.