Groupe Guillin SA History

Company Perspectives:

Based on its experience and innovation ability, the Guillin Group intends to pursue its development in the service of its customers in order to continually strengthen its rank in Europe and to offer its colleagues and shareholders an environment which meets their expectations. Key Dates:

Key Dates:

1972:

François Guillin establishes Guillin Emballages; during its first decade, the company develops a line of pastry containers.

1980:

Company develops line of containers for catering and deli counters.

1989:

Company is listed publicly on Paris secondary market.

1990:

Alphaform and Dynaplast are acquired.

1993:

Nespak (Italy) and Gattini are acquired.

1997:

Gattini, a money-losing operation, is sold off.

1999:

Shares in Socamel-Rescaset are acquired.

2000:

Holding in Socamel-Rescaset is increased to 19 percent.

Company History:

Groupe Guillin SA is one of Europe's leading manufacturers of plastics packaging products for the food and related industries. The company holds a leading 65 percent share in its home French market and up to 30 percent of the total European market. Operating through four primary subsidiaries--Guillin Emballages, Alphaform, Dynaplast, and Nespak--Groupe Guillin transforms some 45,000 tons of PET, polypropylene, and polystyrene plastics into more than two billion products per year. The company, which has long played a leading role in the development of new plastics-based packaging products, produces containers and packaging products for supermarket, catering, and general food industries, as well as packaging and products for the fruit and vegetable industry. Led by founder, Chairman, and CEO François Guillin, the company is looking forward to expanding rapidly in the early years of the new century, with plans to double its annual revenues by 2005. The company expects this growth to come as much from acquisitions as from internal expansion. A possible acquisition target is that of Socamel-Rescaset, a French manufacturer of disposable dishes, cookware, and packaging products for the restaurant industry. Since 1999, Guillin has bought up nearly 20 percent of Socamel's shares. In the meantime, Guillin continues to invest in its existing businesses, spending upward of FFr 100 million per year on capital investments to increase and modernize its production capacity. The company has been traded on the public stock market since 1989, beginning with the Lyons stock market before moving to the Paris secondary market. The Guillin family continues to hold 55 percent of the company's stock.

Garage-Based Growth in the 1970s

Groupe Guillin had its start in a garage in the tiny village of Mouthier-HautePierre, in the Loue valley, in 1972. François Guillin, then 24 years old, had installed a machine for pressing plastic trays and found customers for his products among the region's university cafeterias. The company early on concentrated on so-called 'short-life' packaging products for fresh foods.

During the 1970s, Guillin turned toward the booming supermarket sector, which was quickly transforming the French retail landscape. The rise of the hypermarket--a particularly French style of department store and supermarket combined in a single, massive sales space--created a new breed of retail empire, which quickly grew to dominate the country's retail scene. It had opened a new market for Guillin, who developed a range of containers especially for the bakery departments of the country's supermarkets and hypermarkets. Among Guillin's earliest customers was the Carrefour chain, credited with inventing the hypermarket concept.

Carrefour's interest in Guillin's products helped put the company on the map. As Guillin commented to L'Expansion: 'After that, it was fireworks!' Guillin quickly expanded production to include a variety of packaging designs for the various pastries, breads, cakes, and other products found in Carrefour's bakery departments. Other supermarket chains rapidly caught on, turning to the growing Guillin company.

One of the features that marked the company from the beginning was its willingness to innovate, placing a large percentage of its resources into research and development to create new products. In the 1980s, the company extended its range of supermarket containers to the deli department, creating a range of packaging and products specifically designed for the department's meats and prepared foods. Meanwhile, Guillin was finding success beyond the supermarket sector; the company's packaging products soon became sought after across much of France's retail catering industry.

By the end of the 1980s, Guillin had moved its headquarters to nearby Ornans and had become a growing company of 120 employees posting sales of FFr 120 million per year. In that year, Guillin, seeking to expand the company, brought it onto the Lyons stock exchange, with a listing on the secondary market. The Lyons stock exchange later was merged with France's other regional exchanges into the single Paris Bourse. Guillin's listing was then transferred to the Paris Bourse's secondary exchange. While the listing helped the company to raise capital for a new period of growth, the Guillin family remained, nonetheless, in majority control of the company's shares.

External Growth in the 1990s

The public listing enabled Guillin to go on a bit of a shopping spree in the early years of the next decade. In 1990, Guillin acquired two companies, Alphaform and Dynaplast. The first of the two, Alphaform, based in the Drôme region, expanded the company's range of plastic trays and containers, while also extending it into the disposable dish and tableware segments. Dynaplast, based in the Yonne region, was to prove a significant addition to Guillin, adding not only its own range of products but especially PET production capacity, bringing Guillin into this fast-rising packaging segment. Dynaplast also manufactured PET sheets for use by other plastics products manufacturers and featured its own strong research and development capacity. Dynaplast was, indeed, to become one of the driving forces of Guillin's continued product innovation.

Instead of integrating its new acquisitions under the existing company, Guillin reformed itself as the Groupe Guillin holding company, placing Dynaplast, Alphaform, and Guillin Emballages as subsidiaries under the new parent. They soon were joined by two new acquisitions. In 1993, Guillin acquired Nespak, based in Italy and Gattini, based in France's Vaucluse region. Nespak expanded Guillin into a new category, that of fruits and vegetables, which quickly became one of the company's fastest growing segments. Gattini, too, added a new product range, that of protective plastic films; yet the Gattini acquisition quickly turned sour and began posting losses through the mid-1990s. After losing some FFr 10 million per year through Gattini, Guillin put the Vaucluse operations up for sale in 1997.

In the meantime, Guillin had come through another crisis. A dramatic rise in raw plastics prices placed Guillin, along with the rest of the packaging industry, under extreme pressure. Faced with customer resistance to any changes in the company's own prices, Guillin was forced to take a loss in 1994, its first ever year in the red, posting FFr 10.5 million in losses on sales of FFr 650 million. The crisis, which saw prices for the different types of plastics between 25 and 85 percent, also signaled a coming consolidation of the packaging industry, which remained highly fragmented among both large- and small-scale companies. As one analyst described the market to L'Usine Nouvelle: 'There isn't enough room for everyone anymore. Tomorrow, it will be necessary to be a certain size in order to follow one's clients into all the markets.'

Market pressures helped place Guillin's Dynoplast subsidiary under bankruptcy protection by 1996, while the group as a whole recovered its profitability. Meanwhile, after attempting to restructure its Gattini subsidiary, Guillin announced its intention to sell those operations in 1997. The company also had redeveloped its strategy, targeting two core markets for its future growth, those of catering and fruits and vegetables. Through Nespak, Guillin already was able to claim a position as one of Europe's leaders in the fruits and vegetables category. Meanwhile, Guillin began a newly aggressive investment program, construction of a 3,500-square-meter extension of its Guillin Emballages production facility, as well as investing FFr 15 million in a new extrusion line for the Dynoplast operations, while Alphaform was given a FFr 12 million extension into PET plastic sheeting production. Nespak, too, was slated to receive a FFr 20 million investment to increase its production capacity, helping to counteract the loss of FFr 45 million in annual sales as a result of the sell-off of Gattini.

The return to profitability of Dynoplast also helped it stake out new growth prospects, particularly with the company's continued introduction of innovative packaging materials and products. The company's heavy investment program continued into 1998, when it spent FFr 100 million to add thermoforming and extrusion capacity across its part of production facilities.

Guillin promised to grow bigger at the turn of the century. Envisaging new acquisitions, François Guillin told La Tribune: 'The experience with Gattini permitted us to clarify our strategy and to fix a minimum revenue level of 150 million francs for companies in the group.'

At the end of the decade, Guillin appeared to have identified its next acquisition target. In 1999, the company began buying up shares in fellow French packager Socamel-Rescaset. By the middle of 2000, as Guillin's share of Socamel climbed toward 20 percent, Guillin acknowledged its interest in acquiring Socamel, while Socamel's primary shareholder announced its interest in a possible sale. The addition of Socamel not only would add some FFr 450 million in annual sales to Guillin's books, but also would permit Guillin to extend its operations into the restaurant sector. Such moves fitted in well with Guillin's determination to double its annual sales by 2005. At the same time, Guillin expected to expand its international sales--which already accounted for 42 percent of its sales in 2000--positioning itself not only as France's leader in its market segment, but among the top European leaders as well.

Principal Subsidiaries: Alphaform; Dynaplast; Guillin Emballages; Nespak SpA.

Principal Competitors: Amcor Ltd.; Ball Corporation; Bunzl plc; CarnaudMetalbox SA; Crown Cork & Seal Company, Inc.; Huhtamaki Van Leer; Italmobiliare S.p.A.; Pactiv Corporation; Rexam PLC; Sealed Air Corporation; Sonoco Products Company; UNITIKA LTD.

Further Reading:

• Meyer, Jean-Michel, 'L'emballage sous pression,' L'Usine Nouvelle, October 12, 1995.
• Nezzar, Samira, 'L'emballeur Guillin cible l'agroalimentaire europ&eacute-,' La Tribune, March 5, 1998.
• Robert, Martine, 'François Guillin: Une mutation industrielle extraordinaire,' Les Echos, September 23, 1996, p. 51.
• ------, 'Guillin paré pour l'Europe,' Emballages Magazine, May 29, 2000.
• ------, 'Guillin révolutionne la barquette plastique,' Les Echos, September 23, 1996, p. 53.
• ------, 'Guillin vise toujours l'international,' Emballages Magazine, January 29, 2001.

Source: International Directory of Company Histories, Vol. 40. St. James Press, 2001.

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