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2005 ORIENTATIONS |
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 Implementing change Having suffered from an economic downturn and structural changes in its markets, Gascogne devised and started implementing a far-reaching change process in 2004. The aim is for the Group to fulfil its considerable potential and achieve profitable growth. In 2005, Gascogne stepped up efforts to enhance competitiveness in order to increase resilience to the economic cycle. The priority was to overhaul the management structure, giving more responsibility to business managers and developing a new profit-oriented culture. In the same year, the Group introduced an ethical charter, set up new support functions and developed closer links between divisions. Active governance
Putting the company back on the profitable growth track, despite the tough operating environment, required Gascogne to become more responsive. To achieve this, it reorganised all of its decision-making processes.
The adoption of a governance structure consisting of a single Board of Directors shortened and simplified these processes, and allowed the Group to step up its transformation in the second half of the year. This decision was approved by the Supervisory Board on 19 May 2005 and by the Shareholders' Meeting on 5 July 2005. Of the 12 directors appointed to the new board, five are independent, selected on the basis of their relevant skills and experience.
Ethical charter: a guide for implementing change
 An ethical charter was introduced in early 2005 to provide guidance to all Group managers and staff. It sets out the basis for deep-seated changes in the Group's operating procedures and culture. The charter makes customer satisfaction the central concern of all staff, regardless of their function. Developing a spirit of enterprise is a priority. The charter promotes this spirit through formal rules, to which the Group is firmly committed: increased management accountability, shorter decision-making processes, enhanced control and transparency, faster development of synergies and a focus on results.
Gascogne's management bodies underwent major change in 2005. Responsibilities were defined more accurately, functions were strengthened and most management teams received an injection of fresh blood through both internal promotion and the arrival of new talent. These changes took place alongside a reduction in the workforce.
Stronger support functions
 The Group's central organisation is now firmly focused on profitability, and allows the divisions to focus on maximising operating profit. The Finance Department was reorganised and bolstered by the centralisation of Group functions such as accounts, cash management, credit management and legal. These central functions have the task of providing operational staff with reliable and efficient management tools, with the accent on reducing costs and increasing margins.
The IT department was centralised to help it develop management and productivity solutions at the lowest possible cost, by streamlining, harmonising and sharing proven solutions. The Group pays great attention to staff development and value, and set up a Human Resources department tasked with co-ordinating and projects common to all divisions. Through the development of Group-wide assessment tools, the HR department works to develop synergies through skills-sharing and encouraging staff to move between divisions
Finally, a development committee was introduced to accelerate and co-ordinate inter-division technical and commercial developments. In particular, this committee is in charge of co-ordinating efforts to realise synergies and increase business levels with large customers.
Decentralisation of operational decisions
Developing a profit-oriented culture in line with the Group's values requires each business division to adopt an entrepreneurial spirit. The five divisions were organised into profit centres, each under the authority of a Managing Director reporting to the divisional head. Each division now benefits from enhanced support functions (such as purchasing, HR and marketing). These are vital tools when defining and implementing value-based strategies in target markets.
Increased operational efficiency and enhanced safety
The reorganisation of Gascogne's businesses around the core theme of profitable growth was accompanied by efforts to maximise industrial and commercial efficiency:
- Reorganisation of the Wood division
- Increased reliability in the production system and faster reduction in the Paper division's headcount
- Development of a new line of high-value-added plastic sacks in the Sacks division
- Closure of unproductive facilities (two sites and two production lines) in the Laminates division, in order to focus production at the most dynamic sites
- Further reorganisation of the Distribution division
A safety plan was deployed in each division. This led to a significant reduction in the number of lost-time accidents, which fell by 40% between 2003 and 2005.
Increased realisation of inter-division synergies
In 2005, nine inter-division working parties were set up to look for joint development opportunities in each sector. The aim is to increase internal sales (particularly of paper), reduce costs and explore new external business opportunities. By the end of 2005, 22 areas of study had been identified and several developments had got underway involving the Paper, Sacks and Laminates divisions.
Streamlined commercial approach
Over time, Gascogne has developed by acquiring complementary companies and businesses. Until 2005, all businesses had their own commercial approaches, which sometimes differed, even when dealing with the same customer or market. The Group therefore decided to streamline its commercial approach using a matrix structure, setting up a Major Customer unit and a Global Offering unit. The Major Customer unit has the task of capitalising on relationships with the Group's main customers, and of generating growth in all divisions. Several pilot initiatives are underway. The creation of a Global Offering unit will enable each salesperson, regardless of speciality, to offer customers the full range of Gascogne products and solutions.
Fresh commercial impetus
A repositioned offering, focused on value-added solutions and growth markets
One of the main projects in 2005 was to replace volume-based strategies with value-based strategies in each business area. The aim is no longer to win market share at any cost, but to gain strategic positions and deepen relationships with high-potential customers and/or markets. This strategy has resulted in the discontinuation of commodity products and a new focus on segments where the sophistication of products and services is a genuine competitive advantage. To illustrate the wisdom of this approach, Gascogne Sack now produces mainly technical value-added sacks and has the highest profitability levels in its market. In this way, Gascogne's businesses are adapting to specific customer needs by offering customised solutions. The Group plans to capitalise on its diversification by generating innovation, international development and marketing synergies both between and within divisions.
Co-ordinated, streamlined and more aggressive international development
Gascogne operates in 70 countries through a small number of subsidiaries and numerous agents, sometimes more than one in each country. It has only recently gained a co-ordinated overview of its international markets. In 2005, the new International Development department was given the task of streamlining the Group's international network in order to optimise sales, purchasing and market surveillance. In 2005, the Group started to combine its sales networks in Southeast Asia, with the pooling of Laminates and Paper sales reps within a single agency. Similar combinations took place in the USA in the Sacks and Paper divisions. This organisational model, based on the creation of a single Gascogne subsidiary, will be rolled out in the Group's other key markets.
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