1. As you know, news of the VEKA purchase broke well before the deal was done, on this site as well as on Twitter. What effect, if any, did this have on the deal?
There were all sorts of rumours circulating the industry regarding who was going to buy who. There was also talk of VEKA pulling out of the UK prior to this, and then there was talk of us buying other system companies and even other system companies buying VEKA. We tried to keep it as quiet as we could and we did for several months as a board, but as more people got involved the process started to take too long and word started to leak out. At the time we could not confirm or deny any of the speculation in case it jeopardised the deal itself. In the end did it affect the deal; no I cannot say it did.
2. Obviously, with any takeover, the main concern for people is jobs. Has the merger had any impact on jobs if any at all?
The VEKA group is very much a family business and is still owned by the Laumann family who set it up in the late 60’s and is now run by Mr Laumann’s daughter and husband Andreas Hartlief, who is now the chairman of the group. People are paramount to the business, but like any merger we had to look at what was required to put two large businesses together and make them profitable. Strategic reviews were undertaken on all function areas and in some cases this did lead to some transfer of work to the Burnley site and some redundancies at the Minworth site. VEKA were open and honest with all employees and a number of open days and evenings along with visits in the local Burnley area were given to everyone based at Minworth, and incentives were given to relocate. We understand that it is not possible or practical for everyone to move, but we tried where we could. We will also continue with the Minworth site and some further plans and developments are underway and all will become clear in the next few weeks so we will continue to utilise both the Minworth and Burnley sites to their maximum.
3. What changes have been made to both VEKA and Bowater in terms of products and how each of the businesses operate?
At this time we have made no changes to any of the product lines other than to launch the new System 10 Aluminium system in January and we have plans to introduce a new window with the lowest “U” values of any window currently on the market. All production and distribution will come from Burnley and we will operate both the Halo and VEKA brands separately and will have two separate sales teams to achieve our goals.
4. What made Bowater and Halo and attractive purchase?
VEKA has expanded all over the world and felt that it was time to invest further in the UK market. We looked at all the system companies out there and did an internal benchmarking exercise. Bowater came out on top of this matrix and were always our first choice. We did look at others but in the end we feel we got the right company. What made it an attractive purchase was that it was a longstanding company, with an excellent name and brand within the industry and also had great product lines. Over the years I have encountered little or no conflict with Bowater customers so this also helped in the decision. When this was announced we spoke to all the VEKA and Halo customers and everyone received this as a good and positive move.
5. Who else was interested in the purchase of Halo, if you know that sort of info?!
Yes, I believe that other system companies were looking at Bowater, but in the end it doesn’t matter as we were the successful company.
6. It is widely accepted that VEKA has quite a substantial cash reserve, is this money going to be spent on upgrading the Halo product which is already high in quality and very popular?
Yes, we want to upgrade not only the Halo product, but the VEKA product as well. Both companies have excellent product ranges, but with the way the market is moving and the “u” Value becoming increasingly more important, then we need to look at what the new systems are going to look like for the future. Along with the launch of the new Aluminium system and the forthcoming launch of “the box window”. These are just the start of the development work that is already going on through Tim Williams at VEKA, Robert Hoellrigl at Halo along with Mark Barsby who will be joining us soon as Technical Manager. We also have the support of one of the largest R&D and technical teams in Europe and work has already started on designing new systems for the future.
7. Are there any plans to bring out joint products and services with the businesses?
All product and distribution will be from Burnley. The plan would be to have a common platform where all ancillary products could be shared, but the main line profiles will be different to keep up the brand differential.
8. How much did VEKA pay for the purchase of the Bowater Group?
As mentioned Bowater were our preferred choice, but the starting price was higher than we were willing to pay, so we looked at others. In the end the price we paid was substantially less than where we started from.
9. As we have seen in the conservatory roof market in the last couple of months, we have seen large scale consolidation, with K2 and Quantal being swallowed up. Do you think there is any more room for these sorts of deals within the window sector?
I believe that we will see more consolidation in the industry at all levels including Profile Systems and I would have thought hardware companies, along with others. The market has seen a substantial decline from its height in 2003 and it clearly cannot sustain the current level of companies currently operating in our market.
10. Lastly, the industry has seen quite sharp contraction over the last few years. Yet a report from Key Note out last week estimates the industry at over £5bn, with Palmer estimate it at roughly £3.5bn. Which do you think is more accurate and what are your predictions for the industry as a whole and its plans for growth and getting out of recession?
I would be more inclined to agree with the Palmer report. The window industry has been hurt hard along with most building products and the building industry in general. Listening to the “experts” most are predicting a decline in 2012, a stable 2013 and possibly a small rise in 2014. The way things have gone over the last few years, who know. I have been at VEKA 24 years and I have seen my fair share of change from the good times to the bad, but as an industry I’m sure that we will be able to ride the storm and certainly the VEKA UK group are in a far better place than most.