Lyreco has once again strengthened its position as Europe’s leading contract stationer by taking a majority ownership of the company Brandex Oy in Finland.
"Finland is one of the few markets in Europe where we are not yet present," Eric Bigeard told OPI+. "This market is especially important as we are present in the rest of Scandinavia directly. We have a number of customers in the other Scandinavian countries – not necessarily big international companies – that would like to extend their contracts in Finland and therefore would like us to expand our services there."
Brandex, which was founded in 1990 by Stefan Lindberg, saw revenue of €6 million ($7.1 million) in 2004. Distributing office supplies mainly in the greater Helsinki area, it has 22 employees.
Lindberg, who will remain managing director of the company, said in a statement: "I am delighted to join the most successful office supplier in Europe and I look forward to the exciting challenge of growing faster than we have done so far."
Brandex and Lyreco are not strangers to each other. The two companies have dealt with each other’s customers in the past. "It is a small company with a fine and fun spirit," says Bigeard. "Both Stefan and Lyreco are keen to look at this opportunity to grow our business together using our joint knowledge and expertise."
Scandinavia has been quite present in OP world news of late, with the recent formation of the Office Union alliance, an amalgamation of some of the region’s largest resellers, which together represent total revenues of almost €500 million. Could this native group pose a threat to Lyreco’s future position in the Nordic area?
Bigeard claims he is not concerned in the least. Because Office Union is just a partnership, it has no direct presence. Lyreco, by contrast, which now services 24 countries directly across four continents, is the only operator to offer direct services in all four Nordic countries.
"Like EOSA in Europe, Office Union is an association or a partnership of different dealers," he says. "One country could consist of 20 dealers, for example, so if a multinational like Nokia or IBM wanted to deal with them, it would have to deal with 20 different companies, which is not what customers want. These dealers all have a different range of products and different computer systems. And if there are ten different companies to apply for a contract, that is a challenge."
But he adds that even though a partnership doesn’t translate into a direct presence, it still has its place and makes sense in a limited number of countries. He uses his partnership with Staples in the US as an example. "We have a successful partnership with Staples for companies that are on both sides of the Atlantic, which works partly because we share the same product ranges. I would of course prefer to have a direct presence in the US but that is not possible at this time."
But in Scandinavia, there are grand possibilities, he believes. Lyreco is already the leading player in the Danish and Swedish market, and with the remaining untapped potential of the Finnish and Norwegian markets, Bigeard believes the Scandinavian portion of the company’s sales pie could grow organically from 8-9 per cent currently to 15 per cent.
"Being in Finland is important to us," he added. "Although there are no international pan-European players in the country yet and maybe only four medium-sized players – and culturally, mentality-wise and language-wise, they are very different to the rest of Scandinavia – our big customers in Scandinavia expect us to be there. It’s a bit like the UK and Ireland – they may be very different places, but our customers in the UK would expect us to be in Ireland, too."
As for the future, Lyreco is currently making the final touches to next year’s budget, is looking at investing in more salespeople and is targeting growth in all markets. Bigeard clarified that his primary focus will continue to be Europe, with Scandinavia tagged as one of its high-growth markets, along with Germany.
Will it also be following in Corporate Express’s footprints into the Baltics, where it currently has no presence? Bigeard says no. "Small markets are not a priority," he said. "Portugal, Greece and Turkey for us are a higher priority in Europe."
Asia also features at the top of the to-do list. "Having added three markets to Asia in 2005, we are also looking at substantial growth there in 2006," he added.