The Spanish economy is finally on the mend according to recent statistics, although it’s a fragile recovery that should see GDP grow by around 1.5-2% over this year and next.
This is good news for all Spanish businesses, but particularly so for small-to-medium sized businesses that managed to weather the financial storm.
One of those fortunate companies to hang on in there is business supplies dealer Ofipapel. Headquartered in Madrid, Ofipapel has maintained a customer-centric business model which, coupled with investments in technology and logistics, allowed the company to continuously evolve, even during the recession.
The customer-focused principle is in the blood of owner and Managing Director Jesús Sanabria, who gained his experience from the family-run bookstore before the presence of large shopping centres forced it to compete by adding stationery products and office consumables.
The bookstore held on for another five years before, in 2000, Sanabria took the decision to close it and use his business supplies knowledge to create a new business. Ofipapel was the evolutionary creation born from the traditional friendly neighbourhood bookstore.
Sanabria says that Ofipapel’s fundamental inspiration is not only based on the same customer service ethic that defined the bookstore, but is also determined by its staff. In a country where unemployment is running at 25% and emigration is prevalent as Spaniards seek employment abroad, Ofipapel – which has 20 employees – managed to preserve this figure during the recession.
Sanabria says that maintaining revenues from its loyal clientele during difficult times was predominantly due to his staff. He adds that staff were always informed of developments within the company and updated about its business plans. “We prioritised the knowledge and talent of our staff and offered them job security during the difficult economic times,” he explains.
Handling the competition
But it hasn’t been easy to emerge from the recession relatively unscathed, especially as the eurozone crisis walloped Spain first as well as the hardest. Sanabria says that Ofipapel had to effectively deal with a break in the evolution of the business during the hard times that affected revenues and also ultimately damaged its bottom line. “Three years ago, at the height of the crisis, several large clients – many of which had been around for generations – closed their businesses, leaving their often significant debts with us,” he says.
Being saddled with unpaid invoices were not the only problems that beset Ofipapel. The company’s main competitors, including some of the large international resellers, would operate short bursts of aggressive pricing. This, Sanabria explains, did a lot of damage to the SMB sector.
The double whammy of aggressive pricing and a generally depressed trading environment forced Ofipapel to reduce its profit margins to stay competitive. A third factor that added to the woes was the Spanish market following the global trend of declining traditional office products sales. “A significant change to the business is not only the decreasing use of writing paper, but also technology practices which have reduced the amount of alternative paper sources such as copy pages. This has required us to be constantly alert to new changes and innovations,” admits Sanabria.
Expanding categories
A fruitful relationship with its wholesale partner ADVEO has enabled Ofipapel to continuously evolve through the ability to expand its catalogue of products into new categories such as jan/san, breakroom, MRO and safety.
“Our business has always been built on offering a comprehensive service to our customers. The growth opportunities in areas such as facilities management are part of this and we want to be leaders here,” says Sanabria.
This expansion into different product categories allows Ofipapel to supply customers with the full gamut of business supplies. For the jan/san category, products cover the full range, from air fresheners and cleaning products to toilet rolls, bin liners and hand sanitisers.
MRO and safety products meanwhile include trolleys and ladders along with safety and security products, including goggles, first aid kits, safes and key fobs. The company has also branched out into breakroom, offering the ubiquitous cutlery, coffee and tea. But, ensuring that every order can be fulfilled, it further provides related and adjacent products such as brewing machines.
The addition of all these new categories means that Ofipapel currently offers over 40,000 products in total, keeping around 3,000 strategic and fast-moving products in stock for fast distribution nationwide.
Sanabria explains that the increase in categories as well as lines has allowed the company to stay ahead of the curve. Negotiating commercial agreements with international brands for the exclusive distribution of their products in the Spanish market also helps Ofipapel grow its market share and offset the fall in traditional paper-based office products.
Keeping it together
In terms of customer base, Ofipapel has a B2B model serving predominantly medium-sized businesses across Spain. With the ability to offer such a broad range of products, the company boasts clients such as Banco Popular, logistics firm Logista and pharmaceutical distribution company Cofares. Ofipapel also supplies public institutions such as the National Library, Cervantes Institute and government departments including the Ministry of Health and the Ministry of Industry.
Moving forward as Spain’s economy begins its long road to recovery, Ofipapel has recently invested extra resources in its finance department to better monitor and control payments. Sanabria’s short and medium-term goals are to grow Ofipapel’s product diversification and pump money into the marketing department to improve its visibility in the market.
CSR conscious
One of the founding principles of Ofipapel is its commitment to the environment and corporate social responsibility. The company supplies FSC-certified paper and in total offers over 1,200 products that are environmentally friendly, a number that is increasing every year.
On the CSR front, Ofipapel collaborates with the Special Employment Centre on the purchase of goods. This is achieved under the Alternative Measures section in the Social Integration for Disabled People Act. “This social responsibility helps improve the quality of life of people with disabilities and their families as well as adding value to our business,” says Sanabria.
