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Bosal back in business after a successful pit stop

The miraculous resurrection of Bosal? René de Wit and Jos Zandhuis would not describe it quite like that. But it is a fact that Bosal has now - within the space of two years - risen from near-bankruptcy to an extremely healthy company full of optimism, capital for investment and with renewed customer confidence.

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So, what is decisive for such a result then?

"The basis of this successful turnaround is collaboration," says Jos Zandhuis, partner at Boer & Croon. "Undertaking the reorganisation with the people on site. Together with the employees who have to do the work, also when we - the temporary support staff - have left."

UP FOR SALE

Who could have predicted that 3 years ago? By the spring of 2018, debts were running high and Bosal's reputation was being eroded as a key supplier to the auto industry, which was chiefly in exhaust systems and towbars. The cohesion inside the company was out of balance. Production in the factories and international sales were not in sync. Expensive consultancy agencies and the in-house banker recommended splitting up the group's activities and selling off these divisions.

It was the last resort, according to the external advisors. That is, until Boer & Croon delved into the problems of the family business in the summer of 2018. The profitable towbar division had already been sold off by then. And the other business assets were up for sale. The demise of the almost 100-year-old family business seemed inevitable.

A DIFFERENT ANALYSIS

The Bos family - the founders of Bosal - did not want this to happen. And that was how Boer & Croon came into the picture in June 2018. "The previous advisors got bogged down in the process and introduced us to the company," recalls Jos Zandhuis about the initial contact with Bosal.

"In the first instance, they were looking for an experienced CFO who had experience in restructuring. That's how we got René de Wit on board in August." Rene is an experienced restructuring consultant and associate partner of the specialised Transformation and Restructuring group at B&C.

The approach of the previous advisor was to sell out and hope that you have some money left over,' Jos says. "But we made a different analysis than the previous advisers," René adds. René and Jos definitely saw a future for Bosal.

UNDER CONTROL

However, swift and firm action was called for. The old advisors were dismissed after two months, Boer & Croon took over the assignment and René was appointed CEO of Bosal.

We won the trust of the shareholders to bring the organisation back under control and get a grip on the finances.

With the proceeds of €207 million from the sale of the towbar division, the debt burden was cleared. However, a further loss of €17 million was looming in 2018. "Where things particularly threatened to go wrong was in Prague. That's where a large Bosal manufacturing factory is located, which is worth about €200 million. On top of that, it's quite a complex site. Work is done in small batches for a wide range of customers. Then you have to deal with conversion times and all sorts of complicated processes. Challenging and interesting from a production and technical-planning point of view," according to De Wit.

NEW ORGANISATIONAL STRUCTURE

For this assignment, René was able to build on the experience and knowledge of Jochem van Bueren, who had made a name for himself in the automotive industry in Germany at, among others, Audi. "Jochem has a great deal of knowledge of industrial logistics in this industry and has also been a long-time member of our Transformation and Restructuring group. Amongst other things, under his leadership outsourcing in Prague was rolled back and production was taken back into the company's own hands in order to generate more revenue. Inventory was restored to a good level and manufacturing stoppages were significantly reduced,' says René. Whereas this Czech plant made a loss of €20 mln in 2018, it now contributes to the company's earnings with a surplus of €15 mln.

In the new organisational structure that René rolled out in January 2019, all other factories operated along these new lines. This was done by optimising production, along with sales training and by encouraging teamwork. "Results were shared with each other in a very transparent way, so that people could learn from each other,' René explains. The various divisions were given financial targets, and the introduction of a management information system provided head office with up-to-date and detailed information on the latest developments.

RESTORATION OF CONFIDENCE

A second priority was to restore the confidence of the customers: the large automotive industry. "It is a market with some very powerful players, such as Ford, GM, Volkswagen, Skoda and Volvo. The new management board set out and visited the headquarters of the international automotive industry. "Winning back trust was the main goal, and being invited to RFQs again," according to René.

"An RFQ is an invitation to submit a bid, a 'request for a quote'. For that, there has to be confidence in the production capacity as well as in the quality. And obviously, the price of the product must be competitive. If you charge too much, then you're out. If you don't ask enough, then you’ll go bankrupt." One important step was when Bosal won the order to supply the exhaust systems for the Ford Transit, which are manufactured in Turkey. This was soon followed by an order to supply fuel tanks to truck OEMs in Europe.

CONSOLIDATION AND ECONOMICS OF SCALE

Getting a grip on expenses and revenues, efficiency in the factories and gaining the trust of customers. The next step was to expand the portfolio and scale up production. This market is a consolidation market. You are up against some major players and if you are too small, then you're not a dialogue partner. "Companies must also be able to depend on you, otherwise things will not go well," says Jos. As a result, diversification has taken place, activities bought up and incorporated into the Bosal group.

INNOVATIVE TECHNICAL PARTY

Consolidation and scaling up of the production was successful. Bosal is also focusing with all its might on innovation and diversification of the markets and the product range. 'Post-reorganisation innovation' is how Jos and René term this. René cites the development of their heat exchanger as an example. "With the electrification of transport, the demand for exhaust systems is set to decline over the coming years, although it will not disappear altogether," says René. "But Bosal has also put 20 years of R&D into advanced heat exchangers. And this technology is, alongside others, very important for new transport models that rely on hydrogen or e-fuels. More than 10 million euros was invested in Bosal Netherlands in Vianen that year in order to support the growth of our Energy department. Which is why we are regarded as an innovative technical party in our industry."

The recent opening of a new factory in China also formed part of the strategy. A branch was opened in Sweden as well and Bosal also started manufacturing towbars again three years after this business activity was sold off. "We have not forgotten how to make towbars," says René cheerfully.

In the meantime, B&C's involvement has been phased out and the family is fully in charge once more. At their request and in consultation with B&C, René joined Bosal to continue to lead the further growth and innovation, while Jos is still involved as a non-executive Board member.

FOUR PRINCIPLES FOR THE SOLUTION

  • Ensure that the employees' attention is focused on the goal and the assignment is in line with the business model;
  • Avoid complexity, bring structure to business processes, win and build up trust around the company, restore the staff's belief in the future, do it together as a team and celebrate your successes;
  • Focus firmly on creating transparency about the restructuring plan by setting SMART goals and steering towards KPIs;
  • Restore the confidence of customers and shareholders by involving them and talking to them frequently.
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