Olivier Large, Gefco Slovakia's director general (source: Courtesy of Gefco)
AFTER a recent robust growth in automotive logistics, also this segment is experiencing a drop in orders. Even though Gefco Slovakia also feels the heat of the crisis, it continues in its development and new projects. It diversifies the portfolio of its customers and apart from the automotive industry it implement its know-how in fast moving consumer goods, electronics, machinery and others .
The Slovak Spectator spoke to Olivier Large, the director general of Gefco Slovakia, a subsidiary of Gefco Group, about impacts of the crisis on the company, and other challenges the company faces in Slovakia.
The Slovak Spectator (TSS): The core business of Gefco is automotive logistics. Since the automotive industry is one of the industrial sectors which has been hit hardest by the global economic downturn, how has this affected Gefco Slovakia? Has your company, along with other shipment and logistics firms in Slovakia, recorded a drop in orders?
Olivier Large (OL): Automotive logistics is a sector which has experienced very dynamic growth in recent times. Due to the positive environment formed by government support, the qualified labour market and its geographical position, Slovakia has become number one in car production per capita. The fact is that the automotive industry leads the direction of logistics.
Today, speaking about the global economic downturn, we have experienced a certain drop in the volume of orders from our customers in the automotive sector.
As a consequence, we can see an imbalance between supply and demand leading to dumping prices from logistic subcontractors, mostly carriers, in order to survive in the market.
TSS: Do you plan any labour force reductions or modifications to work hours?
OL: We do not plan any reductions or working time modifications for our employees.
On the contrary, we have found ourselves in the opposite situation. We are currently implementing additional working Saturdays for one of our biggest customers in order to fulfil its requirements. New ongoing projects are also demanding new recruitment, so we expect continuous growth in terms of the labour force.
In our company, human resources are regarded as one of the most important values and thus we do not make any savings in this field. Via a professional team, we endeavour to secure for our clients higher-standard services, which is simultaneously an everyday challenge for us.
TSS: What can a logistics company do or offer to clients to remain competitive on the Slovak and central and eastern European (CEE) market during the current global economic downturn? Apart from the crisis, what are other challenges Gefco faces in Slovakia and the CEE?
OL: The current situation allows us to get even closer to our customers. We have used this period of economic crisis to look back and have identified fields in which we can improve. Our aim is to provide our customers with logistics solutions that can bring them considerable savings thanks to optimising their processes when using our know-how and the synergy of a global logistics provider able to support them along their whole supply chain.
TSS: Construction of industrial parks has moved from western Slovakia to the east. What challenges does this bring for Gefco Slovakia?
OL: Gefco’s strategy is to follow its customers where their business is situated. Eastern Slovakia has become a very important connection between CEE countries, or between western European and the Ukrainian and Russian markets. We see this as a very positive fact in terms of regional development and attracting new investors to Slovakia.
TSS: What other industrial segments does your firm, which specialises in logistics for manufacturers, consider attractive, apart from the automotive industry?
OL: We try to diversify the portfolio of our customers. Most activities are focused on the automotive industry, but we implement our know-how in fast moving consumer goods (FMCG), electronics, machinery and petroleum products.
TSS: In March Gefco Slovakia signed a contract with Tea & Company. Who are your other FMCG clients? Do you want to further extend your operation in the FMCG segment?
OL: Cooperation with Tea & Company is proof that we can adjust the proposed solutions of complex logistics services to the requirements of not just industrial companies, but also retail chains. The added value which we offer is cost-optimising and time-saving.
Another significant FMCG customer we have is the company Aquasped, which is an authorised distributor of mineral waters. Other projects are in the pipeline and we will announce them later.
TSS: One year ago, in May 2008, Gefco opened a new cross dock in Trnava. The goal was to become an important node for CEE. Has Gefco Slovakia managed to fulfil this plan? Can you provide details?
OL: The project has been successfully implemented. We were able to build a modern cross-dock centre for freight consolidation that has become a hub within our CEE network. Due to the number of daily inbound and outbound regular lines with other domestic and international consolidation centres, our cross dock in Trnava ranks among the most frequented in Gefco’s network. The network is created by 150 centres across Europe, which handle 14 million tons of freight annually.
TSS: What is Gefco Slovakia’s project Logistics for Students?
OL: Our ambition is to build interconnection between academia and practice for students through this project. We cooperate on this project with the Economic University in Bratislava and the University of Žilina.
The main contribution of Gefco is in organising lectures at universities by specialists, presenting case studies and participating in the creation and updating of study programs.
An example of the interconnection of the theory of logistics and the real world of logistics is an interactive excursion for students to Trnava, where Gefco delivers a complex logistics solution for a carmaker.
TSS: In what services are your clients most interested? What services apart from logistics and transport do you provide?
OL: The biggest share among our services belongs to road freight forwarding. Overseas freight forwarding has shown important growth as well as logistics services exigent in added value services such as repacking, controlling, picking, just-in-sequence delivery and so on.
Apart from transport, logistics and customs services our customers can outsource with us packaging flow management. We have long experience in rental of returnable packaging and management of empty boxes. In addition we offer to customers who use their own boxes a complete washing service on an almost fully automatic washing line.
TSS: How would you characterise Gefco Slovakia’s performance last year from an economic point of view? What are the plans of Gefco Slovakia for this year?
OL: Last year proved that Gefco Slovakia is a professional logistics integrator able to answer the logistics needs of manufacturers. Gefco Slovakia reached a turnover of €58 million in 2008, an increase of over 18.5 percent when compared with turnover in 2007 of €49 million.
In spite of the current market situation Gefco has set objectives and follows a strategy for growth in central and eastern Europe.
Our company stresses the importance of its geographic location in central Europe which connects Gefco centres with an international network of direct links.
Gefco’s ambition during the economic downturn is to help its customers optimise their supply chain and hence save money. To meet its goals we plan to hire an additional 15 people by the end of this year to extend the current 230-strong staff.
We would like to improve our services in the automotive sector since we see here the potential of Slovakia’s location. We will also continue to focus on others sectors, for instance FMCG, beauty, and healthcare.
