Tuesday, June 18, 2019
De-industrialization in France is not inevitable. A visit to the factory of Desjoyaux, the French leader in in-ground pools, near Saint-Etienne, France, is proof enough.
With its original concept and highly automated production, this family-owned SME has succeeded in exporting all over the world. Jean-Louis (66) and his son Nicolas (38), who will soon be taking over the running of the company, talk about their experiences.
CAPITAL: How is your company doing?
JEAN-LOUIS DESJOYAUX: We should achieve sales of 100 million euros in fiscal 2018-2019. The company is profitable, has never lost money, and has no debt. As a good Auvergnat, I always remember that a penny is a penny…
What are the growth markets?
NICOLAS DESJOYAUX: Exports are very dynamic, particularly to Germany, where we’re recording 90% growth. And the average shopping basket there is high: 38,000 euros. We are present in 80 countries with 8 subsidiaries and a network of exclusive dealers. Europe still accounts for the bulk of our exports, but we are opening up in many other countries: Turkey, Hungary, Saudi Arabia, Israel and even Syria. We are relaunching in the United States after a disappointing first attempt. Within five years, exports should account for 50% of our sales.
What’s the most popular format?
N. D.: The most common size is 8×4 meters, for a budget of around 20,000 euros. But we can do smaller or much larger. We built a 2.5-hectare pool for a hotel in Egypt. An infinity pool on a terrace in Brazil. We’re currently preparing a quotation for a famous Brazilian player, but I won’t say more than that.
What sets your pools apart from the competition?
J.-L. D: They are designed to be assembled like Lego to form a monobloc structure. This reduces logistical costs for export, and also makes it easier for installers. There’s little risk of defects. Our problem is that there’s a terrible shortage of bricklayers, and not just in France. There’s a labor shortage in this profession, where people earn a very good living. We’re going to set up an apprentice school to try and remedy the situation. If we had more masons, we could build 20% more in France.
Is your plant near Saint-Etienne running at full capacity?
J.-L. D. Three-shift operation. In other words, production equivalent to 60 pools a day. But it’s not at full capacity. It’s fully automated. We’ve standardized production to speed up installation. This is an argument that counts with customers: your pool can be assembled in less than a fortnight.
Don’t you import anything from China?
J.-L. D. We are proud of the fact that our production is 100% French. Our molds are made in Rhône-Alpes, nothing comes from China. Some of our molds are as large as you’d find anywhere else in the plastics industry, not even in the automotive sector. We manufacture everything: the structures that make up the pool’s skeleton, the filtration systems, the coping stones and stairs, the shelters, and the hydraulic components of our pumps. This integration enables us to create added value upstream, and therefore to be profitable.
And what about ecology?
N. D. Our parts are made from recycled materials. We buy polypropylene household or industrial waste, such as car bumpers or dashboards, which we grind before extruding. When a part is defective, the material is put back into the circuit. What’s more, our pipeless filtration system, designed for simplicity, is also environmentally friendly: it’s energy-efficient, and doesn’t send chlorinated water down the drain.
You’re a self-taught man, and yet you’ve filed many patents…
J.-L. D. My father passed on this passion for industry to me. To be the boss of an SME like ours, you need intuition and the ability to take risks.
Like many SMEs, are you asking for a reduction in charges, particularly tax charges?
J.-L. D. The CICE was not well-profiled for industry, even though we benefited from it. The corporate tax cut, announced by President Macron but postponed, would be great for employment. But our real concern is the accumulation of standards imposed on us, which handicap our competitiveness. The administration is always on our backs, and it’s becoming hellish.
For example?
J.-L. D. We had a fire in our offices a few months ago. The upshot of all this was that the authorities decided that we didn’t have the facilities needed to recover water for the fire department’s hoses. DGCCRF (competition), Dreal (environment), labor inspectorate… we are at the heart of the attention of many administrations. We’re adapting, but it’s getting tiresome.
Did you approve the Macron bonus?
J.-L. D. It was a very good idea: we paid out 500 euros to each of our employees. If the scheme is made permanent and our results allow it, we’ll double it.
Why are you maintaining a high level of investment?
J.-L. D. At cruising speed, we invest 5 million euros a year, sometimes more. Even during the 2008 crisis, when we had to cut back sharply on production. Our growth potential remains high, both abroad and in France. There are 1.3 million equipped single-family homes. We could have 7 million more. We have 15 hectares of land in reserve for expansion. It will be up to the fourth generation to build new units.
Interview by CHRISTOPHE DAVID- Capital June 2019