Our Strategy

Who we are

Bekaert is a world market and technology leader in steel wire transformation and coating technologies. We pursue to be the preferred supplier for our steel wire products and solutions by continuously delivering superior value to our customers worldwide. Bekaert (Euronext Brussels: BEKB) was established in 1880 and is a global company with almost 30 000 employees worldwide, headquarters in Belgium and € 4.8 billion in combined revenue. 

What we do

How we work

better together sums up the unique cooperation within Bekaert and between Bekaert and its business partners. We create value for our customers by co-creating and delivering a quality portfolio of steel wire solutions and by offering customized services on all continents. We believe in lasting relationships with our customers, suppliers and other stakeholders, and are committed to delivering long-term value to all of them. We are convinced that the trust, integrity and irrepressibility that bring our employees worldwide together as one team also create the fundamentals of successful partnerships wherever we do business.

Our strategy

Our vision

Our long-term core strategies

Our five core strategies form the basis of Bekaert’s priorities and decision-making process towards driving value and growth. These strategies put the company’s vision into practice and reflect the direction and priorities over the longer term:

1. Drive the customer into the heart of our business
   
2. Value-driven growth
3. Technology leadership and speed
4. Leverage scale, reduce complexity and reach lowest total cost
5. Engage and empower people

The Bekaert annual target framework, which sets the objectives, goals, strategies and measures for the company and for every individual employee, clearly deploys the five core strategies into every employee’s priorities for the year. As a result, all five core strategies have become priorities within everybody’s personal development actions and performance review. 

1) Drive the customer into the heart of our business

Bekaert has always believed in customer collaboration and co-creation as drivers of sustainable partnerships and customer satisfaction. But we want to do better and become a truly customer-centric organization. This strategy is about gaining insight into what value means to our customers and acting upon it. It is about continuously prioritizing our customers in whatever we do, at all levels and wherever in the world.

• One year after the official launch of the Bekaert Customer Excellence (BCE) transformation program, BCE really gained traction in 2017. At the end of 2017, about 75% of our business was covered, with the various business platforms and cells making progress in different stages of the transformation program.
  
  One of the tangible effects of BCE is that the program drives changes in our customer service models so we can address customer needs more effectively. We see the impact of growing customer insight, enhanced tools, better segmentation and an explicit focus on customer value creation.
  
  As the program unfolds, we expand the use of these new insights and tools into our commercial way of working, while, at the same time, drive an increased impact. 
  
  To support the BCE program, we have created in 2017 the ‘Commercial Excellence Academy’ – a forum for continuously improving our commercial capabilities and embedding the learning from BCE within the way-of-working of our commercial teams. 

BCE helps deliver on two of Bekaert’s core strategies — ‘Drive the customer into the heart of our business’ and ‘Value-driven growth’ — as it aims to achieve four key objectives: Anchoring a customer-centric mindset across the organization Differentiating ourselves in the market Driving sustainable profitable growth by providing superior customer value Building a best-in-class commercial organization

• Customer centricity is a mindset among all employees. It goes far beyond the reaches of the sales department or the direct commercial relationship management. All employees should understand their role in driving the customer into the heart of our business.
  After a successful edition of the European Customer Week in 2016, we repeated this initiative in 2017 and expanded the concept to other regions. Through information sessions, workshops and customer visits, employees from all over the world learned about who our customers are and how we can best serve them.

• Belgian employees were invited to information sessions focusing on how Bekaert adds value to the customers, particularly when it comes to co-creating new products. The entertaining presentations shed a new light on long-lasting innovation partnerships.
• In India, a different customer was put in the spotlight every day during the Customer Week. Booths were installed to illustrate the strategies and activities of the customers and how Bekaert helps them achieve their goals. Employees tested their knowledge in a quiz contest, which added to the enthusiasm to learn. The booth concept was also used in Indonesia, where a Customer Ambassador team provided information on the customers’ history with Bekaert and on how they have evolved in creating growth together.
• The Jiangyin (China) tire cord plants invited a key customer to talk about quality performance. During several activities, employees learned how they can contribute to deliver quality in product, process and service.
• In Bekaert Orrville (Ohio, US), all operators were invited to celebrate the kick-off of BCE. This underscores how vital everybody’s role and involvement is in achieving customer excellence: from the sales contact up to the shop floor.

Bekaert invites automotive glass players to seminar In December 2017, Bekaert organized and hosted a seminar in Belgium bringing together representatives from automotive glass bending companies to discuss the latest developments. The focus was technical rather than commercial, making it different compared to many conferences the participants usually attend. At the event, Bekaert and partner suppliers met customers to discuss current challenges and future solutions.

• In November 2017, Bekaert organized the first phase of a global Net Promoter Score (NPS) Survey. It is the first time that such a survey is organized across all business platforms and on a global scale. NPS surveys are used to gauge the loyalty of customer relationships by measuring the likeliness that customers would recommend Bekaert to other companies, colleagues or business partners. In the first customer group, the survey covered 50% of Bekaert’s Top 80% revenue customers and growth accounts. In the next phase (May 2018) the remaining 50% will be asked to participate. The survey coordination and analysis are handled by an independent market research agency, ICMA Group.
  
  Net Promoter Scores for international B2B manufacturing companies on average attain 20% to 30%. Bekaert was very pleased with the first phase outcome of the global NPS Survey and a score of 50%, far above average. More important are, however, the results per business activity and region, from which we can learn to better understand and improve customer relationships and excellence.

2) Value-driven growth

In implementing this strategy, Bekaert is making a clear prioritization of where we want to grow and how we can provide superior value to differentiate ourselves from the competition.

• For the second consecutive year Bekaert achieved robust organic sales growth driven by strong volumes, reflecting a healthy underlying business.  Moreover, our growth created value for the second consecutive year with ROIC (8.7%) well above WACC (8.0%). 
• In 2017 we further increased the market penetration of more advanced products which lower the total cost in the value chain. This particularly applies to ever stronger and lighter tire cord constructions which allow tire makers to produce tires with a lower weight, thinner plies and lower rolling resistance. Ultra-tensile steel cord is less expensive than the conventional steel cord it replaces when considering the total cost of ownership, as it drastically reduces the steel cord weight and as less rubber is needed in the thinner plies. 
• To enable value-driven growth, Bekaert strives to dedicate resources and efforts to those areas of the business where we can create value for our customers and for Bekaert. We recognize that in several of our top businesses we have reached or will soon reach market share ceiling. Based on strategic market segmentation and insight, we have created an ambition model which will help us build a winning business portfolio through adjacency expansion from the core. Several cases were identified over the course of 2017 and are in the pipeline for further exploration. The total portfolio ambition model enables transparent resource prioritization and direction for business analysis, capital investments, mergers & acquisitions, R&D, and talent development. It is shaping a long-term perspective to drive value-creating growth and includes both organic and acquisitive options. The goal is simple: we want to take a leading position in the winning markets of tomorrow. 
• One of the key objectives of the before-mentioned Bekaert Customer Excellence (BCE) program is about driving sustainable profitable growth by providing superior customer value. Hence, the program is a major enabler in realizing this strategy. In this respect, BCE focuses on developing quantified value propositions, an enhanced product portfolio, and concrete growth plans for strategic segments. A value proposition can only work when the real underlying needs of the customer are known and addressed. BCE helps us gain customer insights through voice-of-the-customer exercises and value curve analysis. In some cases, value can be created by developing new products and applications. In others, simple packaging changes can create value as they reduce cost and increase processing efficiency for our customers.

Apollo honors Bekaert as Global Business Partner of the Year In April 2017, Bekaert received Apollo’s ‘Global Business Partner of the Year Award’. This award praises the supplier who delivers consistent high performance, has the highest supply share, and collaborates intensively on joint development projects. It is a recognition for all Bekaert teams engaged in providing excellence to the Apollo plants in India and Apollo’s Vredestein plant in the Netherlands. Furthermore, Apollo has approved two European Bekaert plants to become a preferred supplier to Apollo’s newest tire plant in Hungary. This is yet another example of driving value growth together with our customers.

3) Technology leadership and speed

Our third core strategy is about accelerating Bekaert’s technology leadership and speed in alignment with our strategy to drive value-creating growth. Co-creation is one of the leading principles: we help our customers differentiate themselves in their markets. Our process and product development projects enable fast progress and effective results in all collaboration programs. Find out more in the Technology and Innovation chapter of the Annual Report.

Shining a light on Technology Leadership and Speed

In 2017, the technology shift in sawing wire went extremely fast. 
Over the past years, Bekaert had established a leading position in 2nd generation sawing wire, a structured wire that enabled customers to increase the cutting process efficiency of hard materials while reducing the consumption of diamond substrate: a clear case of total cost of ownership reduction.

However, faster than anticipated, customers made the technology switch to the 3rd generation sawing wire: fixed abrasive or diamond wire. With this technology, micron-sized diamond particles are adhered to a solid core wire, which creates an abrasive cutting tool that can be used in countless applications.

Bekaert took on the challenge to develop a diamond wire that would stand out in performance, diameter and processing quality. The sawing wire team succeeded in developing a solution that is highly advanced and reliable. They demonstrated technology leadership and speed: all key customers approved the Bekaert diamond wire samples after extensive testing. We are now ramping up production capacity progressively and will be ready to grow a position in diamond wire as from the 2nd half of 2018 onwards.

4) Leverage scale, reduce complexity and reach lowest total cost

By reducing complexity and increasing standardization, this core strategy aims to leverage our scale to greater effect. We want to organize ourselves in a very cost-effective way and provide a total cost reduction through effective process and product innovations. 

• The Bekaert Manufacturing System (BMS) is a program designed to ensure manufacturing excellence in all our processes and locations worldwide. BMS brings together the collective effort of all Bekaert plants to drive the lowest total cost offering to our customers. By reducing complexity in our way of working and by better leveraging our scale, we can lower operational costs and increase productivity, leading to increased competitiveness and unlocking resources for growth. 
  • BMS was launched at the end of 2014 and is being implemented according to a strict schedule. With more than 60% of the plants covered at the end of 2017, the improvement actions have had and will continue to show a visible effect on the Group’s results. The program can count on the strong engagement and participation of all employees. 
  • Both Bekaert’s joint ventures with ArcelorMittal in Brazil and the plants belonging to the Bridon-Bekaert Ropes Group are included in the BMS implementation roadmap to enable similar benefits in their operations.
• To keep the transformation impact of past BMS implementations sustainable, Bekaert established in 2017 the Bekaert Manufacturing Academy. This program enables us to keep building our capabilities and to improve and share our standards and best practices, so that we keep evolving our way of working as we build our knowledge base. The Bekaert Manufacturing Academy is one of the transformation academies that has been created under the umbrella of Bekaert University, a best-in-class learning platform to sustain and accelerate the transformation processes at Bekaert.

5) Engage and empower people

Engagement and empowerment of people have been key success factors all along our transformation journey. We empower our teams with responsibility, authority and accountability, and count on the engagement of every Bekaert employee in driving a higher-level performance. 

• In September 2017, Bekaert organized a global employee survey. It was the first time that the company held a survey of all of its employees worldwide. The theme of the survey was ‘Your Voice Counts’ and we invited all colleagues from Bekaert subsidiaries (excluding the joint ventures and the Bridon-Bekaert Ropes Group plants) to participate. Thanks to an impressive response rate of 91%, we were able to get a clear understanding of the engagement level of our employees and which elements are driving it. The total engagement score from 20 667 managers, white collar workers and operators was 82%. Employees especially appreciated the culture of openness towards improvement, the empowerment they feel in their job, the great team spirit and the willingness of their team to get things done. In short, team morale is high. The survey acts as a barometer of employee engagement and provides areas for improvement, which are taken on through concrete action plans. We intend to repeat the survey every two years.

 

• Also in 2017, Bekaert established ‘Bekaert University’. This University will develop our team and talent so that our people, individually and in team, can achieve the best of their potential. Bekaert University is all about continuously building the capability of the individual and the organization. It will also be home to different Academies that are meant to accelerate and sustain the transformation process the company is undergoing.

How to Drive True Engagement in the Workplace Bekaert Lipetsk (Russia) leads the way! Bekaert Lipetsk’s outstanding results in the Global Engagement Survey have triggered the attention of Bekaert teams worldwide. Their approach has now become an inspiring story of empowerment and engagement across the Group.  All 300 employees of our plant in Lipetsk are stimulated to always demonstrate authentic leadership. Respect, care and trust form the foundations of each working relationship in Bekaert Lipetsk and the absence of hierarchical barriers stimulates very open communication. The team feels empowered rather than controlled. The enthusiasm of the team also shows in the performance of the plant. Bekaert Lipetsk leads in many ways.

• As a Corporate Socially Responsible company, engagement is the keyword when it comes to Sustainability. A summary of our 2017-2018 sustainability report is included in the Report of the Board of Directors. Our sustainability efforts and activities are focused in such a way that balanced consideration is given to the interests of all respective stakeholders, including employees, customers, shareholders, partners, local governments and the communities. To underscore our engagement and commitment to drive progress in this field we have defined an ambition and a set of clear short- and long-term targets for each of the key pillars of sustainability.