Old business, new chemicals

Family-owned chemical distribution company HugoHaeffner Gruppe is committed to adding value to the supply chain for the benefit of its customers. Emma-Jane Batey spoke to the managing director, Derk Proff, to find out how this is being achieved.

Founded in 1903 in Asperg, Germany, the chemical distribution company HugoHaeffner Gruppe remains a privately operated, family-owed company today. With no need to work with banks for investment funding, or please shareholders with pressurised sales targets, the company has been able to establish a solid business, with a loyal workforce and a steady development programme.

But this steady, long-term approach has not stopped a dedicated commitment to progression and impressive results, as the managing director, Derk Proff, told Industry Europe. He explained, “Our business has continued to succeed for more than 100 years because we have always been focused on meeting the changing needs of our customers, and maintaining the pursuit of adding value to our service.”

Active across segments

HugoHaeffner Gruppe is active in five main segments; water treatment and metal surface treatment, paint and ink additives, food additives, detergent and household products additives and lubricant additives. It has a wide range of customers and products in each of these sectors, all of which are geographically focused on northern continental Europe as their main market.

A key aspect of the HugoHaeffner Gruppe differentiation is its three point-product and service development programme, each of which works together to ensure the needs of clients are met while supporting the commercial aims of the business. Mr Proff said, “We are much more than a typical chemical distribution company, particularly as we’ve focused on stepping away from having a commodity-driven product portfolio to more specialities, even though we are still able to service this area for our existing clients with an excellent approach. Today, about 40 per cent of the Hugo Haeffner Group’s turnover results from speciality chemicals sales. Our

three main advantages are the fact that we can develop our own products, we buy patents in order to deliver unique products and we offer a single point of sales contact. Each of these areas is carefully supported so they continue to add value across our service.”

Continual advancement

In terms of developing its own products, HugoHaeffner Gruppe adds value by buying in bulk from many of the major chemical producers across Europe and then implementing a series of beneficial processes, such as drumming and blending to create product variations and using its own extensive warehousing facilities and tank farms to guarantee just-in-time delivery. The delivery itself is then carried out using the company’s own distribution fleet, ensuring a full supply chain service.

One such product that HugoHaeffner has developed in order to add value is a boron free flame retardant material made of silver-based salts, which are non toxic, and works perfectly for cellulose insulation. It adheres to all the strictest REACH demands and has the patent pending; HugoHaeffner expects it to be well received by its customers.

The buying of patents adds considerable value to the continuation of the long-term success of HugoHaeffner, especially as the company works in close conjunction with the technical department at the nearby Hamburg University. Mr Proff explained, “Buying the licences for existing patents allows us

to develop, produce and then market an advanced version of the product, safe in the knowledge that it is unique to us for the duration of the patent – often around 20 years. This gives us a considerable commercial advantage in that we are then the only chemical distribution company to offer that particular product, which, if we have done our job properly, will be a welcome addition to the portfolio of our customers!”

A patent recently acquired by HugoHaeffner, with the plan to continue to develop further, is a special biological disinfectant product for the food and beverage industry. Especially suited to the needs of the huge German brewery industry, with which the company has a strong affiliation, the product will be specifically produced and marketed by HugoHaeffner.

Sales with expertise

The marketing aspect is important as the company’s unique approach involves skilled technical experts dealing with the customers’ requirements, with the sales aspect then handled by regional sales teams. Food scientists are working on the brewery disinfectant product’s marketing activities, with construction industry experts working on the flame retardant product. It is this single sales force that includes technical experts, which helps HugoHaeffner stand out from the competition, as its client-facing teams are not simply focused on making quick sales.

As HugoHaeffner looks toward the next century in its business story, it aims to continue to service its main customer base in northern Continental Europe and plans to expand its technical capabilities in southern Germany with the opening of a new distribution centre in 2013, following an investment of about €15 million. The centre will be equipped to adhere to the very tightest European food standards legislation, with a second centre planned for 2017 in northern Germany. Mr Proff concluded, “We do not plan to expand geographically, but we will be expanding our product portfolio and adding more value to our chemical distribution service. We will be adding new patents and new products as we see growth in enlarging our speciality products portfolio. We are also open to potential acquisitions of companies that fit into our growth plans.” n