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 € 4.4 billion in annual revenue.

What we do

We seek to be the best in understanding the applications for which our customers use steel wire. Knowing how our steel wire products function within our customers’ production processes and products, helps us to develop and deliver the solutions that best meet their requirements and – through that – we create value for our customers.

Transforming steel wire and applying unique coating technologies form our core business. Depending on our customers’ requirements, we draw wire in different diameters and strengths, even as thin as ultrafine fibers of one micron. We group the wires into cords, ropes and strands, weave or knit them into fabric or process them into an end product. Our products reduce friction, improve corrosion resistance, or enhance adhesion with other materials

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 in 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 the trust, integrity and irrepressibility that bring our employees worldwide together as one team, form the fundamentals of successful partnerships, wherever we do business.

Our strategy

Our strategy is aimed at consistently driving value creation for our shareholders by cost effectively creating superior value for customers. Our vision and core strategies form the foundation of a transformation of our business towards higher level performance. They drive our focus over the coming years and have also been the basis of our priorities and actions in 2016. Five Must Win Battles have been launched to give our core strategies a much more immediate focus, with dedicated resources and close progress monitoring. This approach has been very successful in the past two years. Must Win Battles receive a special level of attention from throughout the entire organization, we prioritize resources and focus on them, and they feature heavily in individual and team objectives, which is key to their success.

Our Vision

Consistent with our better together aspiration, we relentlessly pursue to be the preferred supplier for our steel wire products and solutions, by continuously delivering superior value to our customers around the world.

With this Vision statement, Bekaert has explicitly determined its ‘field of play’: it describes what we want to be, where we want to compete and invest in, and how we want to differentiate ourselves.

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:

Drive the customer into the heart of our business
Value driven growth
Technology leadership and speed
Leverage scale, reduce complexity and reach lowest total cost
Engage and empower people

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 insights 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.

In 2016 we launched the Bekaert Customer Excellence program (BCE). BCE aims to put customer-centricity at the core of everything we do, from technology to operations to marketing and sales to supply chain management. BCE will help deliver on Bekaert’s first two core strategies: ‘Drive the customer into the heart of our business’ and ‘Value driven growth’ as it aims to achieve four key objectives:

to anchor a customer-centric mindset across the organization
to differentiate ourselves in the market
drive sustainable profitable growth by providing superior customer value
and build a best-in-class commercial organization

The pilot programs launched in 2016 attest to the value creation capability of the program and its promising potential. In 2017, BCE will start evolving from a program into a new way-of-working that takes commercial excellence to the next level.

Among others, BCE is driving changes in customer service models, so we can address customers’ needs more effectively through better account planning tools. The pilot programs also enabled us to bring new product and service offerings to the market faster and through the right channels.

Customer centricity goes far beyond the commercial relations management between Bekaert sales and customers’ purchasing teams. It is a mindset among all employees to always put the customer first. To help our employees better understand their role in driving the customer into the heart of our business, several actions were implemented and events were organized in 2016.

A European Customer Week was held with a varied program including information sessions, workshops and customer visits. The intention was to reach every employee in Bekaert’s plants and offices in Europe and build a better understanding of who our customers are and how we can all contribute in serving them better.
The Shop Floor Customer Awareness program in India encourages Bekaert teams on the shop floor to get to know their plant’s key customers. They build up strong understanding of the key drivers for each customer, and adapt behaviors and practices to ensure that they can maximize the satisfaction of every customer. Customers are aware of this program and have visited the plant in 2016 to witness it. They came away very impressed and in 2017, shop floor teams of Bekaert Ranjangaon and various customer sites will visit each other’s operations to further broaden awareness and understanding.
The Bekaert annual target framework, which sets the objectives, goals, strategies and measures for the company and for every individual employee now clearly deploys the five core strategies into every employee’s priorities for the year. As a result, ‘driving the customer into the heart of the business’, like the other strategies, has become a priority within everybody’s personal development actions and performance review.

Becoming the preferred supplier to our customers around the world is Bekaert’s ultimate ambition. Customers put their trust in our ability to provide them with products and services that help them realize their ambitions. We therefore focus both on current and future-oriented excellence actions. The longer term perspective is particularly important in co-creation programs.
On 12 October 2016, Bert De Graeve, Chairman of Bekaert, and Mr Masaaki Tsuya, CEO and Chairman of Bridgestone Corporation, signed a long-term development partnership agreement. This agreement allows Bekaert and Bridgestone to continue to jointly develop product and process innovations to enable the design of new, high performing sustainable tires. The development partnership entails concrete research opportunities for Bekaert’s technologists and illustrates the innovation power of our company, as a trusted partner of the largest innovator in the tire industry. The contract was signed in Tokyo during an official State visit to Japan by their Majesties the King and the Queen of the Belgians.

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. In 2016 we have successfully boosted value creation in the product mix by launching more advanced products which lower the total cost in the value chain. This strategy envisages both organic and acquisitive growth. Moreover, it also drives divestment decisions for activities that do not have the potential to create value over time.

The impact of high-margin contributing acquisitions and the low-margin or loss generating divested activities of 2015 came to its full effect in 2016. This combined effect added to Bekaert’s profit performance and strengthened our market share in our target markets.
On 28 June 2016 the Bridon-Bekaert Ropes Group started business. The new group was established through a 67/33 joint venture with Ontario Teachers’ and merged the global ropes and advanced cords businesses of Bridon and Bekaert. Bridon-Bekaert Ropes Group (BBRG) will leverage the scale and complementary strengths to become the world’s premier ropes and advanced cords supplier. The deal was concluded during a major downturn in oil & gas and mining markets and will not immediately lead to accretive margin growth in the Bekaert consolidated statements. However, the shareholders and the management of BBRG strongly believe in the potential of the group and in the strategic actions that are being implemented to improve the business portfolio and footprint, and to create value over time.
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. Based on strategic market segmentation and insight, we have created an ambition model which will help us build a winning business portfolio. This total portfolio ambition model enables transparent resource prioritization and direction for capital investments, mergers & acquisitions, R&D, and talent development. It is shaping a long-term perspective within which strategic choices are being made to drive value creating growth.
One of the key objectives of the above-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.

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.

Leverage scale, reduce complexity and reach lowest total cost

This core strategy is designed to leverage our scale to greater effect, by reducing complexity and focusing on our opportunities and strengths with more standardization at best-in-class levels. We also want to ensure that in the process of providing the best value-creating solutions to our customers, we 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. This program brings together the collective effort of all Bekaert plants around the world 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. Hence, we can raise our competitiveness and unlock resources for growth. In 2016, Bekaert accelerated the BMS implementation roll-out. More than 2500 improvement actions were implemented in 20 Bekaert plants worldwide. This program can count on the strong engagement and participation of all employees. The results are clearly visible in the plants and in the results.
The success of BMS has not gone unnoticed among our partners and joint-ventures. Both Bekaert’s joint-ventures with ArcelorMittal in Brazil and the newly established Bridon-Bekaert Ropes Group have kicked off BBMS (Belgo-Bekaert and Bridon-Bekaert Manufacturing System, respectively) to enable similar benefits in their operations.

Engage and empower people

People engagement and empowerment 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.

The success of Bekaert’s excellence programs, BMS (Bekaert Manufacturing System) and BCE (Bekaert Commercial Excellence) lays not only in the respective program tools and dedicated deployment approach but is also a result of the explicit engagement of our teams around the world. They are making things happen that go beyond initial expectations. In the course of 2016 we also launched a Supply Chain Excellence (SCE) program, which covers the total supply chain, with a primary focus on Sales and Operations Planning (S&OP), inventory management, production planning and master data structure and content.
Also in 2016, Bekaert kicked off the implementation of BeCare, a new, global safety excellence program. BeCare aims at creating a no-harm, risk-free work environment for all our employees and for anyone working at or visiting our premises. The BeCare program has been designed as a roadmap to realize our safety objectives. This roadmap will help us define and implement the safety practices that benefit all Bekaert locations worldwide and ultimately, lead to better safety performance and a true safety culture.
The Bekaert annual target framework, which sets the objectives, goals, strategies and measures for the company and for every individual employee now clearly deploys the five core strategies into every employee’s priorities for the year. As a result, the company’s core strategies are translated into concrete actions and development measures for all Bekaert colleagues.
To understand the overall engagement level of our managers and their alignment with the Company’s strategies, a Pulse Survey was organized at the end of 2016. The excellent response rate (87% of the 1500 managers invited to participate) was a first indication of the very positive results in terms of sustainable engagement. The Bekaert managers especially appreciated the clear communication on the company’s strategic direction. They also confirmed that they understand how they can contribute to the results, now and in the future. This Pulse Survey for managers was a first step towards a global, ‘all-employee’ engagement survey which will be organized in the second half of 2017.
Early 2016, we upgraded our internal communications platform by creating and launching a new Bekaert Intranet. It is a place where employees can share and obtain knowledge, find relevant information fast, connect with colleagues, collaborate with team members on common development programs, and actively contribute to impactful communications across the company.

In July 2016, each member of the Global Leadership Team received a Customer Excellence trophy along with the privilege and responsibility to pass it on to a colleague who deserves recognition for his or her outstanding commitment in customer centricity. After two months, each trophy is to be passed on to another colleague, with a motivated nomination praising the next receiver. This way, the 40 trophies originally granted, gradually find their way across regions and functions, and engage our employees to share excellent customer centricity testimonials throughout the organization.