By Todd R. Berger
As will be formally announced Tuesday morning, June 1, the Montreal-based geosynthetics manufacturer Solmax has finalized the acquisition of TenCate Geosynthetics, which is headquartered in Pendergrass, Ga. Jean-Louis Vangeluwe, president of Solmax, spoke with Geosynthetics magazine about the acquisition and what he envisions from the newly formed company, which will be the largest manufacturer, seller and distributor of geosynthetics in the world. The questions and answers have been lightly edited for clarity.
There does not appear to be a similar “one-stop shop” for nearly all types of geosynthetics similar to what is envisioned for the new company. What advantages do you see in having a geosynthetics company on this scale?
The geosynthetics market is divided into two parts: The products that serve the environmental containment sector (waste management, mining, aquaculture and shale gas extraction), mainly dominated by geomembranes, and the products that serve the infrastructure sector (transportation, hydraulic infrastructure, building foundations and coastal erosion), mainly dominated by geotextiles. For the first time, one company will connect the two worlds, and Solmax expects to create value by doing so. The idea was to do it globally and not in a too-narrow geographical approach, which would not have created any significant impact. We will now be able to offer the deepest product portfolio and the largest and most technical engineering support, and we envision we will be able to cross-sell products in between the two sectors and offer new dimensioning possibilities.
On the other hand, the critical size and reach we get by joining the two companies will create a true leader able to accelerate the specification, the innovation and the awareness of geosynthetics. Thus far, the industry is highly fragmented, and the few companies focused on developing and promoting geosynthetics have limited financial capabilities and reach either from a revenue, product or geographic perspective. To an extent, the geosynthetics industry’s growth has been disappointing for the last decade, while the need for geosynthetics should be growing as urbanization, environmental constraints and population grow. This is clearly a lack of leadership connected to an industry that remained too fragmented for too long.
There is some overlap in products between the two companies, particularly in nonwoven geotextiles. Will the newly formed company continue to manufacturer, sell and distribute each company’s products where there is overlap?
There is no real overlap. The geotextiles produced by Solmax were for internal use (vertical integration where it makes sense). This deal is a complementary deal, which is great to drive as from an employee perspective, it opens a lot of opportunities to learn and grow, but it is challenging from a company perspective, because it requires strong capabilities to connect all the wires on the backstage and create value.
There seems to be a strong corporate cultural overlap between Solmax and TenCate Geosynthetics in emphasizing stewardship to the environment and sustainability. How do you see the newly formed company further contributing to these shared corporate values?
Yes, sustainability will remain at the core of the business. We have appointed a corporate social responsibility (CSR) manager who will report directly to the CEO. We are currently analyzing all sources of information to identify how sustainable geosynthetics are, where we stand as a company to that respect, and what would be our key priorities to help reduce greenhouse effects and climate change. We are also evaluating different available frameworks to decide how to monitor our future actions in terms of carbon footprint. Today, sustainability is as important as finance. If you don’t care, then you won’t find investors to help and grow your business in the near future. And more than that, it is already part of our mission, from both companies, that we want to reduce the impact of human activity on the environment. We will also participate in the International Geosynthetics Society (IGS) Foundation and be present, as much as we can, at most activities that will reinforce the awareness of geosynthetics. We hope the industry will continue to consolidate and support our efforts to grow the market share for geosynthetics. There is still a lot to do.
What are the economic benefits for customers of the newly formed company? Please discuss engineering, sales and distribution in your answer.
For engineers, we will become an essential technical touch point for dimensioning and will give access to all types of geosynthetics, everywhere. We can basically work with them on any challenges that connect with containment, stabilization, separation, erosion control and drainage. We will keep working to support the engineering community. We will never replace them but will help them to design more often with geosynthetics.
For our customers, we will solve a lot of issues that come with site management as they will have, again, one common touch point for supply. We will be able to offer an interesting package of products to the distribution network, which will open for more possibilities. We will have the financial capability to accelerate innovation, reinforce the engineering side of geosynthetics, lead businesses toward value-added products and reduce commoditization. We will have the size to undertake some changes in the way we operate by, hopefully, bringing more digitalization to the industry, easing the way of doing business with our customers. We will have a single focus on geosynthetics and build bridges between the two sectors of geosynthetics. We still don’t know what we will discover, but we are certain it will bring a lot of new opportunities for growth. Then, I guess it also depends on the customers themselves. They will now have access to a giant in the geosynthetics industry: How can they benefit from it? They will have to think strategically to take advantage of this new opportunity.
The combined company will have an even greater number of offices and manufacturing plants all over the world. What markets are you particularly excited about entering under the newly formed company? Where do you envision the greatest opportunities for growth in the use of geosynthetics?
The U.S. market is already well consolidated with strong companies and brands. It is a market where we can definitely enhance the offering of value-added products and bring geosynthetics to a new level of complexity by answering more complex and technical requirements. So, the North American market remains a very interesting market where we could play a role as leader.
For Asia, the company will now have two manufacturing plants in China, and we believe that to play a dominant role in China, you do need to produce in China, with Chinese workers and by adapting to Chinese needs. China will experience significant growth in engineering building materials.
Europe remains very fragmented, and companies tend to focus on their technological knowledge rather than to have a consistent market focus. We believe this is a mistake. Our objective will be to continue to enhance our competitive advantages in Europe—and Africa.
What is the overarching goal of Solmax making a purchase of this magnitude? How does it fit into the company’s strategic plan and vision?
Geosynthetics is our passion. We were absolutely delighted to create a true leader to lead the change and bring geosynthetics to new heights. TenCate was the perfect company to join with Solmax. Same sense of quality, same footprint, same vision, same dedication, same passion for geosynthetics. This is just the perfect fit to start creating value and to grow the geosynthetics industry as we go.
Todd R. Berger is the senior editor of Geosynthetics magazine.