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Following the announcement made by the Austrian company Egger Group about the acquire of the industrial assets of Masisa Argentina, Thomas Leissing, spokesman for the group's board of directors, presented back in August in the City of Buenos Aires, the plans that the company developed for the domestic market and the projection of its operations within Latin America.

Leissing also confirmed that Egger Argentina started its activity October 1, becoming the group's first subsidiary outside Europe.

During the meeting in August, Leissing outmarked the expectations the company has once with their arrival to Argentina and highlighted the professional and human quality they observe in the management team.

Throughout the meeting, the manager talked about the investment plans for the Concordia plant in order to adapt it to Egger's production and quality standards; he also said that the plant will help the company expand their products variety starting from the local production and the incorporation of inputs from its global portfolio. Leissing alos announced that the Placentro network will remain a priority commercial channel, although it will change its name and add products and services for professionals and carpenters.
- What are the expectations that Egger has once with the arrival to Argentina?
- We are very happy to have been able to complete this purchase of the industrial assets of Masisa Argentina, and we are also very anxious to start working as Egger Argentina. This operation is very important for the Egger Group because for the first time we are going to produce outside Europe.

In fact, in Argentina will be our first production plant outside Europe. We think it is the right time to make this investment because there are going to be many changes in the country. We are a company that is growing and there are some limitations in Europe for future expansion, mainly derived from the lack of wood, because even in Eastern Europe, the growth rate is still very low. Outside Europe, we sell products worth 200 million dollars annually, but we know that in order to enter a stage of growth in each of the markets we must participate locally. And that is the strategy we are applying with our arrival in Argentina.

- When did the company take the decision to come to Argentina?
- We saw that there is a need to go towards a more open economy in the country and that prompted us to make the decision. But we would not have invested from scratch with a project of a type we call dreamfield because there were already two very important actors on the market. So the decision was to get through the acquisition of one of these actors, in this case Masisa. There are many similarities between what Masisa Argentina is and Egger's philosophy. And that's very good. In addition, we see many things in common in how the Argentine culture treats the design and values ​​the quality, in particular in the furniture sector, and how we put it in Egger, with our clients.

- What is Egger's portfolio made up of?
- We use the boards we make in our plants for three specific things. First, to reach directly the retail segment through the design of furniture for offices and homes, which represents 75% of the portfolio of the group. Clearly this will be strengthened and fed back from the Concordia plant. Another segment in which Egger operates is the construction, mainly with its floors. The third segment is that of complementary products, such as tapacants and laminates, solutions from the melamine base board addressed to the carpenter or end user. This portfolio will be available in Argentina, because Egger wants to offer all of its variety of products to the Argentine market.

- What are your plans for production in Argentina?
- For Egger, the industrial part is very important and the company wishes to keep it at a high level. We are continually investing in new machinery and equipment. We put a very strong focus on the reinvestment of profits in the different units, both administrative and productive.

In the case of the Concordia plant we see that it has development opportunities. We will apply some investments to improve technology and expand capabilities that are going to be analyzed with the local team, to the extent that the market goes along.

The acquisition of the Concordia plant is not an isolated decision, but the unit joins the Egger Group, which will now have around 9,000 employees. Our policy as a company is to invest a lot in training and in generating a team. We remain a family business and one of the key points for the success of our strategy is our people, their training and growth.

We are very respectful regarding the local culture, but at the same time we consider that all the subsidiaries must maintain the same spirit of Egger, as to be able to develop the businesses. That's what unites the company.

In the case of Argentina, we emphasize communication and open minds to new ideas. This will greatly facilitate the integration process. Concordia represents an excellent base for the future growth, since the supply of wood is assured, and we also have a chemical plant and a database of very valuable people. In addition, we are clear that there are many opportunities to gain productivity within the plant with investments in existing machinery.

- Do you have any estimates of these investments?

- As a reference, the Egger Group invests around 400 million dollars globally, every year. Of that figure, about 80 million are to keep the plants running in optimum conditions and the rest is destined for new technology and digital investments.

The latest investments have focused on the digitization, automation and process productivity improvement. In the case of Argentina, we did not come to transfer production from other sides, but to strengthen Egger's position and its regional insertion.

As I said, we still have to sit down with the local team to define the details. We are aware that we have to invest in the plant because it was dedicated to supplying the Argentine market and our intention is to grow regionally, so that future investments will not only be to strengthen local production, but to have more volume to go to other markets. These investments will be in two stages: first, to improve the existing installation on environmental and safety issues and a second stage, where we think of a volume growth for a new facility, aimed at serving other markets.

Surely, we will also integrate a power generation plant that will take advantage of the waste that can not be used in the production of boards.

- Considering that Masisa has been a leader in Argentina in boosting the use of the board and hierarchic it through the design, what strategy will be taken with Egger Argentina?

- We know that Masisa is a step ahead of the competition regarding the way in which it has introduced and commercialized the product in Argentina and, in general, in the region. Even so, Egger has a much broader business model, not only in design, but also in quantity of textures.

But Masisa introduced in Argentina a marketing strategy that raised the level of competition in the local market for boards and furniture, with a very high degree of influence on designers, architects and manufacturers. Now, clearly, we are entering a new stage of growth, combining the 24-year local experience with a much broader product portfolio and a strategic vision of a world leader.

In this strategy we will incorporate new products, starting from the local production all the way to importing the products. Fundamentally, the largest volumes will be produced locally, but we will bring a range of complementary products that, by the scale of production, we will not manufacture locally.

- Within that strategy, what will happen with the Placacentro network?

- The Placancentro network that Egger acquired in this operation includes Argentina, Uruguay and Paraguay and reaches 57 businesses that we do not own, but belong to 43 different owners throughout the network, mainly family SMEs.

In turn, Network M, which brings together more than 9,000 members, also entered the operation because it is associated with the Placacentros network. For Egger, the network of Placacentros is fundamental, and we find very interesting the way in which it has developed and we will make it our distribution network.

We will strengthen the existing business model with the possibility of incorporating new products, so that for each of the Placacentros the possibilities will be greatly expanded under the Egger brand.

- Will they keep the brand?

- The brand will change, not only the brand Masisa, but also the Placacentro brand. It is not yet defined what will be the new brand, but this is going to reveal in the coming weeks. For that, the local marketing team will travel to Austria and will visit the plants and shopping centers to understand the best synergy between the two companies and create the best business model, but maintaining the concept of what today means the Placacentro.

In addition, we are positively surprised to have found the Red M program: we have the same program in Europe, where we cultivate a very close relationship with the carpenters. We will also enhance that brand, but it will change its name. Egger is a strong brand at level global, with a broader portfolio of products, so we will make a change to the new brand and we will begin to work on its positioning in the Argentine market quickly.

Thomas Leissing weighed the advantage that Egger has in Argentina in the face of a more restrictive supply context in Europe today: "Due to the subsidy scheme that exists in Europe for bioenergy, sawmill waste is mainly going to production of pellets, instead of going to the production of boards. It is a profound cultural change that impacts our activity. The compensation of the lack of wood that this provokes for our plants we do it through the use of recycled material of the constructions of wood of different cities. But you always need the forest. In the case of Argentina, we have signed a contract to supply wood with the Masisa forestry branch in the country for a long period, which guarantees the supply of raw material for a long-term operation."

Source: Asora Madera&Tecnología