Exclusive Interview Growth Through Diversification — Packaging Specialist Gerhard Schubert’s Corporate Development Strategy
Gerhard Schubert, founder and Chief Executive of the company which bears his name, is full of ideas. The automatic tool changer is by no means the end of the road for him. Between now and the next Interpack in 2014, he wants to develop a packaging machine that does not need a control cabinet.
PROCESS: Mr. Schubert, your company is named after you, Gerhard Schubert. Would you describe your name as an agenda?
Schubert (laughs): If in today’s world you are running a company which is the world market leader and you want to stay out in front, then you have to continually work at it. If you slack off for a year, you may soon find that you are no longer the front runner. In that sense, packaging machines really are my agenda, and that is where my major interest lies.
PROCESS: You say that you are the world market leader in top-loading packaging machines and cite a 30 percent market share. How much higher can you go?
Schubert: We still have some additional potential, but naturally it is difficult to increase what is already a large market share. At 30 percent, you are already a big player in the industry, and your competitors do not readily give up market share. The company has done very well but has not continued on the growth curve. I am going to have to diversify. In other words, growth will come through an expansion of the portfolio.
PROCESS: What will be the general thrust of your diversification strategy?
Schubert: My presence is no longer as vital in the top-loading machine business. I will now turn my attention to fillers for liquid and viscous products and get started with tube fillers. We have a lot of experience with ultrasonic sealing. Existing tube fillers use hot sealing, and nobody has yet come up with a workable ultrasonic sealing solution. We have run ultrasonic sealing trials, and the results show that our tubes are sealed better than the tubes which are currently on the market. We have the expertise to seal tubes using ultrasonic technology and we want to exploit that expertise.
PROCESS:A diversification strategy can be based on acquisitions or organic growth. Which do you prefer?
Schubert: Several years ago, we were in the bidding for SIG, but we pulled out. At the time, SIG had 1500 employees and Schubert had only 550. The ratio was 3:1, and in addition SIG was a direct competitor. My gut feeling was that the acquisition was not a good idea. It would have been interesting to find out whether the takeover would have been successful, but acquisitions are always a risky proposition.
PROCESS: So it looks like organic growth?
Schubert: We have received a query from the Italian market regarding a tube sealing solution. If we acquire the contract, we plan to integrate tube sealing as well as labeling, case erection, etc. into the TLM machines. However, we do not necessarily have to produce the filling stations ourselves. We can buy in third-party equipment such as Fuji tubular bag machines or Pago labelers.