Bernard – COO, Bernard Controls – France
The COO of Bernard Controls, a company specializing in the production of electric actuators, discusses the importance of oil and gas to his activity and examines his decision to build a permanent business in China.
Bernard Controls designs and manufacturers electric actuators and control systems for industrial valves’ automation. You define yourself as world leader in the nuclear sector, but what is your position in the oil and gas sector and how important is it to your company’s success?
The credibility we have progressively built stems from our experience in the nuclear industry. We contributed to every nuclear plant in France and almost every nuclear plant in China, although the nuclear sector constitutes a niche market for electric actuators. In order to remain independent it became critical to penetrate new markets. We therefore capitalized on our expertise earned in the nuclear sector to slowly integrate the oil and gas market. In order to fulfill this objective, we invested extensively in R&D and proceeded to internationalize the company by developing a local organization and switch from a traditional export company, which manufactured in one place to a company with its own sales teams, own manufacturing and own R&D. The company is now well entrenched in Asia, in China notably. We are also focusing on Southern Europe, Spain and the Middle East where we recently considerably increased our investments. We deliver a proven technology and provide excellent services thanks to the trust and confidence that we build with our customers. At this stage, the oil and gas sector has become more significant than the nuclear industry, thus illustrating our commitment to penetrate this essential field.
Bernard Controls relies on innovation to design and manufacture high-end products. How important is the role of R&D to your company’s success?
R&D is the root of our business, which explains why we inaugurate R&D centers across the world. Our internationalization process relies tremendously on local R&D for instance. The importance of R&D actually deters most companies from entering the electric actuator market. At the moment we invest three times more in R&D than we did 10 years ago proportionally to our turnover.
However, I believe that our local presence constitutes our greatest asset. We are not intending on establishing a local presence in every region but rather to fully consolidate an affiliate before exploring new ventures as our success is gradually depending on customer contact. In certain countries we therefore solely rely on distributors and carefully prepare the introduction of new offices.
You take pride in implementing the lean manufacturing and Kaizen methodologies to enhance efficiency levels within your organization. What does that translate into in concrete terms?
The lean principle consists in removing waste. We aspire to build a company with industrial excellence. We therefore never compromise on quality and invest massively in computer systems in order to increase automation and enhance efficiency levels. For instance Bernard Controls tested its new technologies in China prior to entering its market. Our success thrives on the complementarity between our French and Chinese engineers.
Bernard Controls delivers products and services globally. Could you please provide insight into your strategy to strengthen your international presence? Which subsidiaries are serving as gateways for further international expansion and which regional areas will drive growth and development in the future?
Bernard Controls is mainly involved in Europe and Asia and also possesses a historical branch in Houston. We are obsessed with customer satisfaction, and cannot fulfill this objective if we disperse our activities across the globe too quickly. We have promising prospects in Russia, India, South America and Africa. The oil and gas industry is capital intensive and more global than ever.
Speaking of China, where you have devoted considerable efforts and investments, you were recently featured in an article as a successful French SME confronted with counterfeiting issues in China. What lessons do you draw from your experiences there?
France is home to many technology firms and China represents the land of opportunity for its companies to export their success. Today the depreciated euro is incentivizing French companies to focus on Europe to the detriment of China, which is a huge mistake. When Bernard Controls builds a factory in China, it creates jobs in France because we need to create the transitional functions in regards to project management from here. Opportunities abroad usually imply positive repercussions for domestic employment. Although China is changing a lot with the introduction of new regulations, it still carries a 7% annual growth rate. New niche markets open every day in China and should motivate our domestic players in order to respond to these new needs by positioning themselves as early as possible as qualified partners of choice. Evidently, China also presents a huge opportunity as an export market for companies that have proven themselves in their respective countries. Thanks to our presence in China we have been able to export our services in Thailand, Vietnam and even Latin America. Chinese equipment makers are incrementally becoming more accepted worldwide, although they still carry a negative but erroneous image. We are facing issues related to counterfeiting of course and the only protection is to be permanently present. Any company that plans on growing their business in China needs to accept the counterfeiting risks. Furthermore, Chinese shareholders carry an excellent reputation because they care about the companies they invest in and are not strictly concerned by share prices.
Two years ago (April 2013), François Hollande visited your subsidiary in Beijing to laud the success of French SME’s abroad. I presume it must have been very rewarding to have the French president recognize your company a symbol of French excellence in the world… what in your eyes makes this French specificity so sought after, generally speaking?
It was indeed a huge honor for us to receive the French president and prove that a French company can move abroad while creating domestic jobs. We have an entrepreneurial community with young people and a modernizing financial sector. The French president seized the opportunity to express that industry still very well exists in France and that it comprises talented young minds with optimistic visions for the future. France has amazing engineers who graduate from the most prestigious schools but fails to communicate on this goldmine. There are new financial tools in France that also suffer from an absence of advertising. Traditional banks and financial institutions are very inclined to invest in high-end technologies via the oil and gas industry. France has had difficulties adapting to globalization but this trend is revoked now.
Bernard controls remains a family owned and independent company. These ownership structures sometimes pose problems in regards to growth due to lack of capital and new investments or resistance to re-investment in the business. Has this been the case for Bernard Controls?
Being a family owned company entitles us to adopt a long-term vision, which greatly appeals to foreign investors. The 2008 financial crisis has demonstrated that our model is not obsolete on the contrary because it enables companies to weather economic slowdowns.