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					                                                    Managers Meeting
                                                                                              29-30 November 2006

Referat:

Kopi:




Since last time
PTN welcomed – a particular welcome to Mr. Andrzej Baron who is the new manager for Abena Poland.
Initially, the activities which have taken place since the last Manager Meeting in Oslo (Mai 2006) were
reported on.

Abri-Flex
The machine is now running and we have initiated the largest campaign in the history of Abena Group, in order
to promote our own produced new Pull-up products. All customers who buy incontinence products at Abena
are involved in the launching of these new products. So far, the participants have received positive feedback.
The launching and the conversion will gain speed at the turn of the year (2006/2007), as most participants will
launch the new products and make the conversion then.
We have a really good product – but it is important to keep the products at the high price level, because at the
moment the pull-ups are not products where we should compete on prices. It is rather quality at the same price
as the other competing products.

Abri-Man
Abri-Man is now being produced on our proper Abri-San machine. This means a very competitive product – at
the same time, we have increased the absorption capacity 30-40 % compared to competitor products. The
product has been well received by the customers/users and we expect much of this product. We can earn good
money on Abri-Man - a coverage ratio of 50-70 % is realistic, compared to SCA prices. Both Abri-Man and
Abri-Flex are suitable for retail stores (pharmacies etc.). It is therefore obvious to promote the products at these
places so we can increase sales through these sales channels.

Sales Manager Meeting
A Sales Manager Meeting was held in September in DK. Main focus was directed towards our new
introductions of Abri-Flex and Abri-Man. We had also set aside plenty of time to discuss our range – and what
we expect to introduce in 2007 of improvements/new products.

It was a positive meeting with plenty of useful discussions about improvements and experiences from the
different markets.

Another item on the agenda was better control of what we call “Crisis Management”. Unfortunately, we often
experience that our sales representatives in our subsidiaries give up too easily in relation to customers and do
not use the “right” arguments to turn around the situation. We agreed to better inform about possible problems
– and equip the sales representatives with an In-house argumentation sheet, so they are able to prevent
problems from growing bigger. Generally, we need to improve “Crisis Management” in subsidiaries – maybe
through a better knowledge of our products or direct training in “Crisis Management”.
The date for the next Sales Manager Meeting has not yet been determined – but possibly in spring/summer
2007.

News from Abena International
Abena Int.’s Market Strategy has changed over the last 6 months. From having single/few distributors on the
market, we now make conscious effort to find more distributors in countries which do not live up to our
expected sales figures.
In practice, this means a new approach with regard to export compared with the previous, where we passed on
new customer inquiries to our distributors and hoped they could serve the entire market. Should it happen
today and we wish to have more customers in a certain market, we will take care of the customer inquiry
ourselves and assess whether it would be a suitable distributor.
In countries where we have obtained good export and have a credible and loyal partner we will recommend that
he becomes Partner. To be a Partner means that he obtains the right to specific privileges and is treated almost
as a subsidiary. It requires though, that he satisfies certain criteria which we establish and thereby shows the
loyalty and commitment that we wish for.

Finances=the Group
The financial development in October has turned to a plus with a total result of 1 mil. Euros. Expectations for
the annual total result are 3 mil. Euros. Depreciations are currently 1.000.000 Euros per month, which
obviously affect the result. Remember that Abena’s depreciation policy is aggressive (5 years).

Overall, we have raised prices in all our business areas in 2006, and we expect similar rises next year in order
to improve results to the desired level.

Market Development
In 2006 we have developed 4 new innovative products (Abri-Flex, Abri-Flex Special, Abri-Man and Abri-Form
Air Plus) which have helped us to assert ourselves as an innovative producer. We should like to keep this
position among the producers – and communicate it to our customers/potential customers. It was suggested to
make an Action Plan for new products in order to better structure our market developments
(launchings/campaigns/introductions etc.). This enables everybody in the subsidiaries to be prepared for
introductions and the expected dates.

The trend among producers is breathable products and on the market we already see different producers who
bring their solutions. There are also producers who try to “cheat” and use textile-like products so the user have
the sensation of wearing a breathable product (like Ontex).

The latest thing we presented is a Tena Slips (all-in-one) product in an Air Plus version which is being
promoted in the East European countries. It is not yet seen in West European Countries (possibly only a
question of time and maybe dependant on their result with Tena Flex).

It was discussed how to set up a measurement of “breathability” in order to promote ourselves on this in
relation to competitors.

This raised some interesting questions which we will continue to work on this coming year (LNE) – for
instance: What is the significance of the degree of breathability for the user? Can breathability be scaled? Will
the use of breathable products minimise total costs for nursing homes and to which effect?

Competitor status (commentaries in rotation)

SCA (Tena)
UK: Has raised prices 5-7 % in 2006. (Maybe because they will introduce Air Plus products)
PL: Sells Tena Slips Air Plus at similar price of ordinary products. Promotes Pull-ups.
DK: Fight for their market share (40 %)
SE: Has introduced Air plus products (anatomical diapers) in tenders. Targets Paperpak customers.
NO: Tranquil at the fair – promoted only their “Night dry + Skincare” range. No other incontinence products at
the fair.
NL: Strong with Tena Flex (at the institutions). On the Homecare market strong with Tena Pants. Keep prices
high on the NL market.
DE: Have send out price raises the last months.

Tyco
UK: The factory is for sale. No price rises in UK in 2006.
NL: Tries to find alternative sales channels for marketing their products.
Hartmann
PL: Problems with service – reduce employees. Keep an aggressive price policy.
DK: Pulled out of Denmark
NO: Has a problem, because they use Medeco as distributor (which sells its own incontinence products).
NL: Has lost all credibility because of misinformation about absorption in the different tenders.
DE: Is very price aggressive in parts of Germany (buys the customers)
SE: Dumps prices on the Swedish market in order to penetrate.

TZMO
PL: About 50 % market share. Fights directly with SCA – has only Air Plus products. Has had quite some
replacements of staff in the north of Poland.
NL: Has run tests on hospitals – but thrown out because of bad quality.
DE: Tries to find loopholes and offers 30 days of test for free. Wins customers – but tend to lose them again
due to lack of service.

Ontex
UK: Still in UK but has left bad customers
NL: Medeco sells on the NL market – has reduced quality to meet demands for lower prices.
PTN: Still loses money and has made major price rises on retail products (10 %). Has to find a solution with
the owner by the end of December.

Paperpak
SE: Very low prices on incontinence products. Earn the money on under pads. Small price rises are seen – but
on an over-all basis they lose money every day.
UK: Under severe pressure. 3I openly wants to sell Paperpak – but has difficulty in finding a buyer. Do not
participate in fairs in UK.
DE: Low prices – tries to “buy” entrance into the market. The Formazell group leaves them by 31/12/06.
NO: Do not participate in fairs but is aggressive on prices (tenders).

Company presentations:

Abena A/S:
Price rises again by 01/01/07 – due to rising prices from sub-suppliers. A general price rise on incontinence
products of 3 %. Abena A/S has major market shares in DK – has a sale per capita of 15 Euros. Focus on
concepts which suit the Danish market.

Abena UK:
SCA has raised prices 5-7 % and will probably raise prices again during spring 07. Abena UK will where
possible make similar price rises in UK. The biggest obstacles on the market are: E-auctions (destroy all
healthy price policy) and rationalisations on the number of suppliers (public contracts). Works determinedly on
increasing market knowledge of Abena – with the aim of becoming one of the main suppliers in UK.

Abena PL:
Stable prices – no expectation of price rises in 2007 at Abena PL or at the competitors. Largest obstacle is
political insecurity about better support to welfare, and that social welfare is not high priority. Is currently
building 3.000 m2 storage facilities – expected to be ready by 01.02.2007.

Abena-Finess:
Has divided the company in two business units:
Abena AB = B.U.S (Business Unit Sweden)
Finess Hygiene AB = B.U.P. (Business Unit Production)
Price level on the Swedish market is 20 % under the acceptable level due to a strategic price war between
providers on the SE market. The biggest obstacles on the SE market: Low prices and bad planning from Abena
Production/Abena Int. concerning product launches. Has introduced specific bonus arrangements for good
customers, so they obtain bonus if they buy the agreed amount.
Abena DE:
The 2 German companies will fuse this fiscal year and will from the coming fiscal year form a joint business
unit with subdivisions. Still price aggressive competitors on the market and in certain low price areas there are
flat rates of 19 Euros per month per patient. A change in the health care reform in 2007 which will influence
price levels is expected – the direction of this change is not yet known.

Abena Hygiene AS:
Downhill prices in Norway. Even Tyco and Medeco have low prices. Abena No has about 2 % of the NO
incontinence market – which is estimated to be at 100 mio. Euros. So there is plenty to do – but some of the
obstacles are expensive logistics/transportation in NO. Abena No has closed their stock and receives now all
items directly from the stock in Denmark and out to the customers (should on an over-all basis be cost-saving
and make them more competitive). The goal for 2007 is to increase the number of Abena distributors in NO to
15.

Abena BV:
Holland continues to have stable prices – maybe with a small tendency of downhill prices. The biggest obstacle
on the NL market is the lack of a similar product as Tena Flex. They wait for a belt-product sometime in 2007,
so we can compete against SCA.

Commercial products (by Peter Hald):
Price rises from our sub-suppliers are on the way. Paper: +3-7 %. Napkins: +3-5 %. Plastic: +3-5 %.
Aluminium foil will also rise because the sub-suppliers will rather sell to other business sectors. Commercial
products are good as a supplement to the business area because of good earnings. Obviously, it is beneficial to
buy as much as possible directly from the producers because it gives better cost prices and no additional costs
are added from DK.

Commercial products (by Grete Müller)
Even though we had some annoying problems with the vinyl gloves in the beginning of 2006, we are now back
on track again. We have increased our over-all sales volume and we have now the size to be able to keep the
prices – at least for the next 3-4 months. Now there is also a Delta vinyl glove – please use this if you compete
on prices (France ???).

Latex has experienced the highest price rise in history in 2006 – but this has apparently changed and we note a
fall of 5-7 % in prices in the beginning of 2007.

The quality of Latex is OK – but it is common knowledge that Latex gloves are no longer “pure” Latex gloves
because filling materials are added due to high latex prices. This can provoke allergic reactions for some – but
this applies to all companies which imports latex gloves from the Far East. More and more are buying Nitrile
gloves so Grethe has found a new supplier who can supply the desired volumes at the right price.

Increased growth in the coming fiscal year – how? (Can we obtain +25 %)
HL: Increase awareness of Abena/differentiate Abena from competitors/good image/same prices.
NO: Start selling to pharmacy chains/maybe choose a partner for the incontinence field (a la Medico)
DE: Make more marketing (publicity, magazines)/make structured campaigns with new products.
SE: Not possible
PL: Wants to make closer customer bonding/increase awareness of Abena/focus on customer needs + demands.
UK: Focus on “key persons” in important roles. Meet with the right people/get to know them.
DK: With a market share of 50 % we look for loopholes in e.g. the retail market (Matas etc.)

Exports: More customers in the same countries. More aggressive customer policy to increase sales. Selling of
vacant capacity to large customers (wholesalers) like Artsana, Indas, Santex, GVS, IGEFA, Sanacoop. But not
to customers who may have a significance marketwise for the Abena Group as a hole (such as Tzmo, Paperpak,
Medeco) without it being closely considered/discussed. The advantage is of course that they help to “pay” the
Pull-up machine because the capacity is used to the full.
Product strategy
Today we have 3 lines in our incontinence range:
   • Premium (Abri-xxxx Air Plus)
   • Comfort (Abri-xxxx)
   • Regular (Delta)

These 3 lines distinguish themselves on the quality – Premium and Comfort have the same quality level but are
different with regard to the back side foil (breathable/non-breathable). Today we use the 3 lines actively in all
our subsidiary countries but only the Abri – products are actively promoted. The purpose of the Delta products
is to be the price competitive product where competition is on price and not quality.
In terms of price, the differences between the 3 lines are not as big as it should be. With regard to the Delta
products the cost price is still to high to call for certain tenders (against e.g. Tyco, Paperpak, Medeco (Ontex),
Hartmann Classic).
The quality levels for the products are high and the question is whether our quality level of Delta is not higher
than it should be. Based on this it was discussed whether our Delta range should be downgraded even more and
also, whether we should cease the Comfort range and in the future only have 2 lines in the incontinence range.

The above-mentioned considerations should be viewed in the light of the market development which is taken
place with regard to breathable foil products. From Abena’s point of view we estimate that within a 2-year
period, the breathable foil on the products will be something all suppliers are able to offer and what is more,
the market will demand. In relation to our range, this means that 2 of our lines will not be so attractive anymore
because they are made of ordinary PE foil. It was discussed, whether Delta should continue as our cheap
product (combined with a downgrading) or whether we should slowly downgrade the Comfort line (Abri w. PE
foil) to the Delta level.

Conclusion
In order to make a decision on this, Abena will examine the possibilities and prepare a suggestion whereby
Abena works toward having 2 lines in the course of a 2-year period.
In the meantime, all have to fight towards using the Premium products as much as possible, because we are one
of the few suppliers who can offer a complete range of breathable products. It is only a question of time before
our competitors offer the same range of breathable products.

Wishes for future incontinence lines:

Product line                         Premium                              Regular
Quality                              High                                 Low
Type of foil                         Breathable                           Non-breathable
Name                                 Abri-xxxx Air Plus                   Delta-xxxx       or    Abri-xxxx
                                                                          (classic?)
Price level                          High quality = high price            Low quality = low price
                                                                          (tender product)
Service level for the product        High                                 Moderate
Marketing of the product             High                                 Moderate
Depth of product                     Full                                 Adjusted
Product types                        Abri-San                             Abri-San
                                     Abri-Form                            Abri-Form
                                     Abri-Flex
                                     Abri-Wing
                                     Abri-Man


New products in 2007
Abri-wing will be relaunched in 2007 in the form of a new belt-product. The old Abri-Wing product will be
out-phased and a new product similar to the Tena-Flex product will be launched. For the time being, we have
decided to introduce a medium and a large product – in 3 absorption sizes. Additionally, we will introduce an
Abri-Wing Special product (from Japan) which comes with a special extra tape and has a very high finish.
With regard to prices we are currently negotiating with different producers, so it is yet too early to comment on
the price levels of the products.

In 2007, we will work on developing a special defecation product. Demands for such a product are high and
currently, no-one else provides this product. It will be a particularly thin product, which price-wise will be low
because of a high changing frequency.

Image
We must admit that our name and profiling of name(s) is not satisfying. We are not known very well on the
European market and this we must change. Today, we have “Abena” as our company name and our product
name is “Abri-“.

Conclusion:
It was decided that we should use our “Abena” more actively. This means, that we must make visible the
Abena name. With regard to our products the name should be printed on them – to make Abena more visible
and to connect Abena to the product name (which Hartmann is already doing on their products).

This applies to Finess products and Frantex products as well – these must be connected to the Abena name.

The oval logo is still seen on certain products/packing – we urge you to remove it so we have a uniform line in
the use of the Abena name (e.g. Abena-Frantex – Abri-Soft cartons).

Marketing
During the last couple of years we have gained control of our range of brochures and the profiling we wish to
have by this media. We are still working on a proper image brochure – it is under way (LNE).
We have the impression that our marketing know-how and the marketing support from Abena is not always
used to the extent it is intended, and that our sales representatives not always get to the point of telling the
story of Abena. From now on, Abena will focus on these aspects and we will prepare “ready-made” campaigns
which should be used. In these ready-made campaigns, the target group and instructions for the sales
representatives will be specified (the packing of the kit, the use of arguments, sales gimmicks etc.)

Conclusion:
All subsidiaries should actively use the sample kits on the market this coming year (on Abri-Flex, Abri-Man
and the Finess products). The subsidiaries must include all items in their stock – if certain articles are not sold
after 6 months, they can be returned to DK. In the beginning of the new year, every subsidiary will be informed
about sample kits etc.

In order to improve the implementation of our campaigns/launchings, Abena will send out an overview by the
end of December to all our subsidiaries (JLB/LNE/PTN).

Tender sales
Abena DK wish to get more involved in tender sales because of vacant capacity in DK and because it wants to
set up an aggressive price policy. When we get tenders, it is very important that we decide the right strategy for
which products to use and that the products match the products which the competitors offer in the same tender.
We often find that we offer Premium or Comfort products in a Tender where we are up against products of
Delta quality. If we do not offer the right products we have already fixed a high price level in advance and we
are left out of consideration.

Reminders
In order to optimize stock logistics and minimize operation costs of the stock, the subsidiaries should order
entire pallets at a time, whenever possible.

A help to optimize stock logistics would be if you unite your “small quantity” orders to only 1 or 2 trailers a
week (instead of in all trailers). It places great strain on the stocking department if every trailer has to carry
“small quantity” orders (1-5 cartons). Furthermore, it reduces the service level and adds to the operation costs.

People have expressed a request for invoices to be sent by PDF instead of in envelopes. It would save expenses
and the subsidiaries would receive the invoices straight away. All of you, please report back whether it would
be feasible for you (deadline 20/12) (JLB)
Price rise on euro pallets by 01/01/07 to 55 DKK per piece. The rise is due to price rises on wood.

Reporting to Frango lag behind. It is not satisfactory not to be able to report before the 20th each month. We
urge you to take this seriously. We inform you that we have hired a successor to Anders Andreasen in Abena
Holding. The new person will begin in the new year.

Next meeting
Polen – (Stettin/Goleniow). JLB/AMB will give you practical information
Time: 22/5 (19.00) to 24/5 (14.00)

07122006
JLB

				
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