110 Years Van Hessen

guts and gloryat

Van Hessen

y e a r s o f

gut feelinga future in tradition

jan daan hillen

Van Hessen

110 years

tradition

Vision

loVe

expertise

passion

know-How

researcH

dedication

sense of responsibility

24/7

gut feeling

continuity

community

sense of purpose

spirit

quality

sustainability

dream

success

loyalty

conViction

tenacity

integrity

autHenticity

focus

young

professionalism

family

casings

superiority

bonding

top position

talent

creatiVity

enterprise

élan

decisiVeness

appeal

world leader

independence

daring

waywardness

self-confidence

no barriers

pragmatism

teamwork

respect

reputation

emotion

| de toekomst is van ons naam en achternam03| 110 jaar van hessen

:a good reputation opens

doors, to the benefit of

everyone

gut feeling. a future in tradition | 110 years of guts and glory at Van Hessen

02 | contents003| 110 years of guts and glory at van hessen

Contents ContinuitY!Elliot Simon | CEO of the Van Hessen Groep

TIMELESS VALUESJan Daan Hillen

On SuStainability, trade and COmplexity

STRIVING FOR SUSTAINABILITYJohan Lokhorst | Chairman of the Supervisory Board

of the Van Hessen Group

STRONG ON TRADEPeter Arentsen | trade expert

MANAGING COMPLEXITYRonald Lotgerink | CEO of Zwanenberg BV

CHinese PiGs As HouseMAtes

On traditiOn, SenSe Of purpOSe, Quality and dreamS

TRADITION IS A KEYWORDJohanna Fink-Gremmels | Professor in Veterinary Medicine

at Utrecht University

006

008

part 1

014

020

028

034

part 2

078

086

096

108

118

part 3

160

168

180

002 | gut feeling. a future in tradition

CoMMunitY, sense oF PurPose, And sPiritTex Gunning | member of the Board of Management of Akzo Nobel Nederland BV

QuAlitY CoMes FirstElliot Simon and Jan Willem Vreeburg | CEO and CFO respectively of the

Van Hessen Group

our dreAM: one CertiFiCAte For All CAsinGsJeroen Teijsen | director of CTH BV (Combinatie Teijsen Van den Hengel)

sCottisH sHeeP, soMeWHere in tHe Hills

On traineeS and trendS

trAinees Are tHe FutureVan Hessen team members Harma Eilander (responsible for product

quality in Europe) and Alexander van Hessen (engaged on business

development in the Middle East)

2027: VAn Hessen PHArMACeutiCAls ls, istAnBulFarid Tabarki | Zeitgeist researcher

Credits:formerly, i did everything

well because i didn't want

to fail. later i did every-

thing well because i wanted

to be the best

:the difference between ego

and pride is that ego costs

money and pride doesn't

| elliot simon : ContinUitY!| 110 Years of GUts and GlorY at Van Hessen| GUt feelinG. a fUtUre in tradition 007006

A hundred and ten! Not many people grow that old and few companies attain this respectable age. You've got to embed the success factors in the company if you want to survive that long. You must remain faithful to your convic-tions and persevere, but also be able to adapt to changing circumstances. A company requires loyalty, a willingness to join forces in working to achieve the best results. Teamwork, in other words. There must also be quality in all aspects of the company so as to guarantee continuity. These essential factors for success are still with us thanks to the transfer of values and culture by our predecessors.Those who conduct business with common sense, passion, dedication and integrity can endure economically less favour-able times. And those who are capable of looking ahead and preparing themselves for anything that might confront them have a higher purpose in mind, namely continuity. It is this higher purpose that we aspire to. We incorporate the long term in how we run the business, as this optimizes the prospects of Van Hessen still being successful in a further 110 years' time. One of our favourite clichés is 'act short term, think long term'. We are looking at the present, with a sideways glance at the future and with immense respect for our past. That is what this book is about.

The future is uncertain, but it's part of our responsibil-ity to treat each other and the resources at our disposal with intelligence, concern and respect, so that succeed-ing generations at Van Hessen have a future. We therefore consider it our honourable duty to further strengthen our

values and pass them on. It is our opinion that Gut Feeling, the sequel to Guts & Glory, is a means towards achieving this. An eminently readable book, its narratives are about how we got here, the current state of play and, most importantly, the prospects for tomorrow, as seen through the eyes of young members of staff, their senior colleagues and professionals from inside and outside the company.

A sequel to our Guts & Glory was a must, according to Adriaan van Eeghen, our previous CEO. However, it would be a challenge making one, he casually added. I can confirm this now also out of experience.I would like to thank all of those who have contributed to this book.

On behalf of the board of directors,

Elliot Simon,Chief Executive OfficerOctober 2012

ContinuitY!

| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen | jan daan hillen : timeless values008 009

tiMeless VAlues

On celebrating its first 100 years in 2002, Van Hessen published a small book mainly devoted to the history of this renowned casing company and including magnificent photographs taken on its premises by Paul Huf half a century earlier.In 2012 the company has an additional ten years' history and many of its developments are worthy of description, but it struck us as more appealing to write this time about the company's future – a longer period than that of its past and clearly with a great many more changes than in those 110 years.Usually the directors limit themselves to a period of five years at the most when deciding on policy and setting out goals. (CEO Elliot Simon describes looking any further ahead than 2017 as 'pretty pointless; it's difficult enough getting to grips with next year'.) All the same, discussing the possible consequences in the slightly longer term – say fifteen years, to keep things realistic – of the growth in both population and prosperity in rising economies for the food industry in general, and the casing trade in particular, can make interest-ing reading. What will be the impact of political and social developments in Europe? And what can we expect from the changing zeitgeist and the arrival of new generations?

Words: interviews and clichésZeitgeist researchers are unfazed by such issues; this is their territory, after all. But most people, including those interviewed in this book, say they don't have a crystal ball, by which they mean that they would never attempt serious

predictions – reality tends to severely limit the best-by date of such forecasts. Yet those who worked on this book have together assembled a comprehensive picture of the world in and around Van Hessen, now and in the future. The accounts given by colleagues and directors, a non-executive director, a professor in Veterinary Medicine, a leader of a modern multinational, a friendly competitor and a buyer are evidence, either explicit or implicit, of the importance all attach to authenticity. Timeless values such as a respect for nature, the typical company culture, honest business practices and other traditions are worth guarding and preserving, considering that Van Hessen can use these values to stand out from the pack even more in the future than it has done for the past 110 years. It may sound contra-dictory, but Van Hessen has always targeted the future and at the same time upheld tradition. This seeming paradox has provided the subtitle of this book.Lex van Hessen and Adriaan van Eeghen passed on the baton and withdrew into the background. In this book about the future they are spoken of with endless respect, however have nothing to say themselves. When I visited Lex to collect some information, he once again treated me to a crash course in The International Family Firm, conveying his knowledge and experience in so many nuggets of wisdom and one-liners. He believes in clichés. 'Clichés are truth.' His famous sayings are reproduced throughout the book away from the main text. They are part of the future of Van Hessen BV.

:being honest and straight-

forward makes it all easier,

since there's never any need

for correction

| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen | jan daan hillen : timeless values011010

images: from the company and from the middle of nowhereFor Gut Feeling I engaged in conversations and made note of stories that were worth repeating, but a stack of paper full of words doesn't add up to an attractive anniver-sary volume. There had to be illustrations. In the previous book, the contrast between the up-to-date text and the old photographs added a delicate tension. In Gut Feeling we try to conjure this up with text relating to the future and photo essays illustrating the traditional herding of sheep and pigs. These ancient professions are gradually disappearing, driven herd-like into a corner by industrialization, scaling-up and other trappings of the modern age.The small world of the pigherd or shepherd and the ultramodern, globally operating, technologically advanced casings company that is Van Hessen would seem to have little in common, yet they are bound together by respect for the livestock and an unconditional dedication to the profession – Lex would call it love. The Dutch photographer Michel Szulc Krzyzanowski was commissioned to capture the daily life of traditional pigherds and shepherds. This was easier said than done, since where are these to be found? For pigs you have to go to China and for sheep the place to be is Scotland. After doing the necessary research Michel flew to Beijing, followed by a further three days' travel to reach his goal: the mountain village of Lao Zhai, which cars cannot reach and where he was the first foreigner the villagers had ever seen.For the shots of sheep he flew to Glasgow and then on in

a little old plane to Stornoway, the airfield of Lewis in the Outer Hebrides, the chain of islands northwest of Scotland. He then travelled by car to his destination: Aird a' Mhulaidh (Ardvourlie) on Harris in the south.

no future without a pastText and photo essays in Gut Feeling, imaginatively designed by Kaire Guthan, together set the scene for Van Hessen's 110th anniversary. There's no future without a past. Pairs of photographs, each contrasting one taken by Paul Huf in 1957 with a recent shot of a comparable subject, are a way of acknowledging that past.

I have worked on this second anniversary book for Van Hessen with as much pleasure and interest as on the first. And once again it was most instructive!

Jan Daan HillenOctober 2012

:setting up a trainee

programme is the best thing

i've ever done. and the

worst thing is that i didn't

do it five years earlier

PArt 1

on sustAinABilitY, trAde And CoMPlexitY

:people are our prime concern,

but we're not a charity

| gut feeling. A future in trAdition 015| 110 Years of Guts and GlorY at Van Hessen014

striVinG For sustAinABilitY

Johan Lokhorst is a farmer from the Betuwe area in Gelderland who invests in food companies. In 1976 while still studying at Wageningen University he took over his father's arable farm. He held onto it when he went to work at Unilever in 1980, after which he rose to the Board of Management of Friesland Coberco Dairy Foods. He was after greater independence as a businessman so in 2000 he bought the Peijnenburg cake factory.Van Hessen had always fascinated him and for years the family had tried in vain to collar him for a post in the company. It took them until 2001, when he became Chairman of the Supervisory Board. He describes his involvement in the daily affairs of this company.

In 1999 the company merged with two other family firms and the Hespri Holding group was born. This inevitably meant setting up a Supervisory Board. Although I suspected that

:do something well or

don't do it at all

| johan lokhorst : striving for sustainability

the management regarded the Board more as an obligation than as an asset, I responded positively when I was asked to become its chairman.That the scepticism was unfounded and the Supervisory Board proved a welcome addition was mainly due to its balanced makeup. The enterprising banker Joost Kuiper is a childhood friend of Lex; Adriaan van Eeghen played a

significant part and we managed to land Roland van den Berg – he knew China well, having once been ambassador

in Beijing. I was the only out-and-out businessman of the Supervisory Board.The value of a Supervisory Board proved to lie principally in our efforts to achieve strategic focus and structure in the business. We stimulated to make the family company more professional. One of the first things we did was appoint Adriaan as CEO. He and Lex were a unique combination. He had a stabilizing effect, and still does.It was an interesting time, but the parties that merged have gradually been going their own way again.

focus and structureOur contribution during the last thirteen years was to provide focus. What does Van Hessen do well? What is its business? Casings! So make sure you get even better at it. Activities such as trade in calves' stomachs, bull's heads and pet food are only distractions. The tremendous advance in profitability is largely due to our being superior in the casing business. Casings are the source and the core.There was no successor in the family and Lex wanted to sell the business, but it had to end up in the right hands. Its strength would irrevocably decrease if it were to be

taken up in a large strategic enterprise. Van Hessen's own culture is the foundation of its success – this is something that needs guarding. I can't guarantee that Van Hessen will never be taken over, but our standpoint in the past period was that the business is better off when the management holds most of the shares. Lex sold his majority interest to the board of directors and to a new outsider, Janivo, an invest-ment company belonging to the De Pont family. It invests its capital with restraint, professionalism and success. Its long-term perspective is a perfect match for that of Van Hessen.Adriaan passed on the reins to Elliot as CEO and Jan Willem as CFO; Lex and Adriaan now had the room to deploy their own special capacities to the full. Lex had to find a new equilibrium after having worked for the company day and night, year in year out. That brilliant factory in China is his baby.Following in the footsteps of the top management, the directors in Chicago, China and Australia were given the opportunity to become shareholders. They had to make some formidable investments. The bond felt by people who have advanced from employer to entrepreneur has a positive effect. This way we incorporate high potentials in the business and are working inclusively towards a strong top and middle management.The Supervisory Board meets five times a year or so and then there are the increasingly frequent strategic sessions. Once a year we visit a foreign branch to see what's going on there and sit down and discuss things with the management. As chairman I'm available once every three weeks to field Elliot's questions. He asks my advice when necessary and is perfect to work with in the company's cooperation with the Supervisory Board. Elliot is the epitome of the modern CEO, and is open to innovative ideas. For example, he has had the entire top management enrol at the IMD business school

CoMPlexitY oPens uP oPPortunities to distinGuisH YourselF

016 017| gut feeling. A future in trAdition | de toekomst is vAn ons nAAm en AchternAm| 110 YeArs of guts And glorY At vAn hessen

in Lausanne – he's been there himself – to professionalize further one step at a time. For those who have followed this course, the sky's the limit!

Sustainability through partnershipsAs the Supervisory Board we have brought a steady increase in focus. Van Hessen is very good in providing products of a consistent, high quality. The customer is never disappointed. This is because we make the right purchase and because of

what they do in Shanghai, which is select casings on quality and calibre. It's not just that we must serve the

customer to the best of our ability, we should do it better every year. This puts you ahead of the competition. That's where we're coming from.A key question in this respect is how to come by your raw material in this exceptional market. We want to enter into long-term contracts with slaughterhouses so that we can clean our casings there – shop in shop. Whether we can depends a lot on how the market develops. Slaughter-houses are more likely to bite when the prices are low than when they're high – then they're more cautious and want to negotiate a new contract every three months. We strive for sustainability in our business relationships. That's a strategic aim for us, but the market is nowhere near ready for it everywhere. You have to be close to the raw material to be able to raise the quality in the long term. In Oceania, the Middle East, the UK and China for sheep, in China, the USA and Europe for pigs. So it's in these parts of the world that we seek to take up front-line positions. We think this can be done by establishing working relationships with local

sausage casing companies. We managed it in the Czech Republic, where it gave us a springboard to the regions round about.The company is growing and getting more complex through the constant challenge of adopting strategic positions. Which part of the world should we go for? Should we move in now or wait for a bit? Are we too late?

top talentIf you want to improve your position on raw material you need first-class management. It has to be better than that of your competitors. We believe in Van Hessen's trainee programme. Bright young talents from the Netherlands, China, USA and Australia are all over the world giving guidance to local enterprises for four years or so. This element in the strategy is relatively new and will require professionalizing further. Originally, Lex and Elliot took it on, on Friday afternoons. Now we employ someone to oversee the trainee programme.We are looking for people from food technology as well as business administrators and economists. People able to make decisions, who are creative, persuasive and enterpris-ing. We on the Supervisory Board are allowed more and more of a look-in at the business of assessing and selecting upcoming top talent. It's a real job picking out the good people.Van Hessen is an attractive international employer. It's one of the most successful Dutch companies in China. All young graduates want to see the world. Van Hessen has a lot to offer in this respect and whoever excels can take part; we have a stash of shares set aside for future top management. The corporate ethos is bound to change gradually with the arrival of professionals from other parts of the world. The trick is to retain the basic thinking behind it at a more professional level. That's the way we see it.

We BelieVe in our ProduCt And Would rAtHer HAVe AdditionAl stoCkPiles tHAn extrA CAsH in tHe BAnk

:in the first half of my

working life i badgered

everyone to distraction

with one word: why? in the

second half i learned to

use the word no

018 019| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen | johan lokhorst : striving for sustainability

ComplexityThe markets for sheep and hog casings are quite separate. Tightness in the sheep market bears no relation to the looseness in the hog market. The beautiful, unique and complex thing is that every casing is different, because every animal is different. A dry summer in New Zealand produces casings unlike those produced by a wet summer. This makes supplying consistent quality an interesting challenge, for everyone. Just this complexity opens up opportunities to distinguish yourself.Europe is our home market. Our strategy takes account of a possible division into Northern and Southern Europe, although we hope it won't happen. Besides strengthening our European position, we want to expand in other regions. There are opportunities in South America. We expect to enter into important partnerships in Brazil thanks to the increased scale of the meat industry in that country.Half of all the world's pigs are slaughtered in China! Which is where we shall be playing a key role locally in the coming

years. We are definitely in favour of working with Chinese enterprises; one priority is to integrate Chinese

casing culture. This is easier in theory than in practice, even with our decades of experience in China. You have to make your firm attractive to a potential Chinese partner.

politicsWe have got stronger operationally, also in external communications. We are increasingly involving the authori-ties in our business, although the arguments put forward by politicians are hard to follow at times. Theirs is a difficult and unpredictable world. We're all for free trade, but unfortu-

nately there are more and more political games being played. Substantively we are one step ahead of most politicians, partly because of our scientific consultants. Our situation in that respect as well has improved many times over compared to ten years ago. Luckily we enjoy excellent relations with the Dutch authorities, our ambassador in China and institutions representing the Netherlands over there. These people are well aware of our interests and of those of the Netherlands, and work with us positively.

Onwards and upwardsTo talk about the company's future is to talk about continuity. You can safeguard this by adopting the right strategy and this is partly the responsibility of the Supervisory Board. Our opinion is that for the time being the business can work best from its current position of independence. You mustn't judge Van Hessen on the strength of one moment in time but in the long term. The worldwide growth in the need for animal proteins is grist to our mill, as is the rise in prosperity in Asia and Latin America – this comes naturally when there's an increase in what is consumed.The company has become more professional but the culture hasn't changed. Van Hessen is performing well. Elliot is young and can go on for years, but it shouldn't depend on him alone. There has to be a broader front alongside Elliot and Jan Willem, while we continue to safeguard the typical Lex culture. If we succeed in retaining and safeguarding the success factors, we can maintain our position as the world's premier company in the casing sector.For this we will still be making grateful use of Lex's knowledge, energy, experience and reputation. We like to see him as a company ambassador. Will he be on the Supervisory Board in 2025? No chance, as he hates meetings. In 2025 he'll be walking with Elliot through the factory in China giving valuable advice.

We Must Continue sAFeGuArdinG tHe tYPiCAl lex Culture

:in a commercial organiza-

tion such as ours, everyone

should be aware that they are

each contributing to every-

one's payday at the end of

the month

020 | gut feeling. A future in trAdition 021| 110 Years of Guts and GlorY at Van Hessen

Peter Arentsen first met Lex van Hessen in 1976 on the soccer field of HVV in The Hague. At the corner flag. It was a painful encounter; they connected with each other's shins instead of with the ball. Peter limped off to the changing room, Lex pressed on with the match. When it was over they struck up a conversation. One year later Peter was working for Van Hessen. He takes up the story from there.

In those days it was customary after graduating to fill your backpack and head off into the world. Help the French pick grapes or something. Lex asked me why I didn't go to Australia. I was lost for an answer. A few weeks later I was working in the casings department of a slaughterhouse in the Sydney area, care of Universal Casings, a firm Lex did business with. I had to emigrate to get into the country. I didn't know a thing about Australia and was surprised not to see kangaroos hopping across the runway.

stronG on trAde

:stick to your plan (and

only change it if it's a

real improvement)

| peter arentsen : strong on trade

So there I was, utterly alone. There was no Internet in those days. I obtained my lorry driving license, and eventu-ally ended up working in the office. After five years I'd had enough. I wanted to get back to the Netherlands, but they didn't really know what to do with me over here; it was still a small company. Well, there was always work at the factory in Rotterdam. It was a step backwards but I was more than pleased to be home again. Two years passed and I was asked whether I'd like to set up a new factory in Australia. In Wagga Wagga, the country's biggest village – 50,000 inhabitants and at least as many sheep, located between Sydney and Melbourne, in the vicinity of the capital city Canberra. Two years later that factory was up and running and I returned to the Nether-lands. It was the same old story: what could they let me do now?

a knowledge of languagesA colleague at Van Hessen suggested that I join the sales department. Lex was sceptical. Peter? He's from production! It won't work.My father had worked for NATO. This meant moving house every three years, within Europe. Which wasn't always fun, but I did learn to speak fluent French, German and English.

Anyway, Lex was willing to give it a try. I was given a list of products and prices and a phone. It was April, just before the French

sausage-making season. It worked like a dream. I proved to be more of a commercial man than a producer, but my past in production came in handy. I sold a whole string of stuff, was given a car, went travelling and learnt a lot along the

way. It had been a shot in the dark, but that shot had hit the bull's-eye. I made my way up in the organization, moved into trade, added hog and beef casings to my repertoire.At the end of the day my speciality became promoting and selling casings – in particular products that are difficult to sell but which at year's end determine whether the company has made a profit or a loss.

patience and trustThere are some small butchers in Italy that make sausage while you wait. If you ask for a kilo, they take the meat out of the fridge and grind it there and then. You can't keep it for more than two days but it really is fresh. Thing is, such small-scale butchers can use short lengths of casings, one or two metres long. We call these 'shorts'. If the price of raw material goes up, these short casings can work well for us. If it goes down they are more difficult to get rid of. Then butchers can sell longer casings and we're left with the shorts. It's my job to sell these. There's no question of throwing them away, since well- processed casings are non perishable. Ten years is nothing. You can keep dried casings for an eternity, not that I know how long an eternity is. There are lengths of casings and bladder from Ancient Egypt that are still usable today. So we store them patiently until better times present themselves. Sometimes they are even more valuable then. There is no small measure of capital in our stockpile. Experience has shown that it's even possible to have too few shorts! The thing is to keep calm and have faith in the future.

a comfortable law unto itselfVan Hessen isn't big enough to control or guide the price index. (Indeed, I've learned that it's impossible to have control of anything in one's life – I've abandoned that notion, fortunately.) Our financial turnover is too modest in global

sAusAGe WitH less tHAn 20% FAt doesn't tAste oF AnYtHinG

022 023| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen

terms to have any immediate influence, but I suspect that others are keeping an eye on us and want to know what we're up to. Not that we let ourselves be influenced by what others do. This is an oasis of calm within the company. After 110 years you know what your potentials are, you've been able to develop a fine focus and you follow your own path, even if others suggest you're nuts. A law unto ourselves – yes indeed. At the same time we are our own biggest competitor. We learn from others where we've screwed up and we make the most of these lessons. This company gives you the leeway to make mistakes. You can feel safe and build up self-confidence.The management doesn't keep its thoughts on this policy within the boardroom but regularly reminds everyone of it. In the New Year's Address of course, and in a sort of ongoing refresher course. This is worthwhile as it clarifies things, making it easier for everyone to function. Everybody feels comfortable, knows which way to proceed, and feels free to ask questions and pass comment.In the photos of our trip to London on the occasion of our 110 year anniversary, you can see that everyone hangs out with everyone else. There are no groups or cliques.

We have the one team. On Schuttevaerweg in Rotterdam, where it all began, a clear distinction was made between

office and factory. Them upstairs, us downstairs. That's all in the past. There are no barriers here. In our current premises, everyone lunches in the canteen, upstairs. And office people from 'upstairs' visit the 'downstairs' every day. They've all worked in the factory. No one in the office pulls a face if

someone from the production department comes in bringing with them that distinctive smell of natural casings.

room to decelerateYou can be young at Van Hessen, and do things you enjoy doing. That's a compliment for the company. There's no need to feel uptight round here. Even I've reached a certain stage of relaxation. Johan Cruijff put it nicely: You only see something when you've seen it yourself. We try to alert our people to the fact that they shouldn't let their lives be lived for them but that they should do the living themselves. It's only when you've found an inner equilibrium that you know who you are and what you're worth. At Van Hessen you're guaranteed to discover what your contribution can be. Your colleagues confront you with it and then it's up to you where you want to take it. We are very plain-thinking, clear and honest. No one is afraid of offending a colleague. There's no politics, no lobby, no double agenda. This is worth a great deal. Want to join in? Then you get the opportunity to learn as you go along. You can evolve gradually in the company and in your position within it. There's no need to conform, you can do your own thing. Every department has its maverick types. People who originally seemed to be misfits have proved to possess great drive. And anyone who can't flourish in such a culture, calls it quits. Those who lack passion leave the field. Those who fail to satisfy the criteria have no hope as a trainee and then it's soon over. Ultimately this method of working is advantageous for both parties.It's because of this open attitude that the people who work here are even-tempered and level-headed. They feel committed and passionate about what they do, and intend on staying. They regularly get asked: 'Do you realize what you've got yourself into?' and 'Why are you doing this?' Giving an answer can be tricky at times. Lex brought me to my senses by asking me 'Why exactly are you doing what

You CAn keeP dried CAsinGs For An eternitY, not tHAt i knoW HoW lonG An eternitY is

| peter arentsen : strong on trade

you do?' I couldn't give him a decent answer at the time. I started reading books. Not that the answer was waiting

for me there of course, but I did get to learn more about the unconscious. You may think that you'd thought about what you were going to do but unconsciously you'd decided long before. Perhaps even at night, in your sleep.At Van Hessen we learn never to make a decision under pressure and never to regret a decision. It's people who can be consciously engaged on this level that we are looking for.Van Hessen is professionalizing. You'll see that in the type of worker we'll have in the future. People with my background and training won't be working here anymore. This may sound negative, but I mean it in a positive sense. The company is becoming more professional, more bureaucratic, more rigorous. It's important that everyone keeps on generating creative ideas, asking questions and communicating openly.

growth opportunitiesI see the future of my speciality in a positive light. There will always be fluctuations and moves on the market. Our turnover is not even 10% of the world market. According

to the iceberg principle, by far the greatest part is invisible. We have a heck of a lot still to do.My expectation

is that we will continue growing, partly through takeovers. Maybe we'll extend our production to other countries. We have the know-how and the technology, so we're okay in that

respect. Our opportunities for growth are largely dependent on having efficient workers. And we'd have to recruit these ourselves in the new countries, as we did in China.Brazil is at present undergoing a massive increase in scale. Small companies are unable to compete. Sausage is big among Brazilian consumers so there is a niche for natural casings. Raw material is plentiful in Brazil, shipped there in vast quantities from Europe and China. The economy is flourishing and prosperity is increasing, but life is also getting more expensive. Natural casings will become more expensive too. The cost of raw material is going to figure more prominently and it remains to be seen whether the market can meet a higher price.I don't think we should set up a branch in Brazil. The factories there are each as big as ten German companies combined. Perhaps we can keep a supply there to deliver at a moment's notice, but to enter the market to supply Brazilian butchers? I don't see that happening.I have a better feeling about Africa. South America and Africa are the work sheds of the future. Africa's eating more sausage too. We see companies from South Africa moving to Central Africa and opening supermarkets. Production will get under way there and the future meat product factories

You don't need to ConForM, You CAn do Your oWn tHinG

AFter 110 YeArs You FolloW Your oWn PAtH, eVen iF otHers suGGest You're nuts. A lAW unto ourselVes? Yes indeed

:we have lots of passion but

no emotion. emotion costs

money, passion doesn't


will need casings. True, there are many Muslims and they don't eat pork but they do eat poultry and beef. We first have to see how the consumer pattern develops before taking further concrete measures.

Worldwide developmentsIn China it's the government that decides how much pork gets onto the market. If they call a halt, we can't sell any by-products – we also deal in trotters, ears, snouts and

suchlike. Vietnam has the opportuni-ties, but there's no big growth market. India? That country is so incredibly poor. It's a delicacy for them even to eat chicken.In South Africa they're growing

more and more sugarcane for biofuel. Pig farmers are going bankrupt because they can no longer feed their livestock – maize has become too expensive – and have to comply with all kinds of safety measures. Food safety is important. Many Chinese are afraid to eat in restaurants these days because they don't know what it is they're eating; their faith has been shaken. Our own eating habits are changing too. People in the West generally are eating less meat and want less fat. That said, sausage is a fatty product by definition. In Scandi-navia they once tried making frankfurters lite, just 12% fat. The franks were lean but they had no flavour. Sausage with less than 20% fat doesn't taste of anything.It will be interesting to see how all these factors pan out.

no one At tHe oFFiCe Pulls A FACe iF soMeone FroM tHe ProduCtion dePArtMent CoMes in BrinGinG WitH tHeM tHAt distinCtiVe sMell oF nAturAl CAsinGs

:we're not playing in the

premier division but in the

champions league. everything

we do can and must be im-

proved upon. we want to be

the best and stay the best

:our company can continue

to grow by extending the

production capacity (to

new locations)


MAnAGinG CoMPlexitY

Ronald Lotgerink didn't become a butcher like his grandfather but a registered accountant. At age 28 he took on the post of financial director of Zwanenberg meat products plant – a firm like this was more fun than a consultant's office. These days he is responsible for the company as a whole. He doesn't need to work that hard but he does so all the same. And with pleasure. Every day his briefcase not only goes home with him but also gets opened, its contents keeping him busy until late at night. Ronald likes to philosophize, say about being positioned in ever more complex market conditions, and he has his own ideas about how protein will be provided in the future.

We have factories in the UK and in the US. We've just started a joint venture in Australia. We still have eight factories in the Netherlands. All the time we are looking to take over companies that go well with us and then make them super efficient. This means integrating the good components and rejecting the lesser ones. We've been doing

:we attract people to fill

positions. we don't create

positions for the people who

are there

| ronald lotgerink : managing complexity

this since I arrived here 23 years ago. During that time we've taken over more than forty firms.

On the lookout for unique positionsIn earlier years Zwanenberg specialized in fresh meat, but around the turn of the century we had to choose: were we to stick to this basic industry or devote ourselves instead to

value? Whoever wants to stay in meat has to work at the European scale. This means investing. A family firm like

Zwanenberg has limitations to financing and we found the profits too meagre. We decided to continue growing in value and to abandon fresh meat. We took over the likes of Cebeco, Boekos and Offerman. Takeovers are contingent on the holy trinity of brand, position and concept. If one of these isn't unique, the chances of success are too small. Then the takeover means more of the same and we're not interested in that.The added value is to be found in a number of product categories. We sell canned meats, cooked ham and luncheon meat worldwide under the brands Zwan and Plumrose. Then we have sausage products, with Huls as the principal brand. Fresh products are the third arm, which can be divided into cut meat for the retail market and chunk products under the Kip's brand. There aren't many manufac-turers in the Netherlands that sell branded products; for us it's part of the strategy. We are looking worldwide for unique positions. We want to be modern, innovative, workmanlike. And if we manage to pair off these aspirations with position, concept and brand – in a kind of marriage – and make this

known to customers and consumers, then we will have succeeded.

focus or obsession?The best way to guarantee your unique quality is an efficient workforce. Devotion and motivation make a difference. You can have the most marvellous systems and products, but it won't mean a thing without good people working for you.We founded the Zwanenberg Academy to recruit young academics, vocational university graduates and skilled professionals. We try to hold people's interests with special attention, supervision and training. Sometimes it works, sometimes it doesn't. Same with Van Hessen. As a graduate in economics you have some explaining to do to your friends if you take up casings. But once the bug bites you, it has you in its grip – this is no different in the casing and meat industry. This probably comes from the low profit margins. You have to be incredibly focused on what you're doing. If you like what you're doing, the concentration comes of its own accord. Actually, it's an obsession. You have to be able to fight. Meat and casings are precious raw materials and every mistake made within our small margins is a costly one. You have to be right on top of the business.

brands across the worldWe operate against the backdrop of current developments in Europe. I expect the crisis to get worse and that recovery will be a slow process. Sales are moderate, the accent being on high-grade products that don't cost much. Europe today resembles the back garden of a neglected mansion: there's not a lot left growing. The margins are coming under further pressure and there is little innovation to speak of. Europe is an antique continent. We see most growth in the US, because there the demographic makeup is fundamentally different and naturally targeted at growth.

it's Good tHAt We don't knoW MuCH ABout tHe Future. liFe Would Be BorinG otHerWise


Zwanenberg is a market leader in the Middle East. We are building interesting positions with our brands in countries where the population and the purchasing power are increas-ing. India, Australia and other countries with Anglo-Saxon

legal systems are attractive because of their reliability. We're too small for China, but we're quite busy in the Philippines.Africa is a growth

market. We're heavily present in North Africa, mostly in halal products. Nigeria and the other countries along the Gulf of Guinea are on the rise. These are huge markets and I see opportunities for a decent protein product. We sell a lot of canned stuff there. It's a handy packaging, but more expensive than casings. Gut is a relatively cheap carrier of a high quality. Perhaps we and Van Hessen can go into production together! Van Hessen and Zwanenberg have had a good name in the meat world for a long time. Then it's natural that you do business together. Right now we buy mostly natural casings. Purchasing raw material on a broad international scale is one of Van Hessen's great strengths. They are specialists with an understanding of quality products and have a first-rate quality control.

proteins, water and peaceLegislation is something we're constantly up against. This is different all over the world. Even within Europe the hygiene codes and the regulations for labelling, salinity and the like are different. We're trying to lobby by way of the trade association. Our criticism is that the rules are not uniformly applied throughout Europe. Germany sticks to its own laws. National legislation protects local interests, but should be subordinate to international legislation. Dutch law goes a lot

further than it needs to and than we can live up to, in view of the world population growth. If our industry has to feed all these people, we need to loosen up on the legislation.The way I see it, we're in the autumn of an old cycle. We talk about organic food, but I don't believe in it. You can only feed the world population organically if this shrinks from seven billion to 500 million. In other words, it's impossible. In 2050 – not that far away really – there may be just enough to feed everyone, but fluctuations in food production and responses from population groups will get more intense, also due to the increasing lack of potable water. The effects of specula-tion and climate change can threaten the peaceful division of energy, food and water. I'm not optimistic about seeing these issues quickly resolved. The word from Wageningen University is that we can go a long way in feeding the world by using intensive agriculture to crank up the production. This has already happened in the Netherlands and elsewhere in Europe, but not yet on a global scale. It may well clash with other principles, but it's possible. The issues can be resolved, but there will be increased friction where the big interests are. Oil in the Middle East, raw materials in Africa and Australia, grain in North America, Romania and Ukraine. I predict that in the more distant future we'll be getting our protein from insects, algae-like products and other such sources.

What are brazilian bulls doing?I have these four screens in my office on which I follow the movements in raw material worldwide. We discuss them, maybe ring up our colleagues in the US: 'Hey, we've seen this movement in meat, what's your angle on it?' Stock markets, grain, cheese. What are the bulls in Brazil doing? Discovering patterns and trends is part of my day-to-day work. It's important to manage the mobility of prices. You can temper peaks and troughs if you know where things

We don't need PeoPle WitH tAll ForeHeAds But WitH Wide ForeHeAds

| ronald lotgerink : managing complexity

are heading. You can be one jump ahead by stockpiling and drawing up contracts. It's essential to have the necessary information and to interpret the data.I think such exchanges of ideas are important, not least with suppliers like Van Hessen. How do you view the casing situation? What's your take on wage developments in China? Van Hessen knows a lot more about China than we do. What about animal diseases? This way we try to build up, together with all our business partners, a picture of the world and then make sense of it. I speak with Elliot person-ally once or twice a year. This is most valuable, as such one-to-one contact allows you to probe much deeper than the 'happy hour' chat at trade receptions.

taste trends and programmesDevelopments in demographics and prosperity are generally of great importance, and for us taste preferences are important too. Our development strategy is founded on the three pillars of budget, health and pleasure. Budget is all about a good product for a low price. Population aging and obesity are health factors these days. We are respond-ing to them with product selection and portion packaging. Responsible business conduct and the development of new

products are going to figure more prominently in combating diabetes and cardiovascular diseases, for instance.Some of our brands are dedicated to having fun.

People are living longer and want to enjoy themselves longer but have less money to do it with. We're trying to find a way out of this.Wherever you go, taste is getting a much broader presenta-tion. We have different programmes for different taste trends,

for example targeted at children. We have to make choices, since we can't do everything at once. This only increases the complexity in the company. The increasing fragmentation of markets everywhere is a huge challenge. We must reduce this fragmentation to the scale of the factory, bundling the fragments, managing them, thinking up smart solutions. Managing complexity will be a key aspect in the future. We don't need people with tall foreheads but with wide foreheads: there's so much for them to oversee.

Communicating with the consumerBuilding brands is important if you want to stand out. There are scarcely any brands in the meat and meat product industry. In fact Zwanenberg is the only one to work with them; thanks to our brands we can communicate directly with the consumer – we don't need sales channels. Our uniqueness has given us a privileged position in each segment of the market. In the Netherlands you can't keep a factory running on a bunch of little concepts. We at Zwanen-berg have to have a generic basis too. This determines some 60% of what we do, but generates sufficient cash flow when combined with our own concept.Of crucial importance, besides, is the psychology of colours,

in A FAMilY FirM You CAn Be A Bit WAYWArd

:van hessen will be the last

to turn off the lights, but

not during the next fifteen

years

032 033| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen | ronald lotgerink : managing complexity

forms and trends. Packaging must be effective and inexpen-sive. After carrying out lots of tests and research, we recently decided to change the colours of the packaging of our principal brand. We simply have to stand out. As the only one in the market we now have cheerful colours: it's party time with Kip's, Kip's is cosy. I believe in our brands, even though they're small and we have to invest heavily in them. Luckily, in a family firm you can be a bit wayward...

there's nothing wrong with thinkingWith foodstuffs it's often a question of standard products. However hard you try to make them distinctive, give them a special touch, it's easy to see the similarities. In our business you have to choose between developing an extreme cost focus and engaging in product differentiation and market segmentation. We've thought long and hard about it. It's easy and safe to base your strategy on low costs; you simplify the processes and settle for low margins. This strategy however

is easy to imitate. You're exchange-able with a producer in another country with lower wages. Which is

why we chose the other route and feel better for it.It's appropriate to our company culture to say 'let's take the risk'. Philosophy is a key component of my work. I'm equipped with advanced ways of thinking. No, I don't pace up and down, I do my thinking in my chair – in silence. There's nothing wrong with thinking, but you can always think too much. It must give rise to action. I see this willingness to take risks and the urge to take action – after due considera-tion – at Van Hessen too. This is another thing that explains our good relations.

:the philosophy behind the

takeovers was always a simple

one. everything here revolves

around raw material, produc-

tion, sales and organiza-

tion. in taking over another

company at least one of these

four elements should grow in

harmony with the others

A one-to-one ContACt AlloWs You to ProBe MuCH deePer tHAn tHe 'HAPPY Hour' CHAt At trAde reCePtions

CHinese PiGs As HouseMAtes

:darwin said: 'it's not the

strongest of the species

that survives, nor the most

intelligent. it's the one

that is the most adaptable

to change.'

-

-

-

-

- After the intercontinental flight from

Amsterdam to Beijing, an inland plane journey

to GuiYang and two days being bumped about in a

bus, Michel and his guide Zhang Xiaobei

arrived in Congjiang (South China), where they

set up their base camp. From there it's roughly

an hour's drive followed by many hours' walk to

the village of Lao Zhai – this mountain village

cannot be reached by car. The inhabitants – some

fifty families live there – have had little or

no education and are unaware of the world beyond

their habitat. They've never heard of Europe,

let alone the Netherlands (or Van Hessen, the

casings company). Michel was the first foreigner

to set foot there. As if this were not enough,

the villagers gaped in astonishment at Michel's

height – quite normal by European standards. He

spent several weeks following the day-to-day

life of the swineherd Jinma Wei (60) and her

husband Laolai Wei. It took a week for Jinma Wei

to ask Michel if he was married; Chinese are not

quick to ask strangers personal questions.

-

- Jinma and Laolai Wei were both born in

this village. They have been married 43 years

and have five sons, four daughters and eighteen

grandchildren. And they herd pigs. The swine-

herds of Lao Zhai live in close harmony with

their animals. They slaughter them for their own

use or sell them to villagers. They cook the

intestines and eat those too. When there is a

village festival they slaughter enough pigs to

feed everyone. The village is too isolated to be

able to take their animals to market.

- The herders keep some pigs longer

than a year before selling them. One of Jinma

Wei's sows has been farrowing for ten years;

they sell off the piglets at two months old for

about 200 Yuan (€ 25) each. A full-grown pig

sells for about ten times that much.

The villagers of Lao Zhai also work the land to

support themselves. Rice is the principal crop,

followed by fruit, beans and lettuce.

- You see very few young men in the

village. Most of them left for the city to seek

their fortune. But Jinma says that she's happy

and content with her life among the pigs.

-

-

036

073

PArt 2

on trAdition, sense oF PurPose, QuAlitY And dreAMs

:politicians refuse to be

guided by knowledge

:adriaan held it all together.

he was the mortar between

the bricks


Johanna Fink-Gremmels is a professor at the Faculty of Veterinary Medicine at Utrecht University. Food safety is a priority area of her academic research. Internationally recognized as an authority in her field, she is attached to the EFSA (European Food Safety Agency).At the end of the 1990s Lex van Hessen approached her for advice. A container of casings had been refused in the Port of Rotterdam, since it contained residues of an animal medicine that is prohibited in Europe. Essentially there was nothing wrong, but a minor adjustment in European legislation caused the container to be detained and its contents even threatened with destruction. Lex and Johanna decided to set to work together on improving the situation across the board, in the interests of the casing industry as a whole.

Lex and I got to know each other when a container of casings wasn't allowed into Europe. I was familiar with European law

trAdition is A keYWord

:it is artificial casings

that have kept natural

casings going – these would

otherwise be prohibitively

expensive

and legislation on food safety and could fill him in on the background. He didn't limit himself to asking what his next move should be. Lex wanted to know what was needed to prevent any other such problems from occurring and what the casing industry as a whole had to do to stay well-informed and broach such issues in Brussels. He hitched his personal entrepreneurship to responsibility for the entire casing industry and for the international trade in casings.

doctoral researchAs professor in Veterinary Medicine I was too busy to address all the issues of food safety and the attendant documents. An umbrella solution was required and Lex's perspective was that there should be a casings expert. A specialist was needed who knew the trade and who could capably represent the casing industry in Brussels. Our approach was focused and practical. In a joint project by

Van Hessen and the faculty a young vet was taken into service, Joris Wijnker, who in accordance with Lex's wishes was

to 'graduate in casings'. The research would be an invest-ment in the future. Joris's PhD thesis described a number of studies into the food safety aspect of casings and the doctoral candidate would soon develop into a widely respected doctor. The greatest yield, however, was that the research enabled the entire casing industry to actively and proactively address the standards for food safety to bring about a real working relationship between the trade associations (INSCA, the International Natural Sausage Casing Association, and ENSCA, its European counterpart)

and Brussels. Food safety had become crucially important in recent decades, in the sense of getting an idea of what consumers expect. This is a typical example of dynamic enterprise in the food industry.

united in competitionAt one of our first meetings Lex and I talked about how you could bring specific expertise from trade and industry into decision-making at the European level. I said that you could only get anything done in Brussels by operating as a sector or trade association representing the interests of the European countries where our trade is active. The represent-ative body would put forward proposals that were appropri-ate to European policy resolutions and framework laws. They don't listen to individual companies in Brussels; you have to bundle your expertise and work together. This is easier said than done, considering that these are competitors in their daily dealings. It costs a lot of time and energy to convince everyone that it's essential to work together if you are to survive as a company.Developments in Europe at the turn of the century brought about a confrontation between INSCA and ENSCA. Lex has invested a great deal of time in reuniting the two players. This sense of responsibility is typical of Van Hessen: they haven't got just their own interests at heart but those of the sector as well. This is an upright and forward-looking attitude. And it sits well with the Dutch 'polder model' in endeavouring to bring consensus within the industry.

One jump aheadLex has always thought about the future. Van Hessen already had a worldwide IT network within its branches before legislation on the tracking and tracing of commodities made this compulsory. It enables them to be decisive and efficient. In my field the ever-present question was what was going to

| johanna fink-gremmels : tradition is a keyword

A GreAter knoWledGe oF tHe nAturAl QuAlities oF CAsinGs CAn MeAn innoVAtiVe ProduCts And APPliCAtions


happen in Brussels. Lex said: 'The casing trade may be small and everyone forgets us, but we're dealing with food too and so we also have to satisfy the demands of quality control and

food safety. European legislation regards natural casings as meat when it's a highly specialized product. We have to learn to translate Brussels rules to suit casings.'Right now there are serious negotiations

under way to implement legislation specifically directed at casings that is a guarantee of sustainable trade – Lex's fervent wish. The first steps in the manual have been successfully presented. Typical Van Hessen, not to meekly fall in behind laws and legislation that are full of surprises and pitfalls. They want to rig up a construct that puts them one jump ahead of future developments.

traditionCasings are a traditional product. Many meat products owe their shape and distinctive look to the different structures of casings. By and large these products are still made along traditional lines and each region presents its own with a sense of pride. It's all about a love of the product, a sense and perception of quality – emotions you discern in Lex besides his desire to always provide top quality. Lex loves to be on the factory floor selecting and checking casings; it's his way of expressing his love of the profession.The casing trade has developed from a rough-and-ready affair to a branch of industry supplying a quality product for high-grade processed meats. This requires expertise and professionalism.

Tradition is a keyword with a great future. Increasing global-ization has in fact led to a greater endorsement of traditional products representing the identity, lifestyle and individuality of the region. There are now far more traditional products from France, Italy and Germany than there were ten years ago. The trade may be international but high-quality products retain their own individuality and traditional form.

enterprise and understandingThe second keyword is enterprise. Lex took over the business from his father and felt obliged to make a success of it. He is a first-rate businessman of few words and much understanding. He has hitched his father's reputation to a bold business approach, sets high standards for himself and expects his workers to apply themselves fully. I have often been told – and have seen for myself, if only from the sidelines – that this responsibility the company feels for the entire casing industry has helped determine both policy and dealings with employees and colleagues. Everyone gets respect. People work at Van Hessen for thirty, thirty-five years. It's a family business in the best sense of the word and so they all pull together – that's something you're now seeing in Elliot and Jan Willem. At Van Hessen, I see another way of doing business. It's good to experience first-hand that this is still happening. I'm benefitting from it as well; never a birthday without a congratulatory e-mail, never a conversa-tion without being asked how I am. Being involved like this gives you a good feeling. The new generation (Elliot and Jan Willem) will have to adapt the enterprise to the current market situation and to the environmental requirements modern international companies have to meet. These new challenges are opportunities to not only retain a traditional product but develop it in terms of modern technologies in the food industry.

At VAn Hessen, i see AnotHer WAY oF doinG Business. it's Good to exPerienCe First-HAnd tHAt tHis is still HAPPeninG

| johanna fink-gremmels : traditie is een sleutelwoord

:see that the friday after-

noon culture doesn't creep

in: lock up at one thirty,

pick up the kids. but if the

canals and lakes are frozen

over, everyone can have a day

off. that's dutch culture


love and respectChina is the number one producer in the international casing trade. This is not just because wages are low there – as many assume – since wages elsewhere are now much lower. Rather, China and casings are made for each other because of the traditional skills involved. The Chinese have the degree of concentration needed to clean and select casings and they've been doing this for thousands of years. So it's no wonder that Van Hessen is considering setting up a second

production site in that country.In China it holds that if you slaughter an animal you use all of it, out of economic necessity but

also out of respect. The love we Westerners can have for animals is unknown out there. We call it love because we attach an emotion to it. Chinese culture is based more on respect, is more impassive and less hitched to personal feelings. Chinese feel love for members of their family, not for animals or a profession.Respect is important in their society – without respect there are no obligations. They respect their parents, and are afraid of them at the same time. They respect the family clan, even though there is infighting. Their respect for nature is unconditional. You can see this most of all in their traditional medicine, based as this is on the five elements: earth, fire, water, wood and metal. Bones, horns, skin, innards and other products of animals (some of which are now protected species) are typical ingredients of Chinese remedies and traditional Chinese medicine along with plants and roots. Comparable products are to be found in alternative

European approaches such as homeopathy. For thousands of years the use of natural products (including animal parts) has been interwoven with Chinese medicinal philosophy, whose goal is a unity of spirit, body and nature. The Chinese have a profound respect for nature and see man as part of that nature. Right now I'm enjoying working with young Chinese vets. Time and again it is my experience that they attach great importance to traditional Chinese philosophy and medicine, though they are receptive to all the latest advances in medical science.

The way ahead: connecting to tradition and innovationVan Hessen's future lies in connecting the modern age to tradition in the use of natural casings. We've done a lot of brainstorming about the quality of casings, the international trade and the part a large company plays in the business. Food safety was a top priority in the past two decades – not just for the casing trade but for the entire food industry. Things are quieter now. The major framework laws are in place, the team spirit in the World Trade Organization is on the increase and rising economies are respecting consumers' wishes to keep them well informed about what they eat.There is more room for new challenges and for activities to expand. Lex stimulated contact with the world of science and handed over the baton to Elliot and Jan Willem. They went in search of new products allied to the casing industry. The first project – supplying raw material to the pharma-ceutical industry – is already successfully under way. There's heparin for starters. Heparin is a substance produced mainly in the intestines of animals and humans. It's an important anticoagulant; heparin is indispensable in the treatment of patients who have been operated on, as it prevents blood vessels from closing. Heparin can prevent a potentially lethal pulmonary embolism. An exceedingly complex molecule

tYPiCAl VAn Hessen, not to MeeklY FAll in BeHind lAWs And leGislAtion Full oF surPrises And PitFAlls. tHeY WAnt to riG uP A ConstruCt tHAt Puts tHeM one juMP AHeAd oF Future deVeloPMents

| johanna fink-gremmels : tradition is a keyword

that can't be produced chemically, heparin is isolated from porcine intestinal mucus. This opens up perspectives for Van Hessen, for this mucus whose upper layer of cells or mucosa contains the heparin, is a waste product removed when casings are processed.

Seeing opportunities and grasping themIn earlier times Western man was just as scrupulous in using all parts of every animal that was slaughtered. This was not just for economic reasons but once again out of respect for the animal. In the industrial era we strayed somewhat from this train of thought but the current discourse on sustainabil-ity has seen it return. We're aware that we must respect all natural sources and use these as efficiently as possible.At present, the scientific world is intensively engaged on researching the health of human and animal intestines, since we now know that the intestine is a key factor in the natural

defence system and helps regulate such conditions as allergies or diabetes. A greater knowledge of the natural qualities of casings can mean innova-tive products and applications.

(Even NASA is doing research into guts – to learn how to most efficiently fold tubes and cables in a tiny space. Nature provided the example, not with the double helix of DNA, but the triple helix in which the intestines of pigs are folded.)Our own guts are exposed daily to thousands of chemical substances and are pretty well infallible in distinguishing between desirable and harmful substances in plants. Another

triumph for nature, one that can teach us a lot. How do I see the future for Van Hessen? They'll keep grasping opportunities and making good use of them!

tHe CAsinG trAde HAs deVeloPed FroM A rouGH-And-reAdY AFFAir to A BrAnCH oF industrY suPPlYinG A QuAlitY ProduCt oF HiGH-GrAde ProCessed MeAts. tHis reQuires exPertise And ProFessionAlisM

:you have to conduct your

business proactively, with

a fighting spirit and with

only one goal in mind

:my concern is not how much

a thing costs but what it

yields


Tex Gunning is a member of the Board of Management of Akzo Nobel Nederland and on the Executive Committee responsible for Decorative Paints. He is known for his unorthodox approach to leadership, with a spiritual slant. In no way vague or New Agey, he's a passionate leader who is intensely interested in people and the role of business in society. Tex sees many of his beliefs reflected in those of Van Hessen BV.Akzo Nobel's slogan is 'Tomorrow's Answers Today'. Tex analyses the exceptional company culture at Van Hessen and urges the Rotterdam market leaders to protect and preserve the crucial factors for success.

Van Hessen is a typical family firm almost to the point of exaggeration. It satisfies the prime condition for a healthy work culture: people want to live and work in a community. Van Hessen provides this sense of belonging. You can see this in

CoMMunitY, sense oF PurPose, And sPirit

:give yourself a talking-to

at the first sign of egotism

or when your emotions start

to take hold

the pictures in the previous celebratory volume Guts & Glory; they illustrate the foundations of success. See how close to each other the staff is standing. See how the company is run. Father Paul let his son Lex be moulded and shaped by his people in the factory so that he could absorb and integrate the culture.The second condition is sense of purpose. This despite the product – casings are no more and no less than casings, but

also a means of getting fed. Van Hessen has been able to think beyond the casings. They talk about sausages in that

book but also about the Dutch, the Chinese and butchers in Australia. They have been able to purposefully define their work, all the way through the company culture. The customer isn't the butcher, it's the consumer who wants to eat rookworst (smoked sausage) when there's a hard frost. They identify strongly with the end product. This sense of purpose isn't industrial but traditional. People get no pleasure from producing cheap rubbish. They feel a spiritual affinity with a product when it's the real thing. Natural products and quality awareness sustain that sense of purpose.The third element is spirit. That's something they have in abundance at Van Hessen! There is an element of fear in Guts & Glory, the kind you might have of your father. 'I know Lex wishes me well, but what am I in for now? What has he got to whine about this time?'The three pillars of community, sense of purpose and spirit are as large as life at Van Hessen. You can feel their presence as you read the stories. These three elements come together whenever a business is family-run.

Ownership and dependenceThe sense of ownership permeates all the genes of a family firm. Every euro is a euro. This property model is the most powerful model there is. In fact we should all get back to it. I can see it at Friesland Campina, where I'm a non-executive director. Everyone is seriously committed in such cooperatives; the shareholders really do have a share in the company. Their own future depends on it, and those of their children and grandchildren. At Van Hessen the staff are dependent on it, their families, their suppliers. Not just that: if Van Hessen fares badly, it affects the trade as a whole. 'A healthy casing trade is in our interest', they say. I think that's a wonderful message. In co-existence you're stronger as a team. That's an aspect of ownership.Paul built the company from the ground up, as a gentleman diplomat. Good customers, good suppliers. Everyone is loyal. Competition grew during the industrial phase, a cut-and-thrust struggle. And just as technology began threatening industry, the right man took the stage. Lex abandoned his studies to work in that factory, from top to bottom and in every corner of the planet. All these foundations are mutually strengthening.

protecting the success factorsThe leader is the culture, but he also has his own life and withdraws at a given moment. The transition from family to other shareholders is a risky phase for every family company. It wouldn't surprise me if academic research were to prove that this moment is the beginning of the end. The cause? The ties between ownership, leaders from the family and culture are so embedded in the company genes that at some point they are not sufficiently recognizable as critical success factors. The best advice for such firms is to be explicit about the success factors and protect these with everything in their power. This means ruthlessly selecting new people

| tex gunning : community, sense of purpose, and spirit

You Must HAVe rAzor-sHArP ProFiles And HAnd-PiCk Your reCruits FroM AlonG tHe touCH line oF tHe soCCer PitCH


:most people think they're

done once they've issued an

instruction. at van hessen,

something is only done when

it's finished


according to culture and other advantages, and not on whether the candidate is, say, a professional accountant.When I was working at Vedior, I was involved in the merger with Randstad. Two utterly different companies. Vedior was the brainchild of Dreesmann, a born entrepreneur. Buying, selling, buying, selling, all day long – if you're earning a lot, so am I. An open culture of greed. Goldschmeding, the director of Randstad, began when he was a student. He built up his company block by block, in the most integrated of cultures.

Goldschmeding was all over that company, made all the decisions, was right there on the ball. At one point he went so far –

something for Van Hessen perhaps? – as to send five of his staff to a psychoanalytical practice with the words: 'These are my five best people. Make an analysis of their character-istics and then you'll know how you are to test my people in future.' The psychologist reported to Goldschmeding that he thought two of them were top-notch, that one was a doubtful case and that he couldn't understand why Goldschmeding had sent the last two. Goldschmeding had deliberately chosen two nondescript workers, two excellent ones and one he wasn't sure of. From then on they selected their staff on this basis. Randstad has a mixed bag of workers but they all have something very important in common: a high social intelligence and a small ego.

genetic codeTraining the next generation of executives begins with the process of selection. If you expand the management with specialists with no affinity for the casing business, you lose the commitment. You need to know your own genetic code.

Lex trusted his intuition, saw a fine open-hearted fellow playing soccer at HVV and tested him out. And it worked! He has undoubtedly taken on people where it doesn't work at all but you don't read about those. As the company owner he can do it this way: if he's had enough of somebody or sees that it's just not working, he sends them packing. But if you want to professionalize the organization on all fronts simul-taneously, you can't keep relying on intuition. You have to protect whatever it is that has made the company a success. Van Hessen's success came despite the market, despite collagen, despite global competition, despite problems with veterinary regulations. This was by sticking to its principles and staying faithful to the casings. That's no mean feat.One thing you must hang on to, of course, is the customer. I think they'll have made a big mistake at Van Hessen if they stop travelling. Purchasing is so incredibly important for this company, these are money matters. It is essential that you know your product.

Valuable acquisitionsAt Van Hessen there is a sense of community. The family feeling is a strong component of the culture, one that is passed on to each individual employee. 'This is us, this is our way of doing it, this is what we stand for.' As clear as day. The management has to be open about the ingredients of the successful culture, and think about how to keep these valuable acquisitions and the customer-based culture safe. New people need indoctrinating so that the company can keep going on, and on, and on.The story about the monkeys, the bananas and the water is of relevance here. Researchers placed eight monkeys in a cage and hung a bunch of bananas in the top of it. The monkeys made a beeline for it but had a basin of water thrown over them for their troubles. Every time they went for the bananas, they got soaking wet. Eventually they all

iF You tHink too BiG, You're done For


stopped trying. Then the researchers took one monkey out of the cage and put another in its place. This new monkey didn't try for the bananas either. The act of replacing the monkeys was repeated several times. In the end all the original animals had been replaced, but still not a single monkey made a move towards the bananas, even though none of them had been doused with water. They were thoroughly indoctrinated.Van Hessen would also do well not to change too much at once, as then you miss out on the indoctrination. If you replace four monkeys simultaneously, they'll make straight for those bananas. It's a transitional process – take one out, put one in. Lex takes a step backwards, Elliot takes one forwards. Okay, a new HR administrator then, but not at the same time as a new finance man and other top people, as then you can wave goodbye to your unique culture. You want Van Hessen people, not brilliant students from the Erasmus University! You have to indoctrinate them one by one. One monkey at a time. You have to decide beforehand how many people you will be taking on during the next five years, never

more than so many at once. They first all begin in the factory, first all visit customers,

first all work in China. All of them. Anyone who doesn't want to can leave. They have to get to feel at home in this bustling organization, joined together in a community, under a difficult but loyal boss. They can do what they want, they can go to China, make mother-in-law proud. And this brings you to the aforementioned three pillars.

growth is a fundamental needPeople love to be in a close-knit organization, if their work has a sense of purpose. A sense of purpose – this is not

about making the world a better place but about relation-ships between people. Everyone should be able to show the best of themselves. That makes it pleasurable and so you feel like going to work in the morning. They all feel this way at Van Hessen, in the morning, and think: 'Maybe it'll be hell, as they're taking me out of my comfort zone, but it can also be fun. Anyway, we'll survive.'You go home at night and think about what you have to do better next time. You're growing, and growth is a fundamen-tal need. Even when they score a major success they get together to evaluate it and discuss how it could be improved upon next time. Now that's smart. You need to keep up such ingredients of the success formula. And you can, if you take one step at a time, the way Goldschmeding built up his company. Hand-selected, tests, upgrading from the inside outwards. If you don't do it that way, you're sunk! And that's a fact. The bad part is that you don't see it happen. There are all kinds of possible reasons for this. The market is a little trickier, purchasing is a little more expensive, there are more import restrictions, collagen is performing better, take your pick. You don't see why things are gradually getting worse. But you can see why things are going well, and this is what you have to hold on to.

passion and ambitionEach generation has its collective characteristics but there are always individuals with tremendous ambition. Ambition can allow the least talented among us to do things better than their fellows. These people are everywhere. The trick is to find them, select them and keep them on track. There are youngsters queuing up to be able to spend some time in China; this has nothing to do with Generation X. But most of them drop out once they've heard that Van Hessen is about sausage casings. And those are people you don't want, as this company can only survive with people who have read

it's ABout CAsinGs, CAsinGs And CAsinGs


Guts & Glory and think: This is a very special company and I want to be part of it. Van Hessen can use the book for recruiting purposes. You're looking for people with enterprise

and the urge to travel, who take life's stranger stuff in their stride. Not that Van Hessen isn't aware of this, but the recruiting

procedure is important. This is where the brand-new HR manager can come unstuck. He's learned that recruiting is done such and such a way. Now, the standard method from his textbook doesn't wash with Van Hessen. You must have razor-sharp profiles and hand-pick your recruits from along the touch line of the soccer pitch. There you see that athletic fellow everyone ignores because he took six years to get through secondary school but he's the fellow you want. Off with him to the psychological test. If the feeling is right, ask this fellow to come and work with you for a while. Young people want to work at Van Hessen because of the rock-solid culture, not because of the casings. But looking ahead I would say that the company is vulnerable if four new monkeys arrive in the cage at the same time. Do what Goldschmeding did at Randstad: allow Lex to remain involved for a long time. The CEO will have to sit patiently for a while yet: 'Sorry, Elliot, but we have to talk because I don't agree with what you're doing right now.'

Specializing is the best protectionIf you think too big, you're done for. It's about casings and nothing else – how do we crank up the quality? How do we and our lawyers protect the license to operate? It all revolves around quality. In the world of consumers there's an anti-industrialization movement on the rise. People want to

return to pure unadulterated products and the small scale. In modern slaughterhouses you can see photos on the wall of meadows with the cattle that provide the meat. Consumers are tending more to buy directly from the farm. Friesland Campina distinguishes itself by guaranteeing that in summer all their cows are let out of the barn into the meadow. That's a good decision.The swelling world population means that the market continues to grow, with in the West a strong trend towards natural products and quality. Specializing is the best form of protection, also for Van Hessen. Make sure that you're the best in what you do.

:my father lost every

discussion. i considered

him a softy, but at the end

of the day everyone did what

he wanted

AMBition CAn AlloW tHe leAst tAlented AMonG us to do tHinGs Better tHAn tHeir FelloWs

:we've made mistakes. merging

is one of them. when com-

panies merge the differences

in their cultures persist; a

takeover allows you to stamp

your culture on the result

:if gross margin and costs

are out of balance, don't

use all kinds of excuses to

look away but take action

| gut feeling. A future in trAdition | 110 Years of Guts and GlorY at Van Hessen096

QuAlitY CoMes First

Elliot Simon (CEO) and Jan Willem Vreeburg (CFO) took over in 2009 from Lex van Hessen and Adriaan van Eeghen respectively, after a period when the four of them had led the company together. They were moulded and shaped to the tried and trusted recipe: start at the bottom, hands on, keep your eyes open and keep learning.They see their biggest challenge as expanding the company and making it even more professional while retaining those elements that distinguish Van Hessen and define its success. Here they exchange ideas about the tasks that lie ahead of them.

| JW In the early '90s Van Hessen was one of the first companies in what was then still a fairly traditionally run line of business to change tack. The company took a leap forward, as Lex and Adriaan realized that Van Hessen not only had to excel in purchasing, production and sales

:predicting the future is

difficult, but it's easy too.

vision is seeing the invis-

ible, but then realistically

and not idealistically

097 | elliot simon & jan willem vreeburg : Quality comes first

but also had to professionalize the support to the primary process.

| E Lex always said you had to make sure you were the duckling swimming up front behind the mother duck, as the one at the back is always the first to go.

| JW I'm a registered accountant and was one of the first outsiders to join. Lex saw something in me, trained me, took me with him to Singapore, Australia, New Zealand. Which owner invests so much time in a financial controller? He's

done the same for others. Such devotion binds people to the company. Everyone wants to be appreciat-ed, to gain recognition

and fulfil their potential; I'm aiming for the top of Maslow's pyramid myself. I was able to quickly work my way up to a decent position. This has always been one of the attractive aspects of Van Hessen.

On flexibility in the labour circuit| E One of our challenges for the future will always be to find the best people. We're not that big and don't need many employees but they do have to feel content in our company culture. In that respect companies with a sexy product, Google for example, have an easier time of it, but we've managed to establish a reputation in the network of universities and other institutes of higher education as a high-profile company. Reputation is so important.Van Hessen has never taken an experimental front-line position on working conditions and this role just doesn't suit us. It was the in thing for a while not to have your own workplace, to do your conferring standing up and to

take time out to meditate. The important thing is to be an attractive employer with growth potential, external training programmes and other aspects valued by young people. This means having to move with the times.

| JW We have to stay one up on the competition. This is where sustainable business practices and the new world of work come in. Young people underachieve when confined to a straitjacket from nine to five. Generation X is happy to start work at six in the morning but then stop at two in the afternoon. I still have to get used to the idea, but perhaps we can take another leap forward by embracing the new work culture and the flexibility of the labour market. How do you prevent people from wasting time daily in traffic jams on their way to work? How do you make sure they're happy here?We try to make self-reliant businesspeople of all our colleagues. Some even have shares in the company, although in effect they're shareholders just once a year at the Shareholders' AGM. The rest of the year they're back to being employees. It's incredibly motivating to know that in some way this company belongs to all of us. We want to do everything better, and get agitated if things aren't going our way. How do we ensure that our people feel at home here and, in this way, attract new top talent? That's a key theme for our future.

| E I'm sure what you read about Generation X is true, but where does that leave us in practice? We do our best to keep attracting talent, although it doesn't always go the way we'd prefer. That's something we have to improve. We've taken on an HR director to organize these procedures so as to ensure greater success. When recruiting we look for particular core values and competences. Everyone has their place in this world, but it's difficult making a success of it at this particular level. You have to be prepared to occasionally

sCAle is iMPortAnt, But More iMPortAnt is GeoGrAPHiCAl sPreAd

| gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen098

excuse yourself from playing soccer on Saturday afternoon and let your friends paint the town without you on some Friday nights. People who want to hang on to what they've got whatever the cost won't feel at home here in a hurry. Unless you and I want to be still running the show when we're eighty, we have to give young people a place where they feel content, in a team they want to be part of.

On Chinese management| E We don't place ads for staff. We do our recruiting actively at the Erasmus University, Nijenrode and other such institutes; we look for entrepreneurs for our positions at business schools and in our network. We send out students to do research in China, Mexico or India. It's not just for the research, but more particularly in the hope that one of them comes up to our office and says: 'Hey, this is a pretty cool company, I'd like to work here'.We are hoping that within ten years the majority of our top managers in China will be Chinese. CEO's in China run

up against the same problems as we do here. They've built up their company, but what then? There's no second tier of managers, so it's all up

to that one man at the top. Our team in China is unbelievably dedicated. Soon they are going to have to show what they're made of. We offer training, support, growth potential in the organization. In time a number of people there will rise up through the ranks. That will take another three years or so.

On india and africa| E We've sent two students to India to check out the market for opportunities for our company. The agricultural

attaché in Delhi had informed us about the situation. There they slaughter mainly buffalo and sheep but there are more and more areas where they eat pork and the sausage consumption is on the rise. The burgeoning prosperity makes India an interesting proposition for marketing our casings and possibly for tapping a new source of raw material. The growth in affluence is less propitious for selecting because of the rising wages.It's different in Africa, where there's an opening for us in production. The quantity of sausage consumed there means there's a sizeable market. South Africa, but also North African countries and particularly Egypt and the Middle East have a tradition in our line of business.

On quality, the work environment and raw material| JW Our main concern is satisfied colleagues and satisfied customers. One way of achieving customer satisfaction is by supplying product of a consistent quality, a quality that is just that little bit better than requested. Another is impeccable service in the broadest sense of the word. You can only attain these two goals with a good team of colleagues who are happy in their work.

| E Three things matter to us. Quality comes first. Not just for our customers and suppliers but also internally, for our own people. Next, there's the right work environment for everyone. Third on the list – and this is more down to earth – is a guarantee of raw material. In this business you're nothing without a long-term supply of raw material. It's easy to forget this in times of abundance, such as now. You can buy hog casings everywhere these days, but given the world popula-tion growth there's bound to be a shortage sooner or later. We are preparing for this, as we always have done.

PiCk uP tHe BAnk notes or leAVe tHeM? it's A BiG dileMMA


On crystal balls and feelers| E Our planning horizon is three to five years. That's quite a long way off. There are some external develop-

ments we can't influence. They just happen, and can either discourage you or spur you on. If the sun doesn't

shine for a month, the animals have less to eat. This influenc-es their development and so also the quality of the casings. You can't anticipate such factors but they do need dealing with immediately. Anything you see in the crystal ball in the longer term has little meaning for our day-to-day running of the company. Hence our slogan: 'Think long term, act short term'.

| JW But we do put our feelers out. Some things come at you by degrees. There are the rising costs of energy and labour, particularly in China, a growing world population, the need for sustainability and greater food production. And there comes a time when these can work for you.

| E In 2008 the food giant Nestlé announced that by 2020 it would be a wellness company instead. If you want to transform anything that size, you have to look far ahead. But should we be considering our position in twelve years' time? Maybe by then we'll have nothing to do with casings at all, although until now we've always reached the same conclu-sion: we are casings people to the core.

On our task| JW Lex and Adriaan have passed on the ultimate responsibility for this business to us. We in turn are only

passers-by, our task being to hand this company over to the next generation. Natural casings are our core product. Over the years we have added a number of supportive activities. Heparin and other by-products of the slaughter now contrib-ute much to our overall result.

On international legislation| JW We are doing all we can to stay abreast of the agendas in Brussels, Washington, Beijing and elsewhere. We have a good network plus the experience of Lex and Adriaan. We know our way around Beijing pretty well and are continuing to build upon the network that Paul van Hessen had assembled from the 1960s onwards. We must and shall have a say in how things are done. Armed with this thought, we are careful about how we handle our business relations.

| E If it's about casings, we can then exert some influence. These are long-term procedures and we're not giving up.

| JW It also works as a deterrent. If legislators know

:i can make people for the

future but not the future

for the people

We WAnt to do eVerYtHinG Better, And Get AGitAted iF tHinGs Aren't GoinG our WAY

0101| gut feeling. A future in trAdition | de toekomst is vAn ons nAAm en AchternAm| 110 YeArs of guts And glorY At vAn hessen100

you're ready to fight, they'll think harder when drawing up proposals.

On the importance of sausage| E Casings are a key product for Dutch consumers. Look at the quantity of sausage in the supermarket or at the

butcher shop. Sausage is even more important in countries like Germany and France. When the BSE crisis hit, we saw what happened when production was halted.

This affected the entire industry, not just casings. In Switzer-land the scarcity of beef casings for producing cervelat even made the front pages.

On artificial and natural casings| E There has always been a natural balance between artificial and natural casings. If natural casings are cheap enough, they are the preferred choice. This is the best way to make sausage and always will be. It's skilled handiwork, and the result tastes better. Natural casings possess qualities that have yet to be produced artificially. True, there are cheaper alternatives – some of them excellent – but the price will always stabilize and there'll always be a need for natural casings. Collagen casings come the closest but collagen isn't inexhaustible either: you need beef hides for it and the slaughter of beef is decreasing. Germans insist on Nuremberg bratwurst in a natural casing. Nothing else will do.

| JW Not every artificial casing is made to copy or replace natural casings. Casings made of, say, PVDC are used for packaging another product entirely, with another market

orientation. And don't underestimate the production costs of collagen, for instance in terms of energy consumption. An aspect increasingly to the fore is the negative image: why try to imitate a fine natural product?

On the stagnating meat consumption| JW You might wonder whether in a hundred years' time we will still be producing the proteins necessary for human consumption by breeding and fattening livestock. Maybe we'll be compounding protein in another way by then. After all, it's only a combination of chemicals. So why fatten cows for that purpose, inefficiently and producing unwanted greenhouse gases, when all they do is take up space where plants could grow?

| E In Europe and the US the meat consumption per person is lessening already. Perhaps Western prosperity has reached its peak. But in countries like Ukraine, Russia, China and India it's still on the rise. You can see a correlation with meat consumption. Maybe it will peak there too but that's a very long way off. And even if it does, we are still left with a fabulous market where we want to be the best.

On the social importance of eating| JW The way I see it, the quality of life is a lot lower in a world where the greengrocer with his seasonal products is a thing of the past and the meals come in pill form. In many cultures life revolves around food. Just think of China, where they greet each other with the question 'Have you eaten yet?' Eating has a social component.

On the production chain| E Customers will buy our natural casings if we make a good product, work with them on developing new products or a more efficient production, and provide added value.

'HeY, tHis is A PrettY Cool CoMPAnY, i'd like to Work Here'

:my philosophy is this: time

solves 95% of problems, 2%

are unsolvable and you can

work on 3%. the trick is to

find that 3%. whoever decides

to work on the 95% is wasting

their time and tackling the

2% is only going to drive you

crazy


As long as we provide quality we have a purpose in life. I'm convinced of this. We can keep operating in the front line, even if the demand drops and there are fewer slaugh-ters. Of course, this depends on having a forward-looking perspective and an urge to develop. With this in mind we visit sausage factories on a daily basis and scarcely ever supply the trade these days. We want to be involved from one end of the chain to the other, from slaughterhouse to end-user. This is why getting information is so important to us. We want to know what's going on, as much at the source as at the final destination. We need to receive these signals, analyse them, understand them and translate them into action.

On working with others| JW I believe in specialists working together. Eight years ago we entered into a strategic working relationship with the Westfleisch slaughterhouse in Germany, because they weren't satisfied with the way they were selecting and selling hog casings. Westfleisch slaughters seven million hogs a year. Thanks to our collaboration they now get an extra five feet of intestine out of each hog (times seven million...). And they didn't need to do a thing, except consider working

together with Van Hessen, the casings specialist. The same holds for meat product manufacturers and rendering plants. It's too difficult to have full control over the entire chain – let us do what we are good at. We know exactly which casing type is in each barrel and which sausage you can make with it. Steve Jobs was obsessed with his product and thought up the rounded corners of the iPad himself. Apple now has 20% of the worldwide turnover in its sector and 80% of the profit.

On uninteresting turnovers| E The outside world thinks our product isn't sexy, but I'd say it is the real deal! Casings are one of the world's last commodities without a stock exchange listing. Now doesn't that make it a great product to work with? We can produce casings of different quality, thanks to our know-how and craftsmanship.

| JW Yes, and we can continue to grow as well. There's enough to be gained beyond our current share of something over 10% of the world market.

| E Right, but regardless of how ambitious we are, we only want to grow if the market demands our services and if it adds value. We're not interested in a rise in turnover if there's no change in profit. We will grow only if it's good for all concerned.

On money as a yardstick| JW If you want to be the fastest sprinter in the world, you shouldn't pay attention to your times. Just make sure you're fit, have the right shoes and eat the right food. When you cross the finishing line, you'll see whether you were the fastest or not. This is the ambience we must create, and not concern ourselves with money and profit all the time. I'm finally beginning to understand what Lex always said: 'I'm not

:there is nothing to beat

the real thing, although

synthetics can have advan-

tages. a polyester shirt is

easier to clean and doesn't

always crinkle


interested in money; money is only a yardstick for measuring success.'

On the netherlands as a domicile for business | JW There are many problems we can do little or nothing about. Livestock diseases are impossible to fend off and the

political process is out of our hands.However, there are other matters we do have control over, such as choosing where we locate our head office

and management team. Should the French political and tax situation so unfavourable for companies spread to the Netherlands, then we owe it to our company to relocate these components elsewhere. As an international company we operate on all continents. The volumes we buy and sell in the Netherlands are highly valued but relatively small. With the present state of technology we could make key decisions from, say, Switzerland or China. For distribution within Europe we remain dependent on a port city like Rotterdam. We are not planning to relocate that component.

On increased work flexibility| JW You have to set an example yourself where work flexibility is concerned. I don't really need to be here at the office every day.

| E It's even better if you're not, since when you're there some people can't resist knocking on your door to ask for the solution to some problem. It's crucial that the responsibility rests squarely on the right shoulders.

On organic growth| E We haven't engaged in major takeovers for some years now. Acquisitions need to strengthen the company across the board, whether we're talking about raw material, selecting or distributing. We're not interested in widening our range of products. Scale is important, but more important is geographical spread. We're still not active enough in some markets. You can also grow organically, simply by doing your best.

| JW After Lex and Adriaan left we were inundated with work. We've had our hands full, which is one reason why there have been fewer takeovers. Whenever we take over a company, we do it from a solid platform. We shouldn't try to bite off more than we can chew.

| E We let the organization grow at the same pace throughout its components. We need to widen the top so that you and I can concentrate on development. Everyone stops to think when there's a regime change. What does it mean for me? What's the future going to be like? Some employees wondered what their career perspective was at Van Hessen, drew their own conclusions and left, even though they had a great job here. It was annoying at the time, as it placed even more on our shoulders, but a clean-out is good for the company.

On frustrations and a good atmosphere| E There are times when we say to each other: Let's cool it for a while. Is it really necessary to take that long trip? What's the purpose? It's frustrating to have to let something with potential get away because of higher priorities. You must let it rest and concentrate on the things you're engaged on. But sometimes I think: darn it, we should really have forced the issue. We could have made some big

in tHis Business You're notHinG WitHout A lonG-terM suPPlY oF rAW MAteriAl


takeovers, with companies approaching us. It's flattering, but then what? There's the risk that we're not ready to handle it. In that case we'll stick with the present Van Hessen: independent, self-possessed, with our own people, good training, focused on what we have to do, in a good working atmosphere.

| E We were pretty well complete at the last Christmas lunch. A hundred of us had a brilliant weekend in London. The atmosphere was great, without undermining the founda-tions of our culture, namely saying what's on our minds. I see that as more important than missed opportunities. Lex once said he couldn't leave that ten-euro note lying there. The notes I see have 500 on them!

| JW Pick up the bank notes or leave them? It's a big dilemma.

On getting a sense of the profession| E Even our new HR man spent three months up to his elbows in casings. It wasn't easy for him, as it's not his area of expertise. But if a person's not willing to

invest time on the factory floor we don't hire them. Even the company directors spend time with the casings. This aspect should never slip into the background. Everyone should feel the product and understand it. I happen to be passion-ate about our products. People who will work for us are light years behind you and me. They should get to know the product well, not just to be able to understand the people who work with it every day but to be able to do their own job better.

On continuity| E Every day you and I see to it that there is continu-ity. There are two sides to this: work hard at the business today, but shake yourself out of it now and then to think about tomorrow. We're talking about a wide range of factors that determine the price of casings. For Ronald Lotgerink of Zwanenberg it's the daily fluctuations in the price of pork that are important – Zwanenberg does its purchasing on that basis. Ronald is a models man – he transforms all the relevant data into a long-term model. I do it differently; we hear something and then decide whether we can use that information.

| JW Discussions with our bankers and non-execs are important when it comes to long-term trends in financial matters. So are domestic and foreign publications.

On men and women| E Most of those on the work floors in casing workshops and cleaning plants are men. You get these hefty types working in the meat and casing industry. Our people feel comfortable among them and hold their own in their company. In China by contrast we have mostly women on the payroll, also in senior positions. The ratio of men to women can become a challenge in the future, as in some countries the percentage of women is determined by law. What happens then? Companies visit the supermarket and convince a female cashier to join them instead for a slightly higher wage, without having to move a muscle. Not the most desirable of situations. Typical female qualities could be valuable to us, however. Our colleague Harma Eilander is proof of that; she holds an important position in safeguarding product quality. We've never paid any real attention to the ratio of women to men but it's something we're going to have to work on.

it's inCrediBlY MotiVAtinG to knoW tHAt in soMe WAY tHis CoMPAnY BelonGs to All oF us


| JW We don't discriminate negatively or positively.

On politics| E It's sad to see that the political leaders in this country lack the courage to push through major reforms when these are so necessary to get out of this crisis.

| JW The government points out that SME's are driving the economy when they are making things difficult for these very companies. They promise tax cuts and then issue the meaningless decree that municipalities may only send one invoice for the charges instead of five. Sit back and count your profit!

| E We're working on the future and have our ideas about the role of companies in society. We're gravely concerned about the lack of pioneering spirit in the way companies can operate. Innovative centres leave for other countries, as there's evidently nothing for them here.

| JW We're also worried about the increasingly low quality of education. In the past, good education for all sections of the population was one of the Netherlands' critical success factors. It's an illusion to think we can economize on education while maintaining the quality. Indeed, the govern-ment should be investing more in education so that this can be considerably improved.

On wish lists| E I don't have a list of priorities but there are three things I would like to see in place sooner rather than later. The first is the end of restrictions on the export and import of casings through the lack of protocol. It must be possible to have free trade in casings.Secondly, I would like to have a fantastic HR organization.

We've become too big to operate HR from just the one chair. An attractive work environment, a solid structure for traineeship, management development programs that make a difference, polished appraisal interviews and assessment rounds, an understanding of what we expect from everyone in behaviour and competences... It would be amazing if you could drive the business that way. That's so important for the continuity of our wonderful company.Last but not least: it would be brilliant if I could demonstrate to our suppliers that a system of short-term commitments restricts their own interests in the long run; that together we could create value by stipulating long-term conditions; that we get the right qualities and the right quantities, with no restrictions. Plenty of work to be done!

:the decision to concentrate

on china, our chinese

company, our chinese friends

and our chinese business

associates has enriched us,

in every sense

:we take the responsibility

of being market leader very

seriously


Jeroen, René, Karel and Simone Teijsen together made up the third generation in the family firm of CTH (Combinatie Teijsen Van den Hengel). Their grandfather had begun in about 1925 and their father succeeded him. CTH deals in casings. The Van Hessen and Teijsen families are competitors but have got on well for decades. Father Bep Teijsen (78) still pays a weekly visit to the firm and keeps close tabs on what CTH and Jeroen and René are up to – they and Nicolette Raaijmakers are the current board of directors – and how business is proceeding. Jeroen (50) describes his expectations for the company, the business and world trade.

I usually start at six thirty, then I can get some things done before the phone starts ringing. I don't notice the time, and stop when I decide to stop. Meetings, dining with customers, travelling, home late, up and about again early next morning.

our dreAM: one CertiFiCAte For All CAsinGs

:there are just three steps

to organizing a company.

1) know what you want,

2) make your plan and

3) carry it out. it's that

simple!

109

Sometimes for weeks on end. It's exhausting, but varied and exhilarating. I love it.Every year we're supplied some 50,000 tons of lungs, liver, gizzards, spleen, udders and kidneys. These are mixed, ground and frozen, or cool transported to the pet food industry. But our main business is processing casings from European slaughterhouses. After cleaning and salting these are sent to our factories in China or Portugal. A part comes back to be sold. We always have plenty in stock, not least because of the long transport times.

going professionalDad transferred the shares to us and let us make our mistakes. I think it's great that he's still so involved, as it means we can ask him his opinion. He has become more cautious with age. If René and I tell him what our plans are, he says: 'Are you sure about that?' Sometimes he rings us

up two days later. 'We had something like that going in '68 – if I were you I'd do this, that or the other.' He has

a hard time letting it go and he's not the only one; there are many who've been here for forty years and last year there was even someone who'd spent fifty years at the firm. People who love the profession never leave it. In the casings industry you only stop when you're laid out on the slab.Our joint venture with Vion, Europe's largest meat processor, has professionalized our company. We had wanted to safeguard our stock of raw material. Vion had a casings production site in Germany that was causing them grief. The

takeover talks ended in an all-in deal, a success for both parties. This solution also meant that the company's continu-ity was safeguarded. CTH will keep going after we've retired. Perhaps without a Teijsen on the board – too bad, but that's the way it goes.

the teijsensMy brother René handles the sales and everything to do with selecting. I do purchasing and production. We complement each another and one always knows what the other is up to. Karel is manager of the Spanish department and head of Quality, Simone is responsible for HR and for keeping the automation system up and running. A system like this costs a packet but you can't be without one these days. In general, investments lead to a reduction in staff, but investing in IT means bringing in more people. You can't do a thing unless every step is there in the automation system. The firm has grown so rapidly in the past ten years that we had to have a professional control system. If you don't have reports on the crucial subjects, you're done for.We realized years ago that our children would have a hard job taking over from us. It only works if you really are good. I worked in the slaughterhouse every summer holiday and learned as I went along. The younger generation has to study and gain experience.Many managers today don't know what the profession involves and end up making the wrong decisions. I've always been greatly taken with Van Hessen's trainee programme. You bring in well-qualified people and teach them this profession. We give practical training ourselves. Everyone here knows the ins and outs. Specialized expertise is an absolute must. For managers too, unless they have really good consultants. Even the Prime Minister doesn't know everything.

| jeroen teijsen : our dream: one certificate for all casings

FortY Per Cent oF tHe QuAlitY And tAste oF knACkWurst CoMes FroM tHe 'snAP' oF tHe sHeeP CAsinG. Pure PsYCHoloGY

0110 | gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen 111

in competitionVan Hessen and CTH are competitors, particularly in sales, but it's our joint interests that count most. In the casing business generally speaking we're willing to compromise and look to the future. Our saying is, that if our competitors are earning enough and prospering, we're prospering too. It's a

good attitude to have. These days we use our common sense much more than we did – then we just wanted a customer, whatever it cost. You can compete

with each other until you're blue in the face, but the only one who benefits then is that customer. Take the meat industry, where the competition is ruthless in the extreme. The supermarkets call the tune there. They toy with the slaughter-houses, say by extending the settlement period to sixty days, when the slaughterhouse has to pay within a week. A slaugh-terhouse isn't a bank, it can't finance that period and has to close down. Another then takes over the customer. As long as such practices persist, the meat industry will be in trouble.

looking after your interestsFor the past years CTH and Van Hessen have jointly chaired the HBS (the Dutch Natural Casings Association). My father took over from Lex van Hessen, and I in turn took over from my father. Adriaan van Eeghen was a board member for a while, and now it's Jan Willem Vreeburg's turn. Board activi-ties are time-consuming and it's unpaid work. My father and Lex still ring each other up, and I often confer with Elliot. Such as recently, when relations between ENSCA and INSCA were on edge. That's bad for the business, since we have to present a single front to Brussels. Luckily we managed to calm things down. We confer on international

interests and have the same perspective on the future as regards legislation and how to be one step ahead of it.The HBS is important, as the Dutch government only communicates with a trade association and not with individ-ual players. You need to present a well-founded argument. For the last ten years the government has been responding to us better than in the past. We come under agriculture, thanks to our extraterritorial reach. The Hague is beginning to understand that statements made by the Ministry of Economic Affairs, Agriculture and Innovation during a trade mission could spell trouble for us too.

Casing certificateThere are still some countries engaged in trade conflicts due to a clash of interests, even within Europe. They shut their borders to certain materials and make demands that we are unable to meet. And in the Dutch veterinary world there are those who are incredibly dogmatic about some things, so that even fellow countrymen are hindering us. So it's a continuous struggle. This certificate business is an important issue for us. We've been fiddling around with the Brazil file for six years already on the subject of exporting hog casings. We've finally reached an agreement, after dozens of

You CAn't BeAt sAusAGe in A reAl CAsinG

:you need to celebrate your

successes, but celebrations

must not serve to loosen

your grip



certificates flew back and forth. Processes like these usually put you back years. You need lots of luck to get it over with any earlier. I've learned to stay patient. Family firms are used to turning left as soon as the decision to turn left has been made. Not in a year's time, but now! It works differently in The Hague and more particularly abroad. Russia is a political country. It wants to do business bilaterally, whereas Brussels wants to impose general conditions. Russia's trade restric-tions on certain products is shameful. When they themselves have enough of something, they brazenly declare that they've discovered salmonella.Our life would be a lot easier if world trade were entirely without barriers. The market price wouldn't change because of it, but we would increase our turnover and the lower costs would allow us to improve the profit margins.One certificate for casings – that has always been Lex's dream. Mine too. It can be another ten years before we have

a single yardstick for the production method and quality assurance. Then every food and consumer product authority could guarantee a product

was safe, whether it came from Pakistan, the US or the Netherlands. At present the casing industry has to hang onto the coat tails of other products and is therefore dependent on agreements made in that other industry. There has to be a casing certificate, period. If Brussels and the OIE (The World Organisation for Animal Health) are behind it, every country will have to adhere to it and worldwide free trade will become a reality.

Volatility and qualityThe biggest difference between now and ten years ago is the market's volatility. The speed of doing business is influencing

prices. Any changes I make now they'll know about in China within five minutes, and vice versa. Thanks to smartphones and laptops everyone can see how many animals are being slaughtered worldwide and what the situation is with regard to the availability of raw material. Hog casings dropped in a short space of time from an all-time high to an all-time low. In casings we're used to thinking in the long term. We don't need to sell tomorrow – this product can stay put for years.Differences in price are expected to increase in the years to come, thanks to the openness of the market. It's how the mobility of prices is resolved that will determine those differ-ences. Van Hessen is expert in looking at the long term, with its perspective on raw material and an estimation of their worth.I'm positive about the future. I'm not afraid of competition from artificial casings and collagen. You can't beat sausage in a real casing. You see many more natural casings in the supermarket than you did a few years ago. People want quality, despite the crisis. And the sausage culture is only moderate here in the Netherlands. I can never leave Germany without bringing home sausage for my daughters. Forty per cent of the quality and taste of knackwurst comes from the 'snap' of the sheep casing. Pure psychology. Soggy sausages wrapped in a soft sprayed collagen affair are forbidden in my house. In the canteens of Van Hessen and CTH you get sausage with natural casing. Of course you do! Real sausage has been stuffed in natural casings for centuries and will be for centuries to come. Mark my words.

StaffThe recruiting and training of staff comes in waves, because of the economy. We have young Poles and Hungarians on the payroll. They bring their girlfriends with them, get married and settle here. These are serious-minded, first-class workers with a strong work ethic. In China the work ethic

sPeCiAlized exPertise is An ABsolute Must

113

has changed. There the new generation, from the days of the one-child policy, has been raised differently. They have no brothers and sisters to compete with for a position. They're spoilt and leave at the drop of a hat. The Chinese authorities

have noticed this and changed their policy, unofficially. Anyone able to prove that he has enough capital to raise more than one child is allowed two.

It's hard to imagine what this might mean for the future.Next year we are to present a plan for 2020. What will we be doing then? What will be happening in the market? With the competition? In the world? We are studying trends together with top researchers. The world population is increasing by a million a day! Fascinating. And of course the amount consumed worldwide is increasing with it; everyone needs proteins. How are we to feed all those mouths? What can we contribute? It's key to have your quality assurance and environmental issues well organized in the future. The direction you take is becoming more important. You need to be flexible and reset your sails when the wind is against you. We are constantly engaged on developing a long-term perspective for the firm while guiding it in the short term. Just like Van Hessen is doing. Perhaps this is why our companies are so well connected.

reAl sAusAGe HAs Been stuFFed in nAturAl CAsinGs For Centuries And Will Be For Centuries to CoMe

:disappointments are the

pillars of success, but

failure is not an option


:i believe in clichés

:it's not difficult to phil-

osophize about the company's

future. there will always be

a casing industry, despite

crises, livestock epidemics,

closed national borders and

wars, as long as it

keeps adapting to future and

changing circumstances

sCottisH sHeeP, soMeWHere in tHe Hills

:without our scientific report

(the leg of lamb protocol)

the sheep casing industry

would have folded. it was a

fight for survival

-

-

-

-

-

- There are not many areas left

in Europe where you still find traditional

shepherding. For his photo report Michel flew

to Glasgow and then in a little old plane to

Stornoway on the Isle of Lewis in the Hebrides,

the island chain off the northwest coast of

Scotland. His destination was Ardvourlie (Aird

a' Mhulaidh) on the Isle of Harris, Lewis's

southern neighbour. There he stayed with Iain,

the sister of the nephew of Angus Campbell.

Angus would initiate him during the course

of two weeks into the secrets of traditional

shepherding.

-

- On Lewis, the sheep graze freely

on the hillsides; shepherding there is not an

arduous, daily occupation. The shepherds all

have another profession; Angus is a carpenter.

Herding sheep on Lewis is a time-honoured

activity, but not in the way that the Dutch know

it. A shepherd moves his sheep from pasture to

pasture, while his dogs keep the flock together.

Angus's sheep live scattered across the expanse

of desolate landscape. This area is often

inaccessible and seldom frequented by people.

It requires a good physical condition and plenty

of stamina.

- The shepherds on Lewis each have

their own flock out on the hills although they

work together as a team: it takes six shepherds

to gather a flock. Four times a year Angus,

his colleagues and their dogs drive the sheep

together to take them down. First they discuss

their strategy and how they are to proceed

through the landscape in a line to move the flock

forward. Once in a fenced-off area the sheep are

shorn (once a year, in July), inseminated or

selected for the slaughterhouse. Mutton commands

some € 7.50 a kilo; a sheep is worth between €

150 and € 200. The profit from the wool varies;

in 2012 this was about € 1.85 per sheep. Angus

and his friends do the shearing together in a

kind of non-financial partnership. They celebrate

a job well done together with beer, whisky and/

or a meal at the house of the shepherd whose

flock they delivered.

-

- The men hire themselves out to large

landowners or 'sheep kings'. Some of these

have flocks of as many as five hundred animals.

When these need shearing, a commercial company

is called in with electrical equipment and a

generator. But even these hundreds of sheep are

brought down from the hills by men like Angus

and his pals, in exchange for a gift voucher

worth about € 60. Now that's what you call

dedication!

-

-

120

157

PArt 3

on trAinees And trends

:westerners make politics

based on what is happening

today. the chinese think in

different units of time. on

the subject of taiwan, they

say that they want to be

reunited in 2060 and negoti-

ations are to begin in 2020


Harma Eilander studied Veterinary Medicine before spending two years at Van Hessen as a trainee. It then transpired that the last three months of her traineeship would be spent in China. She remained in that country for five years, where she was responsible for production. In July 2012 she returned to the Netherlands, ready for a new challenge: ensuring product quality in Europe.Alexander van Hessen (Lex's nephew) spent over one and a half years as a trainee travelling the world on a 'crash course' in casings for Van Hessen. In July 2011 he moved into the purchasing department. Some months later he was made responsible for developing purchasing activities in the Middle East.Harma and Alexander exchange ideas on their experiences.

| H China was a fantastic experience; I wouldn't have missed that for the world. It was particularly amazing to work at

trAinees Are tHe Future

:check, check and double

check. never take anything

for granted

161

the heart of the company: all trade is done by way of China. In my new post I'm trying to bring together the people on the work floor and in administration. The terminology can be a problem at times.| A Harma supports me in purchasing. We try to improve the quality together. I have to deal with China myself so I can learn a lot from her. She has experience of that culture, and knows the best way for me to present my message. Next week she's accompanying me to Egypt. Now and again I show photos of Egypt to friends. They work in banks and at solicitors' offices and know nothing about my work in that region. I myself am scarcely aware of what I've already seen of the world and everything I've experienced.

development in the middle east| A There are two questions we need to ask with regard to Van Hessen in the Middle East: how will the region develop in the sheep casing sector? And how is Van Hessen going to develop there? Both are difficult to answer. There are many variables to consider. Casings are a by-product of the slaughter. The demand for meat determines whether they kill a hundred sheep in Kuwait or a few million and

therefore how many casings there will be. There are still many small companies in the Middle East operating along unprofessional lines.

I don't think they're ready quite yet for the kind of scaling-up we've had in Europe. But I haven't been in this market for long; I'm concentrating on purchasing sheep casings and not so much yet on such aspects as scaling-up and acquisition possibilities. My goal is to achieve 100% growth annually in the Middle East. It's ambitious but it's realistic. Guts & Glory!

We're a world player in sheep casings, yet we've scarcely been active at all in this region. It has another culture for doing business. Van Hessen works with procedures and seeks to achieve certainty; we want to make long-term agreements so as to guarantee the quality of the supplied product and, in time, to improve it. But in the Middle East you buy a container and conduct your business quickly to left or to right, always in the short term. We are looking for a combination of going with the short-term trading and then trying to impress on them that our system has greater advantages and get them to do things our way. In the end it all boils down to money. The challenge is to convince them that in the long run they can get more money out of casings by doing it our way.

blueprint for the future| H It's getting more and more important to safeguard quality. Customers and consumers are making ever greater demands. We want to and must reach a certain level. Securing long-term relationships with suppliers allows us to work on improving the product, gives us greater profits from our raw material and means we can pay the suppliers more. Our strategy is to buy direct from slaughterhouses and get our people to work there, with our machines. That will give us control over the production process and we can safeguard quality from the slaughter onwards. That is our blueprint for the future. It's relatively new in Europe but in the US it's quite normal to enter into a contract for five years and provide your own people and machines. Our goal is to secure more of such contracts.Quality improvement relates not just to the raw material but also to the processing. Good hygiene and monitored processing procedures are essential for a qualitatively uniform, high-grade product. In many regions intermediaries buy the raw material at

| harma eilander & alexander van hessen : trainees are the future

MAYBe tHere's one intelliGent reMArk AMonG tHose seeMinGlY stuPid Questions


the slaughterhouse. They supply them to small cleaning companies which then sell the goods on elsewhere. We try to cut out these links and do everything ourselves. That is the

best guarantee that all goods satisfy our high sales standard.| A If you've got control over the entire chain, you can ensure maximum quality at every link. In the

Middle East we know where the sheep come from, where they were slaughtered and where the casings were cleaned and selected – they're tightening up on requirements there as well. Egypt was out of bounds for a year because it failed to meet EU demands. No casings arrive in Europe without a certificate. The first thing I do is check that the papers are in order, to see whether Europe will actually allow those casings in. Only then do I examine the quality of the goods themselves.| H Every company we work with is EU approved. We have our own track and trace system. We can trace every casing back to its supplier with a certificate. This way we can guarantee food safety.

politics| H It's easy for politicians to say we're putting a ban on the import of animal products from a particular country, then we're not taking any food safety risks. So if in some country an animal disease breaks out or if there's some other threat to meat safety, the borders often get closed and all meat related transportation is prohibited. Afterwards it's difficult getting the trade up and running again. Because of scrapie, the sheep disease, we have to throw away the last metre of every gut, even today. There's no justification for it. Aided by

professional consultants and research by reputable institutes we have demonstrated scientifically on more than one occasion that all hazardous tissue is removed by cleaning. An additional metre per gut – yearly it adds up to vast numbers and vast sums of money!It's the small intestine that interests us, both for sheep and for hogs. A sheep's gut is some thirty metres long, that of a hog twenty metres. Their intestines work differently: a sheep digests its food in its stomach, a hog principally in the large intestine. This is what gives a hog casing a wider diameter of 28-50 mm. A sheep casing has a cross-section of 14-28 mm. The veining and wall thickness differ as well. These properties determine the type of sausage you make. The contents of a sausage roll (saucijsje) are stuffed in a hog casing, a knackwurst in a sheep casing.

Working together| H In the long term, working together is the future, also for suppliers and customers. This trend will continue to develop in Europe. Large slaughterhouses are reducing the number of factories and our customers are expanding. Scaling-up is in our favour, in view of the fact that a small casing company can't guarantee its customers a constant supply of products. Seasons also affect what can and can't be done. Our factory in China works to an annual plan, which is fairly unique for a casing company. The slaughter-ing season for sheep in Europe is September and October. Sales reach their highest point in May and June. So for a constant production you need good planning and the right stock at the right time. That's what we do and we're able to do it because we buy and sell worldwide. On the one hand you want as little stock as possible but on the other you need to be a reliable supplier who can deliver the right product at the right time. Van Hessen is unique in this respect.If our customers expect us to be able to supply them at

iF our CustoMers exPeCt us to Be ABle to suPPlY tHeM At All tiMes, We Are AlloWed to exPeCt tHeM to BuY FroM us At All tiMes

163 | harma eilander & alexander van hessen : trainees are the future

all times, we are allowed to expect them to buy from us at all times. That's partnership. One of the challenges of our industry is that you're working with a natural product. You may be able to sell nine out of ten products, but you have to get rid of the rest as well. A 10% profit margin is fine, but if you only sell 90% of your goods, you still haven't earned anything.| A We already have customers for the lion's share of the casings we purchase. We know which customer would be most suitable for each and every part of a casing.

trainees| A As a trainee, I once asked why Van Hessen wasn't doing anything in India. It had considered it at one time and not taken it up, but my question had brought up the subject again. The disadvantage of being a trainee is that you have to learn a lot but the advantage is that it can open new doors – maybe there's one intelligent remark among all those seemingly stupid questions.| H Traineeship is in fact one long job interview. You can only judge this work by doing it. You're constantly being tested on your knowledge and have to turn in a report every week. This is not just because you have to learn to report but because this way you assemble a dossier that shows what you have and haven't picked up. Trainees have to learn to look around them and quickly absorb all the points of interest. Ultimately you must be able to write in half an hour a full report that would have taken you three weeks when you started training. | A At the beginning I used to sit and stare at a form for hours looking for errors; after a while I began noticing these things immediately. No idea how it works, it just happens.| H Every traineeship is different. It all depends on where you begin and in which season. You learn about raw material, make purchases from suppliers. Then you go to China for

a time and during the first year it becomes clear whether you're commercial or operational material. In the second year, there's a programme to get you ready for what is to be your post in the company. In the last three months of my traineeship the only training I got in China was what I needed for the position I was to hold. So it was a specific training programme compatible with my personality and future post.| A The management wants to see whether the product comes alive for you. Some trainees pull out after a few months. They wonder what on earth they're doing with their hands in all that glorified spaghetti. Casings are often regarded as a waste product, and not a sexy business. My friends are either extremely interested or not at all. Almost no one realizes that there's so much to it, but some are amazed to see how we market this product. What's more, very few Dutch people know that that sausage is more than likely wrapped in a natural casing. Just where the food comes from is of little interest here, whereas every Australian knows how many lambs are slaughtered every year. Some friends are looking for a new job and wonder whether Van Hessen is something for them. Usually I can imagine how they'd react to our no-nonsense Rotterdam mentality.

:a company consists of

simple things. sales times

percentage gross margin

minus costs = result


Whatever the case: I can recommend a traineeship at Van Hessen to anyone.| H It works like a filter. The first two years are a lot more Spartan than they are at other companies. It gets better later. You learn a lot, not least about yourself.

Wishes for the future| A What would I like to improve on in my work this very week? The none too transparent communication in the Middle East. If I ask them to do a thing, they say it'll be arranged by the next time I visit. But when I return, nothing

has changed. You can't rely on them. They won't commit themselves. I'd love to be able to change that.Fluctuations in prices are another thing. It would help me if they

were a little more constant. Any more wishes? Oh yes! It would be fantastic if there were to be the same consolidation in the Middle East as in Europe. That would give me a better picture of the purchasing possibilities and I could point out the advantages of working with Van Hessen.| H My wish list is long, but that's because I've just arrived back in the Netherlands. Knowledge of casings is a very specialist field. Many people at Van Hessen have plenty of experience and knowledge but are too busy with their job to take the time to effectively transfer this knowledge. A lot of information is lost because of this. Van Hessen has been working on quality improvement for 110 years. It's achieved a lot, but there's still enough to do. We need someone who will be engaged exclusively on improving the quality of casings, leaving aside all the processes. At the end of the day, it's quality that's making our money for us.

differences in culture| A The Middle East has an open culture. I was introduced straight off to my business associate's family. Come in! Stay for dinner! They take up all your time. It's exhausting, but great fun. Every day a fun day. That made me aware that we Dutch are much more stand-offish. I've already lodged for two weeks on two occasions with a business associate instead of at a hotel. And why not? Then you really are immersed in their culture, taking everything in. I found it a fantastic experience. It does mean working long and often, but then you're right in there and it's easier to build up good relations.| H What will I miss the most? In China they all eat together at a round table. These relations and social activities are extremely important in China, just as they are in the Middle East.

trAineesHiP is in FACt one lonG joB interVieW

165 | harma eilander & alexander van hessen : trainees are the future

:strive for perfection,

always be the perfect

partner and colleague

:i've evaluated all transac-

tions – including the most

successful ones. what could

we have done even better,

for when that situation

arises again?


Farid Tabarki is Trendwatcher of the Year 2012, but prefers to call himself a Zeitgeist researcher. His company, Studio Zeitgeist, has been in operation since the year 2000. He conducts research projects for companies and organiza-tions, acts as day chair, delivers lectures and organizes presentations. What really distinguishes Farid however is that he seeks to contribute to creating that Zeitgeist through television broadcasts and new concepts for companies.Here he informs Elliot that Generation X prefers attention to money, explains why Istanbul would be a first-rate place for the head office, and that in twenty years' time Van Hessen might well be a leading pharmaceutical company.

For most people trendwatching is about what the new colour black looks like. This is useful for companies that work with packaging, such as Unilever or Tetrapak. Zeitgeist is broader. Developments in the community determine how consumers,

2027: VAn Hessen PHArMACeutiCAls ls istAnBul

:we have set our sights very

high. that's the way it

should be in business

culture

169

employees and business people behave. I'm not interested in technological trends but in the way technology changes our behaviour.People in the prosperous West are beginning to turn away

from technology and get back to artisanal quality. That's more important to them than the price tag. We live in a revolutionary age. Every individual

is in a position to shape their own life. We can even generate energy, decide our place of work, make products using 3-D printers and Airbnb.com makes us all hotel-keepers. Western society is in a transitional phase but most people still have to feel this power they possess. Current develop-ments creep them out; they lack a sense of being in charge of their lives. Again, food has made fascinating advances in the past fifteen years. How many steps were there between buying foodstuffs from the farmer at the market and the pre-chopped, pre-packed portions of beans in the supermar-ket? People want to get their power back. They can't get all of it back because of globalization but whatever control they are able to exercise, they will exercise. Anything they themselves still have under control has to be really good. Food is an easy place to start: people want products with quality, a long life, taste, texture. Products made with care, preferably from their own area and readily identifiable. Albert Heijn is already going along with it; in Limburg Province the supermarket chain is carrying out marketing campaigns specifically for Limburg products.When we have no further say about how we live our lives, we get depressed. This development on the food front acts as an anti-depressant, a healthy way of regaining a sense of being in charge. If a product impacts on us at this depth, we

care less about how much it costs. We always manage to afford to invest in ourselves.There are two developments taking place in parallel. On the one hand, you have quality and craft. Sausage is a phenom-enon of localization. Each food culture includes sausage but everywhere it's differently made. If anything is produced locally and traditionally, it's sausage. This is a key strength of the product and this aspect will figure even more in the future. I predict an increasing role for local products.On the other hand, there are more people who can afford to buy and eat meat. They think a slab of it on their plate is the last word and it doesn't matter how it gets there. In countries where prosperity is on the increase, the growing middle class is beginning to embrace Western traditional craft values. My father's family comes from Tunisia. Meat is a status symbol there. Anyone who manages to eat meat three times a week belongs to the middle class. Arguments such as craft and tradition then have nothing to do with it.

| E Westerners have achieved great prosperity, hit satur-ation point and then turned to dieting – just proteins, for example. Our customers are following this up. Then there is the local-for-local strategy: I come from Nuremberg so I eat Nuremberg bratwurst; I live in Parma so I eat Parma ham. Will the rising economies be saturated too in ten years' time?

Ten years isn't long and this development has only just begun. In three years' time the range of products in the supermarket won't be the same all year round but will change with the seasons, as it used to.The way technology is changing our behaviour has a lot to do with radical transparency. These days we know a great deal about products. We want to know where something comes from and how it's made. This transparency is one of

| farid tabarki : 2027: van hessen pharmaceuticals ls, istanbul

i PrediCt An inCreAsinG role For loCAl ProduCts

0170 | gut feeling. A future in trAdition | 110 YeArs of guts And glorY At VAn Hessen| johanna fink-gremmels : traditie is een sleutelwoord

:our company combines the

charm of a small multi-

national with that of a

family firm

171 | farid tabarki : 2027: van hessen pharmaceuticals ls, istanbul

Van Hessen's strong sides. Honest, a UK clothing company, makes sustainable, expensive jeans. Each pair has a label with a photograph of the worker in India who made the garment. These pants are popular among twenty-somethings, not just because of the ecolabel but because an individual is responsible for it. Van Hessen could use something like that as a strength. Latch onto added values, now that consumers want to know what ingredients are used and where the sausage comes from. These values add soul. This situation will still be with us in ten years' time.

| E It's no easy matter attracting young talent and hanging on to it. The youngsters of Generation X have the impression – and rightly so – that everything will fall into their laps. What should Van Hessen say to draw them in and hold them there?

The struggle for talent is affecting every serious employer in this country. Employers could tell the Babyboomers: 'I'll pay you well and a little more each year to a fixed scale.' The Babyboomers then meekly set to work, they were provided for and they stood by their company. Today's youngsters are less driven by money; they consider the choices open to them and other values more important. Work is no longer everything. You might say that this new generation is spoilt, but also that these youngsters want to get more out of life. They are motivated and the employer who knows how to handle them properly can profit from this motivation. It's the best educated generation so far. But in a company where the boss says: 'I'm paying you good money, so why the long face?' the working atmosphere leaves a lot to be desired. You could interpret 'spoilt' as meaning that they're used to anything being possible.

| E So what's the right way to win them over and how do I get the best out of them?

By giving them responsibility and basing your procedures around this. Modern leaders define leadership less as handing out tasks and more as establishing goals: 'These are the parameters and this is what we want to achieve. It's up to you and your team to find the best way of getting there.' There are times when the staff can decide those goals themselves, within the larger framework devised by the board of directors. Give them the right tools and your staff will go about things quite differently. Do they need new skills? Be prepared to invest in training programmes.The second condition – and this is why I'm so taken by the birthday calendar in your canteen – is that you see them not just as employees but as people. Give their private lives a place in the organization. We've long regarded mixing work and private life as a threat but in these times this is where the opportunities are. Particularly in a family firm – Van Hessen has other motivational values on its radar.

| E You mention soft values that employers have to keep in mind for staff bonding. Bonding is important for Van Hessen, since we want to be continually developing in our dynamic line of business. Yet every time someone in a key post leaves, we have to start all over again. A pot of money for those who stick it out is a hard value. Would something like this work in the future?

It depends how you define the pot of money. Investing in teams so that they can do the work in their own way and just go for it costs money too. In that sense it's a soft value. The increasing prosperity is making feminine values more important. Mobilizing funds for feminine matters is a hard


value. MTV was one of the first companies to feel the disloy-alty of today's twenty- and thirty-year-olds. The director felt that teaching new people the ropes every three years was capital destruction. He decided to invest more in people in key positions, taking them under his wing, sharing certain knowledge with them and in this way forging a different bond, through coaching. You need this kind of leadership these days if you want to survive. You don't need to be soft. It's part of Van Hessen culture to speak your mind. Keep doing it, and above all be masculine about it. Unfortu-nately the Dutch underestimate DSM and ASML and other excellers in trade and industry – including Van Hessen. I get a warm feeling from Dutch firms like Van Hessen. With your talent and traditional skills you want people to associate you with companies that have just one slogan: quality is our business. Many companies have this to say but in Van Hessen's case you know it's true. Young people are attracted to this mentality; they really do want to make good products. They are over-emancipated, know exactly who they are and what they want to get out of their work. They want their own niche in the organization. The remarkable thing is they're so reflective about it compared with the Babyboomers.

| E When I arrived here fifteen years ago, I was a spoilt kid from a good family from The Hague, and as green as they come. My first contact with the rough-and-tumble world of casings came as a culture shock, but I was given the opportunity to find my own way in it. It was both slow going and challenging. You just mentioned the reason I stayed; I was given the freedom to take responsibility. 'Here's some money, go on, learn things, show what you can do!' It still works that way. Everybody here goes through their own huge personal development. At university they don't teach you to tell each other the truth and then carry on as if nothing had

happened. Not everyone can handle that. People with ambition find their true selves here.

The new generation of twenty- and thirty-year-olds refuses to be sold short. They want attention! You need more than money or a passing compliment to motivate top talent. This changes the style of leadership.

| E Fair enough, but employees should in turn pay attention to their employer. After two years many youngsters says it's time to move on and do something else. But then they're really not that good yet. And we keep coming with the ideas! We devise rotation systems so that they can change departments but this means that no one gets really proficient at anything specific. The young have little in the way of concen-trated attention for what they're doing.

You want to keep the core quality and not hold a raffle every two years. Young people come here to work because they want to be among the best players. But they also want to experience momentum and development, which causes them to lose focus. You have to make sure that they become proficient in a dynamic environment, that they can go with that flow but also that they specialize. Agree to devote some of your time to facilitating that dynamic, on the understanding that you get something in return.

| E But what will happen to these people then? They can't change employer ten times in twenty years, can they?

You see serious burnout among those in their late twenties and early thirties. They're overambitious, not genuinely good at anything, and burnout is the result. Anyone who is really good at something keeps focused but a nondescript worker


has a hard time of it. It's a pampered generation but also an unlucky one. I can predict the quitters becoming medical cases. Many young thirty-somethings, particularly women, take on too much and suffer the consequences. They pull the wool over each other's eyes and get no protection from employers who give them the perfect conditions to work in.

| E Will all this unrest wear off?

It will, but the current radical transformation is making us all jittery. What can we bank on? What are the values? We're driving each other nuts and regrettably we haven't peaked yet. In about eight years' time the models will be more transparent. Then politics will be repackaged, employers will have a better idea of how to handle the new generation, and there will be better examples. It costs time to acquire a nose for developments and systems. The New World of Work, where the workplaces aren't fixed, isn't always fun. The

Eneco sustain-able energy company takes this to an extreme in Rotterdam: even the CEO's don't have their own workplace. Most interest-ing, but in five

years' time it will probably have been reversed, in view of the fact that some people are downright miserable without their own office complete with a picture of the kids. They'll quit. You have to strike a happy medium. Eneco didn't do this and in these radical times that means everybody this way, all the way. Typically Dutch. I like it, but you have to realize that generally you end up in the middle. Elsewhere they see it

as pioneering what those crazy Dutch are up to but we get mildly hysterical about it too.

| E Is there any point in looking ahead to what will be happening in ten, twenty years' time?

It's useful to look further ahead than five years, because if you're able to see different developments side by side, sometimes the penny drops: So that's the way it is... There are many things you do by instinct, because they belong to your culture. Then you don't need rational research reports. It's a good idea to take a step backwards now and again and see how your actions fit into a bigger picture. It strength-ens you in your decision-making and makes it easier to get people to back you. The board of directors may know the reason for the chosen course but the whole company needs to go the same way. Most of the staff feel the need to be carried along, so that they can understand decisions in terms of global developments. Involve them, not to justify the policy, but out of intellectual respect and because you want them involved. You can use future analyses, you can do it individu-ally or in a group – there are various methods. This strikes me as not just sensible but crucial.

tHe neW GenerAtion oF tWentY- And tHirtY-YeAr-olds reFuses to Be sold sHort. tHeY WAnt Attention! You need More tHAn MoneY or A PAssinG CoMPliMent to MotiVAte toP tAlent

:i have paradoxical ideas,

such as: people can only

achieve if they feel

comfortable outside their

comfort zone


| E Rubber products manufacturer Nokia turned to telephones and is now on the verge of bankrupt-cy. Nestlé says that in 2020 it will have stopped producing food and become a wellness company. Such intentions can fully materialize or they can go horribly wrong.

Van Hessen is actually a very basic company. I don't expect this to change in the next ten years, but I do see opportunities outside the food industry. Our pharmaceutical branch is gradually making headway. Should we be reinventing our company?

Dutch tomato growers grow tomatoes, but earn their living from producing energy. The tomato is waste that they sell at a loss. Steve Jobs is still my favourite example when it comes to innovation. He made what he himself wanted to have and as a result everyone wanted it. I find it an attractive way of

working: follow your own gut feeling. Our prosperity and focus on health have brought about a huge revolu-tion in the pharma-ceutical industry.

Scientists are making spectacular discoveries. Right now big players still have the leading role, but in the future there will be more space for another approach. If Van Hessen acquires the know-how, there's nothing random about developing as a pharmaceutical company since your product is so intrinsically bound up with pharmaceutical chemicals.

| E Our future is in linking the modern age with tradition.

It's great that people are getting to appreciate tradition more and more. In postmodernism we were temporarily discon-

nected from everything. In today's post-postmodern age we are rethinking who we are and what our role is. Identity and regionalism will play a more significant part – I see no other way of dealing with globalization.

| E Vegetarians claim on the strength of their own research that eating meat is bad for humans and animals, yet there are plenty of scientific studies that show how healthy it is. Everyone has their own store of knowledge; you can prove anything either way. Whatever the case, meat is the food of prosperity. How do you see meat consumption in the Netherlands developing?

The quality of food is improving. We make demands and know the effects that food has on our health. I think the impact of what the scientists say is weighing heavier. Know-how is getting more and more important in the consumer pattern, but eating meat will never go the way of smoking. Everyone smoked twenty years ago – now smoking is for losers. I disagree with those who say that this will happen to meat, although something like steak might go that way. Think about all those cows flown in from Argentina... That's why I brought up sausage as a traditional regional phenomenon. Sausage is not just a food product, it's a recipe. Thanks to rising quality requirements, that sausage recipe from that provincial town is an attractive proposition.

| E How do you see Europe being divided up?

I believe we are going to have a Europe of regions, a radical decentralization. We will strengthen our cultural and political society at the regional level. Municipalities and regions will have more power, companies will take to operating at the regional level.

identitY And reGionAlisM Will PlAY A More siGniFiCAnt PArt – i see no otHer WAY oF deAlinG WitH GloBAlizAtion


On the one hand national government will hand over executive duties to local authorities, on the other hand Brussels will become more powerful. This will leave in the middle some kind of nation state, one with no sovereignty. There'll only be sovereignty left at the European level, as distinct from the superpowers. European sovereignty may be the only aspect left for us to define.

| E What will be the role of the banks?

I just love all the business models in this fascinating age! Pension funds and individuals who combine monetary forces are the new creditors. In ten years' time banks will have completely lost their monopoly on providing credit. A bank's big advantage is its bond with the client through its legal and financial know-how. Banks will become real estate agents, advice centres.

| E But then how will trade and industry be financed?

In the building sector, they are already developing new models with other financial constructs and other lenders: pension funds, local governments, participating companies outside the sector. Players that are not part of the core process but benefit the team. Hybrid, casual constructs. Networks and trust (in the human sense) will figure more prominently. Banks as credit providers were a paper reality, based on paper trust. The new system makes it more honest,

but more difficult for a company that doesn't have an aura of value. A company must be enterprising in how it makes its money.

| E Fiscal legislation could make it attractive to establish a head office elsewhere. South Africa, Brazil, Shanghai, Hong Kong, Zurich?

Interesting, and complicated. If you provide top quality, it's difficult to take this step because quality is partly a cultural phenomenon. Think of Switzerland and you think of quality, but then within Swiss culture.There is value in the quality of your company. Nor is it just about the product. In the Netherlands Van Hessen has proved its worth for a century and a decade. You can call this long or short but just try prolonging it in Zurich. This obtains even more in foreign cultures and other dimensions such as South America or Asia.If it's about a second base nearer home, I think Istanbul would be a good option. There you have economic growth, demographic development, culture, means of connecting. In Turkey, all the signals are on green.

iF VAn Hessen ACQuires tHe knoW-HoW, tHere's notHinG rAndoM ABout deVeloPinG As A PHArMACeutiCAl CoMPAnY sinCe Your ProduCt is so intrinsiCAllY Bound uP WitH PHArMACeutiCAl CHeMiCAls

:the current generation x gets

everything on a plate, but

even in that generation there

are people with ambition and

drive. it's these we need to

pick out

:mad cow disease has cost

hundreds of millions of

euros, although maybe eight

people were infected with

creutzfeldt–jakob disease,

two of whom were vegetarians.

the problem wasn't mad cow

disease, but politics

:my mission was to see that

our company kept going after

i left, after the third

generation

workmanship

safety

reliability

thoroughness

innovation

sense of belonging

openness

ambition

customer-driven

attention

science

honesty

perspective

competent

training

service

ambience

cost awareness

growth

efficiency

wilfulness

sausage

scale

success

quality

continuity

tenacity

authenticity

community

focus

family

bonding

spirit

loyalty

expertise

independence

research

appeal

superiority

enterprise

talent

food safety

partner

improvement

health

added value

freedom

technology

development

110 years

van hessen

| gut feeling. A future in trAdition

credits Gut Feeling is published on the occasion of the 110th anniversary of van hessen bv.

Text, editing and production – Jan daan hillen, tekstschrijver

Translation – John kirkpatrick

Book design – kaire guthan, dependance rotterdamPhotography

| China and Scotland series – michel szulc krzyzanowski

| Other photos – paul huf, aleksander willemse, Jan nass, bert van dijk and others

Printed by – de swart

Print run – 3000 english, 1000 dutch

no part of this publication may be reproduced or made public in any form or by any means without the permission in writing of van hessen bv.

ISBN 978-90-9027191-0

van hessen bvp.o. box 2202910 ae nieuwerkerk aan den iJsselnetherlandswww.vanhessen.com

november 2012

4

:in ten yeArs' time i will hAve

no further connections with

the compAny. it will then be

celebrAting its first 120 yeArs.

i'll get An invitAtion And when

i Arrive, i'll see thAt the

compAny still hAs the culture of

lex vAn hessen And the integrity

of pAul vAn hessen

110 years of guts and glory at van hessen

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