Since Paul van Zuydam took over the casserole-making company Le Creuset things have been hotting up in a small town in northern France.
"I suppose," hazards Paul van Zuydam, enunciating clearly, "that there's a little flaw in the glaze." The quality inspector looks troubled, fingers the reject item under van Zuydam's scrutiny and then beams, "Mais non, monsieur, il y a bien un petit defaut dans le glacage." "What did he say?" "He says there's a little flaw in the glaze," mouths van Zuydam's PA. "Oh," Van Zuydam turns unperturbed from the assembly line, "I must say, I've never worked with a better bunch of people in my life. I have to be frank, this may have something to do with the fact that they can't understand a word I say."
The world of business in a more-or-less unified Europe is certainly a strange place. Still, the nascent single market has certainly given new life to an old adage: when money talks, it does not need an interpreter. In 1987, the South African van Zuydam - then chairman of Prestige, the British cookware group - suggested to his board that they acquire that most Gallic of French cookware manufacturers, the Somme-based Le Creuset. After a year of indecision on Prestige's part, van Zuydam decided to buy the ailing firm for himself and to leave Prestige. He floated the company on the London Unlisted Securities Market the following year.
Last May, in the face of a recession, Le Creuset dished up a 5% rise on profits (to £3.3 million), on a turnover up from £32.3 million to £33.9 million. It was, in anybody's language, an impressive performance.
A trip around Le Creuset's main factory at Fresnoy-le-Grand reveals much about how this was achieved. Until earlier this year, the company's cookware production was dotted around several sites in France, while its bottle-opener manufacturing subsidiary, Screwpull (acquired for a bargain $6.5 million in 1991), operated out of its home town of Houston, Texas.
In a deft geographic reshuffle of this pack, Le Creuset's sites have been reduced to two (Screwpull's gadgets are now produced in France), with an anticipated further shuffle intended to produce a single, all-purpose "production island" in the next three years. The (non-taxable) benefits to the corporate bottom line of the sale of these redundant sites need hardly be stressed. At the same time, this rationalisation has been matched by a new emphasis on corporate self-sufficiency. When van Zuydam acquired the firm, 60% of its production was contracted out. Now, after investing FF25-million in foundry equipment, and with its newly-centralised production lines, 100% of the company's cast-iron goods are made in-house.
These are not the only instances of van Zuydam's classic, business school stealth. Even if Le Creuset's shopfloor still looks antiquated - soot-faced workers hammer at molten casseroles - it is, in fact, as automated as castiron technology will allow, and considerably more so than it was under the firm's previous regime.
The factory is, needless to say, much less heavily manned as a result, a situation that is probably appreciated more by City analysts than by the under-employed populace of Fresnoy-le-Grand. A large part of van Zuydam's admirable success has stemmed from a company-wide 10% staff reduction. Faced with this prospect, workers at Le Creuset staged a one-day strike in 1987, while the French government, according to van Zuydam, tried to foist "unrealistic manning levels" on the firm's new owners. His curt (and effective) defiance of these disruptions suggests that van Zuydam and his cast-iron product may have certain textural qualities in common.
Still, things could have been worst under a less fastidious manufacturer. Van Zuydam reasons, entirely plausibly, that the continued success of his core product rests, to a large extent, on its perceived high quality, which rests in turn on an exacting approach to quality control. As enamelling is an inexact art, this means a final reject rate of somewhere around 25% of finished products. Even if one of the beauties of Le Creuset's production process is the fact that rejected cookware can simply be popped back into the furnace (van Zuydam proudly claims a nil materials wastage as a result) the expense in terms of man-hours, and the workers to cover them, is heavy. "Someone may take over from me one day and say I've been crazy," van Zuydam reflects, but there is obvious method in his madness. The cost of employing a slightly larger workforce than might seem feasible is more than offset by the prospect of the likely sales loss that would follow any perceived fall-off in the quality of Le Creuset's renowned products.
This sensitivity on van Zuydam's part to the necessity of "maintaining the heritage" of Le Creuset's traditional core product as "the Cartier of cookware" makes projected departures in the firm's overall sales strategy come as a surprise. Given the flexibility of his new production lines and a spare 10% plant capacity, van Zuydam could easily have sat down, defined his firm's core competence as "cast-iron manufacture" and set about making a complementary product safely discrete from his highly successful extant one. There would be, by his own admission, plenty of room for growth, both in terms of spreading the net in existing markets and tapping into what van Zuydam calls the "third leg" of his existing business (international sales, at present accounting for only as much turnover - £11 million - as the UK and French legs). Instead, in the words of Stephen Marfleet, Le Creuset's international division marketing director, van Zuydam's corporate strategy is to "maintain Le Creuset's heritage while seeing how far we can push out the boundaries". In practice, this has led to a recent proliferation of Le Creuset objets - the result of boardroom brainstorming sessions at Fresnoy.
Some of these products - such as casseroles with Vitrobase bottoms designed not to scratch glass-topped hobs (currently popular in Germany) - are clearly sensible. Others, such as a casserole with a dimpled lid made to hold ice cubes (the better, it seems, to steam with), seem like innovation for innovation's sake. Most bizarre of all in this latter category is the casserole d'amour, a heart-shaped pot invented by Marfleet himself and intended primarily as a publicity stunt. ("There were initially some doubters," recalls van Zuydam, cheerfully, "but Stephen convinced me that its PR value would cover any tooling costs.") Considering that the man who presented his wife with such an item as a romantic token would run the risk of being hit over the head with it by way of thanks, the attendant publicity might well have been undesirable. Both men point out, however, that the product has in the event proved popular in the Japanese market and claim they are pleased.
Nevertheless, the underlying belief at Fresnoy that the Le Creuset brand name is sufficiently strong to act as a launch pad for these coups de cuisine requires a leap of faith. In the past, the company has retained a second and discrete brand presence in the form of its Cousances range precisely so as not, in the words of van Zuyman, "to make Bloomingdale's mad" by supplying it with goods also supplied to the declasse hypermarket trade. Such sensitivities do not necessarily suggest that retailers will joyfully welcome woks and fondues simply because they have the words "Le Creuset" stamped on them. Moreover, licensing the production of oven mitts or ceramic and stainless steel cookware - all new departures - appears neither to possess even the slight synergistic logic of Marfleet's amatory casserole, nor to fulfil van Zuydam's wish that Le Creuset "controls its own destiny" by manufacturing all its products in-house.
Be all this as it may, van Zuydam's own guess is that his firm's "non-cast iron business will be bigger than its cast iron business within five years". Profits retained for reinvestment, currently running at some FF20 million a year, will cope with present plant expansion plans, and the "acquisition opportunities" Le Creuset's CE anticipates being produced by the present recession could easily be funded by a sympathetic City. Come 1998, things will certainly be different at Fresnoy, including, just possibly, Le Creuset's corporate nationality: "Being a French company suits our image now," reasons a sanguine van Zuydam, "but we could change our identity tomorrow."