“Don’t be afraid to make mistakes because if you play everything safe, nothing happens.”
These are the words of Pim Vervaat, chief executive of RPC Group, a leading plastic product design and engineering company which offers a range of consumer products and technical components for the packaging and non-packaging markets. Since Vervaat took over (he initially joined as finance director nine years ago), shares are up nearly 300 per cent. And, according to Panmure Gordon’s senior market commentator David Buik, RPC isn’t a million miles away from joining the FTSE 100.
Known for his commitment to organic growth built on innovation and a successful track record of acquisitions, Vervaat also has a reputation for being respected by his staff. When he spoke to Buik and Panmure Gordon’s chief economist, Simon French, he explained his management technique.
“It’s never I, it’s we. Teamwork is very important. And you have to be proactive.”
He adds: “I always say that as long as I’m CEO at RPC there will not be a commercial or technical director at group level. Because of the diversity [at RPC], he or she would just not know enough about the competitive dynamics and the technical details of all the different end markets that we operate in…We have to be nimble and fleet of foot.”
Operating from 112 manufacturing sites in 28 countries, RPC has made half a dozen acquisitions in recent years. It’s safe to say that the firm is relentless in its quest to create a company of excellence in design, manufacture and the distribution of plastic receptacles. So, what does the future hold in terms of acquisitions?
“I think more of the same hopefully,” says Vervaat. “It’s always difficult to predict but we are operating in a European market which is consolidating. Our market share in the richer plastic packaging side of things is 5 per cent, in polythene films it’s also less than 5 per cent. Worldwide it is less than 1 per cent. So, driven by multinational customers and driven by a generation change in the plastics industry, this consolidation game in Europe is going to continue. We try to be very selective at RPC…what we’re looking for is where we can add value.”
He adds: “It’s not a big homogenous industry, you’ve got a multitude of markets, a multitude of technologies. Like fund managers pick stocks, we try to pick those segments where our skills really come to fruition.”
Sticking to his ambition to forge new ground, Vervaat has overseen a move into flexible plastics, even though the business was originally built on rigid plastics. Like any courageous business decisions, there are risks involved. However, Vervaat is convinced the company is well-placed to make bold moves.
“One of the things people say to us, are you not going off piste, are you not stretching the management too much? But when buying a quality company we have a great track record of retaining the quality management and we plug them into the RPC Group. We say, we can give you access to capital, access to buying advantages, some best practice, some customer contact. You were good before you went into RPC, hopefully we can give you things that means you can be better thereafter.”
With more than 1,000 patents across the business, under Vervaat’s leadership the company operates decentralised structures with strong management teams focusing on their respective sectors. At the worst points of the global financial crisis, RPC stuck to its guns and, according to Vervaat, continued “to push the boundaries on engineering and push the boundaries on product designs because that is the lifeblood of the business. If you start to run for cash then I think you can become just that, a cash cow.”
And does Vervaat have any words of advice for those coming up the ranks?
“Take initiative. We talked about the entrepreneurial attitude in RPC which means we are in an environment where, if you take initiative in product development or whatever it is, you’re not being cut down. Don’t be afraid to make mistakes, then you’ll do well.”