Planning for Mammoet

Not long ago you could not get Frans van Seumeren, or any of his employees, to even speak the name Mammoet. Nor could Mammoet people utter the name Van Seumeren. Both companies would talk merely about ‘our competition’ or ‘our colleagues’ but it was always clear precisely who they meant.

Mammoet and Van Seumeren were more than just business competitors. The two Dutch companies, both among the very top four or five (or even three) heavylift companies in the world, were fierce rivals. It was big news, therefore, when it was announced on 22 May this year that Van Seumeren was buying Mammoet for E111m and merging the two companies.

Frans van Seumeren, president and chief executive of Van Seumeren, says that given the traditional feelings between the two companies, it was in Van Seumeren’s favour that Mammoet had been up for sale for so long. Mammoet employees had spent about a year knowing that their parent company, Royal Nedlloyd, no longer wanted them. Nedlloyd was returning to its core business of shipping.

“It was a good thing that Mammoet was up for sale for quite a while. People were glad to have a new home,” he says.

The name of the new company is not Van Seumeren, as one might have expected, but Mammoet. Van Seumeren Group becomes the name of the holding company, but Mammoet is the name that the lifting industry will see. It may be Van Seumeren Mammoet in some markets for a period of time, but in due course, simply Mammoet. Frans van Seumeren explained to Cranes Today at the time that this was because he felt Mammoet was the stronger brand and a better global name with a strong logo. Retaining the Mammoet name has the added advantage – one that he is well aware of – of making Mammoet employees feel more welcome in their new home and thus making integration easier.

The new Mammoet includes all the business interests of what used to be Van Seumeren Holland BV, which was previously the umbrella group for the lifting and transportation interests of the van Seumeren family.

Under the new structure, Van Seumeren Group is the holding company, and it is majority-owned by the van Seumeren family, with participation companies ABN-Amro and NPM Capital Holdings as joint shareholders.

Mammoet ‘new style’ includes: Mammoet, Kraanverhuur Verhagen and Van Driel in the Netherlands; Etarco in Canada; Van Seumeren’s 50% share of Holift in the Netherlands (a joint venture with Hovago that owns seven cranes ranging from 250t to 500t); Van Seumeren’s 47.5% share of Fostrans in France; Van Seumeren’s 50% share in AVS in the USA (a joint venture with Maxim, formerly Anthony); and other companies previously completely or partly owned by Van Seumeren Holland BV.

From Mammoet is included Mammoet Stoof, Mammoet Engineering & Innovation, Asia-based Walter Wright Mammoet, US-based Mammoet Davenport, and Mammoet’s 30% share in Mammoet Shipping. As Van Seumeren has been scaling down its maritime activities, and last year sold a tugboat and its share of two crane barges, it cannot be assumed that the shipping interest will be retained.

The deal was closed on 12 July after all the regulatory procedures had been passed. In spite of the global strength of the two companies, there was apparently never any risk of encountering monopoly or cartel objections.

Van Seumeren first tried to buy Mammoet last year, in the first round of bidding. “We couldn’t agree on conditions,” says Frans van Seumeren. “Then we came in on the second round and that was successful.” The deal was funded by a further dilution in the van Seumeren family’s shareholding in the company.

ABN Amro and NPM had already each bought an initial 18.2% share of the group in January 1999. For the Mammoet acquisition, they increased their stake further. Frans van Seumeren will not say how much of the company his family now owns, except to say that it is still more than 50%.

Similar but different

The logic of the merger of Van Seumeren and Mammoet is apparent. They have definite similarities as companies, aside from both being Dutch heavylift and special transportation companies. Mammoet was slightly the stronger in horizontal transportation, owning 394 axle lines of self-propelled modular transporters (SPMT) to Van Seumeren’s 200. Van Seumeren was slightly the stronger in vertical transportation, owning 280 cranes in total, compared with Mammoet’s 223 cranes.

Mammoet had about 40% more employees than Van Seumeren. The new combined company has 1,400 employees. But in financial terms they were broadly similar in size, with both companies making operating profits in the region E16m on turnover of about E120m. However, there are also significant cultural differences, and here lies the real challenge of making the merger successful.

“Van Seumeren was a family company, Mammoet was a subsidiary of [publicly owned] Nedlloyd,” says Frans van Seumeren. “We were centralised, they were pretty decentralised. We were sales driven, Mammoet was more bureaucratic.” Actually, ‘sales driven’ is not his first choice of words. He initially says ‘aggressive’ which may be more accurate but he fears the negative connotations of the word.

“We want to find a way to combine the good things of both companies,” he says.

He explains the difference in structure between the two companies, pre-acquisition. Mammoet’s organisations in the USA, Mammoet Davenport, and in Southeast Asia, Walter Wright Mammoet, were self-supporting companies. But if, for example, the US operation had a big crane lying idle it would not look for work for it in Asia. The more centralised Van Seumeren would oversee all operations and management of resources from the Netherlands.

“We have to be flexible,” Frans van Seumeren says.

“I see the cultural differences but we will overcome them,” he continues. A special team has been set up to manage the integration process and emphasis has been placed on open channels of communication with the staff. On the weekend of 18-20 August a management meeting of 45 senior staff was held in Gameren, the Netherlands, to set out the framework of the new organisation (see box). From this, according to the strategy, the new company will grow.

The target, says Frans van Seumeren, is to take the new Mammoet (though not the Van Seumeren Group) to the stock market in 2003. “We had already thought about a flotation about 18 months ago, but then Mammoet came along.” As Van Seumeren has grown, it has had to start behaving more like a corporation. Bringing in outside shareholders, the drive towards the stock market and the acquisition of Mammoet all accelerate this. For example, the company published an annual report for the first time this year, setting out its balance sheet and accounts. It is also developing a new head office on a quayside in Schiedam, or ‘the greater Rotterdam area’ as the company is learning to call it. For a company working internationally and transporting heavy equipment by sea, Rotterdam is a more appropriate base than an industrial estate in De Meern, near Utrecht.

The equipment

Van Seumeren is better known internationally for its major project capabilities, but it also has rental fleets in the Netherlands, Belgium, Germany and now the UK which it is just starting to grow. Van Seumeren has worked in the UK for a number of years, heavylifting in offshore fabrication yards, and it has an office by Amec’s yard near Newcastle. It has now set up a new depot for a taxi crane rental operation, though the fleet is small, with just 10 cranes, the ambition is big. While the major UK players Initial GWS, Hewden Crane Hire, Ainscough and Baldwins are all finding the UK crane market tough, Frans van Seumeren is confident he can make money in the UK. “I think we can find a place there,” he says.

However, the future of the new company is firmly and clearly focused on heavy lifting and transport engineering, he confirms. “We are not really focused on taxi crane rental,” he says, in spite of the new venture in the UK.

While the company has attempted to minimise job losses caused by the merger – using early retirements where possible, rather than redundancies – there is no escaping that some of the machines will have to go.

The new Mammoet has about 25 cranes that have capacities of more than 800t, although five of these are jointly owned with other companies. “I think we have a little too many,” says Frans van Seumeren. He thinks that he will have to get rid of about five machines, although no decision has been made on which five. He says that the company has to “be careful” where it sells them as it does not want to help other rivals or even create a new one. So don’t expect to see Baldwins or Sarens picking up one of the CC 4800s.

The protracted takeover of Mammoet has slowed Van Seumeren’s PTC development programme. The transportable PTC – Platform Twinring Containerised – crane lifts 1,600t in basic configuration or 425t at 51m radius (CT Mar99, p34).

The initial plan was to build one a year for seven years, so number three should be finished by now. Instead work on the third unit will not start until at least July 2002.

The PTC was developed in response to the Mammoet Sliding Gantry (MSG), an even stronger but slower containerised heavy lifting machine that works by strand jacking rather than winching. There will not be any more MSGs developed now, Frans van Seumeren says.

Frans van Seumeren is only 50 but there are things in life that he is looking forward to doing, other than running the world’s biggest heavy lifting company. He is not the kind of man, he says, who wants to work for ever – he has too many hobbies. When we met in late August he had just returned from a fishing weekend with Doron Livnat of Hovago and Christian-Jacques Vernazza of Mediaco. Van Seumeren owns joint ventures with both of these companies, but this was no business trip.

So how much longer does he plan to stay around the industry? “First of all I have to make a successful story out of this merger. Then I have to go to the stock market. Then I will do two years after that. So I think it is a minimum of five more years that I have to work.”