Luc Nadal: GEFCO’s purchase of IJS not just a takeover

The news in September that French logistics company GEFCO was buying Dutch freight forwarder IJS Global might have surprised those with a knowledge of air cargo history. 
After all, IJS was created back in 2004 with the aim of creating AEI mark two — a new version of the legendary US-based forwarder headed by Gunther Rohrmann that was swallowed up by DHL Global Forwarding in February 2000. 
Meanwhile, GEFCO started life in 1949 as Groupage Express de Franche-Comté, a company created to improve the supply and distribution of products from the Peugeot factory in Sochaux, France. It remains a strong player in automotive logistics to this day, though since the late 1990s it has been expanding both geographically and into new industry verticals. 
So a logistics business and a forwarding business — how will they fit together? And why did GEFCO want to make the purchase or IJS to be bought?
There was clearly some initial resistance on the part of IJS, because they — or rather private equity group Nimbus which owned 74% of the company — resisted takeover bids for a while. But eventually the deal was done and IJS chief executive (and former AEI executive) Sjoerd van Loon has pronounced himself delighted with the prospect of joining GEFCO.
From GEFCO’s point of view, chairman of the board Luc Nadal explains that until the late 1990s, GEFCO’s main business was managing parts and finished car logistics for Peugeot (or, from 1976, Peugeot-Citroen).
Geographical expansion then followed, with subsidiaries established in Germany, Poland, Argentina and Brazil in 1999, Morocco in 2001, Russia in 2003, China in 2004 and Chile in 2009. The company started to offer its service to other automotive clients and to diversify into motorcycles, industrial hygiene, beauty, consumer electronics and other sectors.
In 2012, PSA Peugeot Citroen sold 75% of GEFCO to Russian Railways. As of January 2014 the company was present in 150 countries, had 37 subsidiaries and five main activities — overland, overseas (that is to say, forwarding), warehousing and reusable packaging, finished vehicle logistics, and Customs and tax representation.
“Overseas” — the GEFCO forwarding capability — was present pre-merger in 40 countries, but there were big gaps in its map. 
“So we were looking for a company that would complement our network and we found IJS,” says Nadal. “There are few cost synergies in this deal: it is mainly business development synergies.”
In particular, IJS for the first time gives GEFCO a presence in the US, Taiwan, Singapore and Thailand, and provides a strong boost to its existing operations in the UK, Netherlands and Hong Kong.
“To integrate IJS is easy because there is a relative lack of overlap,” says Nadal. “There will be a low impact on our teams, with the exception of China and Hong Kong where we will need to re-size our organisation.”
One other attraction IJS had for its new parent was its strength in airfreight. Nadal explains that the pre-merger GEFCO forwarding business was stronger on the ocean freight side. “So we are reinforcing our airfreight capabilities and bringing ourselves bigger buying power in airfreight,” he says. 
IJS will in fact account for more than half the merged business’s airfreight revenue and 35% of its overall revenue. And far from IJS being absorbed into GEFCO’s existing forwarding operation, the reverse will happen. 
“We have decided not to merge IJS into GEFCO, but to build IJS into a global business unit within GEFCO,” Nadal explains. “Staff in GEFCO now in forwarding will become part of a new forwarding vertical built around what was IJS.” 
Sjoerd van Loon and his former IJS colleagues will remain in charge of this organisation, which answers the question about the different business cultures of GEFCO and IJS. 
Essentially, GEFCO is importing IJS culture into its forwarding operations.
Nadal stresses that the IJS acquisition should not be seen as an attempt to move GEFCO away from automotive, which remains one of its core strengths. 
“We now work for all the original equipment manufacturers and Tier One suppliers somewhere around the world — for example we are a leading provider for Volkswagen in Germany and we have been chosen for car distribution for them in China, for Ford in Argentina, and for Jaguar Landrover in the UK.
He admits that while automotive was 60% of its forwarding business before the merger, now that percentage will be much less, but adds: “It is not a problem for us to be exposed to the automotive industry; rather we want to become more global, to not be overexposed to Europe.
“We see ourselves as able to build and manage automotive supply chains, and the automotive industry is one of the most demanding customers for this. So the aim is not to get out of that, but to offer the same high level of services to other industries.”
In this context, IJS brings GEFCO expertise and customer contacts in sectors such as pharmaceuticals, relief aid and hi-tech, while the GEFCO portfolio of logistics customers obviously gives IJS lots of opportunities to sell forwarding services. 
“From the day we announced the deal we started to cross-sell between the two companies,” Nadal says.
As for the IJS brand, it will be moved to the GEFCO name over time, but initially there will just be a tagline explaining that IJS is now part of the GEFCO Group. 
The merger puts IJS within a group with global coverage, though one that is still smaller than the big mega-groups. Does Nadal have ambitions to get even bigger through further acquisitions? It seems the answer is yes. 
“In order to grow, we need other acquisitions, mainly in the fields of forwarding and finished vehicle logistics,” Nadal says. “In forwarding we now have a nice network, but there are still some areas where we need to grow —such as India and South East Asia. Also while we are now present in the US we are not so big.”
But he insists that “the idea is not to grow for growth’s sake, but to have the capability to service customers anywhere they want to go, and to keep a customised service. That is the difference between a very big player and a player of our kind: that we can keep on providing a tailor-made service. This is our strategy”.
Supporting that approach is Russian Railways, whom one might think would be an interesting owner given the current state of geopolitics. 
But Nadal insists that this has not been affected by western sanctions and that its 75% owner is a stable partner. 
“We have a long-term strategy with our shareholder and we don’t have to worry what we will be doing in 3-4 years’ time,” he says. 
“For our customers it is an asset to be able to show we have a stable shareholding structure able to guarantee long-term certainty. When we want to do acquisitions, we have the support of our shareholder, as you can see with IJS.”
Being owned by Russian Railways also gives GEFCO a strong position in the expanding rail market between China and Europe. 
“We see it as a growth market,” Nadal confirms. But he expects it to remain a niche between air and seafreight. “It is not competitive on price with seafreight unless goods are expensive, and if you need an urgent solution then airfreight remains better. But for certain niche markets it is a good solution.”

Share this story

Related Topics

Latest interviews news

Airbus: Greener skies to drive demand for new widebody freighters

By Roger Hailey

Crawford Hamilton, head of freighter marketing at Airbus, is crystal clear about the environmental challenge facing airfreight: “The quickest route…

Read More

Share this story

Amerijet looks to the horizon as its fleet expands

By Damian Brett

Amerijet has confidence in the continued growth of air cargo. The Miami-based airline has been rapidly expanding its fleet in…

Read More

Share this story

New Magma Aviation CEO outlines expansion plans

By Roger Hailey

Freighter fleet and network expansion are already key strategic ambitions for Conor Brannigan, recently appointed chief executive of Magma Aviation,…

Read More

Share this story