EXCLUSIVE INTERVIEW: MICHEL GIANNUZZI, CEO OF THE VERALLIA GROUP -- glasstec Trade Fair

Michel Giannuzzi took over as Chairman and Chief Executive Officer of the Verallia Group in September 2017. He was born in 1964 and previously served for just over a decade as CEO of Tarkett, a global leader of innovative flooring and sports surface solutions. During his tenure at Tarkett, Mr Giannuzzi pursued a profitable and sustainable growth strategy, which led to a successful Initial Public Offering (IPO) in 2013. Prior to that, he held several leading positions within the Michelin and Valeo Groups, having graduated from Ecole Polytechnique and Harvard Business School.
“I have always been passionate about all my assignments” he explains. “I love challenges and the teamwork to be developed to succeed. And of course, pride comes naturally with people development and success!”

Having always worked for industrial companies, Michel Giannuzzi has found the glass packaging industry especially interesting because it is highly process-intensive. And after his first year, there are no regrets about joining.

“It is an industry where experience matters” he says. “Tremendous knowledge is accumulated over decades and people rely a lot on their personal experience and knowhow. They have long tenures in the company and this is of course an important asset for Verallia. On the other hand, it is an ‘inward looking’ business, without too much exchange with other industries and where most people stay their entire careers within the same company.”

In his first year with the organisation, Mr Giannuzzi has helped Verallia to shape its values around themes that were already in its DNA and that resonate most closely with him. First and foremost, this includes a strong focus on customers and a passion to serve them, together with respect for the workforce, laws and the environment. “Thirdly, I really want people to feel empowered and accountable for their results” he says. “And of course, people are more efficient when they work as a team, so teamwork is important.”

Michel Giannuzzi’s management style is based on these four tenets. “It is a very straightforward and direct style, because I am people- and results-focused. My personal philosophy is to walk the talk… I say what I do and I do what I say!”

As CEO, Mr Giannuzzi sets the vision and defines the strategy for the company and makes sure that Verallia has the correct talents to execute it. “My role is to lead and engage the teams and to develop the pool of talent, either by making people grow or by attracting new talent to ensure that we achieve our objectives. This is always achieved with a strong respect for people and a balanced and respectful social dialogue.”

He also places strong emphasis on reinforcing the company’s ambition for excellence, whereby Verallia wants its industrial operations to become best-in-class via the VIM (Verallia Industrial Management) lean manufacturing programme. This goal also relates to the company’s approach to its supply chain, sales and marketing activities.

The critical role played by his predecessor, Jean-Pierre Floris in helping Verallia make its transition from a division of Saint-Gobain into a standalone, independent entity is highly respected. “He succeeded in making this transition very smooth and put Verallia on a good improvement track in terms of results and industrial and commercial performance.” According to Michel Giannuzzi, Jean-Pierre Floris still attends board meetings as an observer but he now concentrates on bringing his tremendous industrial knowledge to support the French government.

POSITIVE INTERNATIONAL EXPOSURE

“Manufacturing improvement has been my top priority” says the Verallia CEO, when discussing some of the changes he has implemented so far. “One of my first actions was to create the position of Group Industrial Director. It is important to make people grow internally but also to attract new talent from other industries, so our Group Industrial Director was recruited externally.”

A longer-term priority is to help Verallia become the preferred glass packaging supplier, with the best-in-class industrial performance, achieving outstanding financial results and developing diverse and talented teams.

Having always worked for companies with wide international exposure, Michel Giannuzzi is well aware of the challenges and opportunities of managing a multi-national, multi-cultural organisation like Verallia. He has lived and worked in Japan and the UK, for example, which has reinforced his sensitivity to cultural differences. “The main challenge for any international company is on the one hand to respect cultural differences and on the other, to unify all teams around the same company values and objectives. It is a delicate balance to find between the respect of local customs and the unification around values, ambition and objectives” he suggests.

Mr Giannuzzi wants the Verallia culture to be strongly entrepreneurial, with individuals at all levels within the company performing their jobs as if the company was their own. He is an advocate of decentralised and empowered teams, where the global headquarters corporate functions provide guidance and support to the regional management teams. Business knowledge and daily operations are the responsibility of these regional teams, who are fully empowered to conduct their operations, serve their customers, develop their markets and deliver the expected financial results.

Verallia is working diligently to develop its future leaders via in-house training programmes, sometimes supported by consultants. Specialist e-learning initiatives have been developed and personal coaching/mentoring activities are encouraged. In addition, succession planning processes are helping the business to identify the needs and potential career development of every individual. These succession plans are reviewed on a regular basis to ensure that talent is nurtured and grown.

IMPROVEMENT GOALS

Verallia leverages its size to invest in R&D and process development to benefit all 32 of its glassmaking plants. Balancing this top-down approach, the company also benefits from the sharing of best practices among the plants, information that the central teams in R&D and process development help to disseminate and share.
Michel Giannuzzi is eager to continue promoting the virtues of a circular economy, as he did extensively in his previous job at Tarkett. “I believe this is good for the planet and for humanity. Glass is an extraordinary example of what we can do in a circular economy.”

An important focus for Verallia is to increase the amount of cullet used in its glass melting furnaces. The company is well-known for its expertise in cullet processing and operates six specialist treatment facilities; two in France via the Everglass subsidiary, one in Germany and three in Italy through the Ecoglass and Vetreco subsidiaries, the latter being a joint venture. According to Mr Giannuzzi, Verallia is investing strongly in these facilities and working on a series of new projects.

In Argentina, given the absence of any collection system, Verallia has established its own household glass recovery programme and in neighbouring Chile, the glassmaker has signed a collection agreement with the municipalities close to its plant.

“We are also focused on reducing energy consumption and CO2 emissions through investments” the Verallia CEO confirms. “Every time we shut down a furnace for renovation, we see it as an opportunity to upgrade its design to make it more efficient. These changes are the main source of reduced energy consumption and CO2 emissions.”

CUSTOMER FOCUS

Michel Giannuzzi believes Verallia leads the industry in terms of dividing the market into many different segments and addresses all glass packaging categories for food and beverages with a broad product portfolio. In Europe alone, the glassmaker has more than 4000 references and plays its part fully in satisfying the global trend for increased levels of customisation and personalisation demanded by customers.

Verallia offers customers an extensive range of decoration techniques from its three integrated plants: Saga Décor and Société Charentaise de Décor in France and Verallia Polska in Poland.

“Our willingness to accommodate customers is accurate from a product point of view but also from a service perspective” Mr Giannuzzi emphasises. “Close to its customers, Verallia proposes an extensive range of services, designed to support them in their day-to-day business and in their development projects.”
The company has 13 product development centres that rework and revise customer projects to ensure the manufacturing feasibility of bottles and jars. To bring these glassmaking projects to fruition, these centres provide customers with extremely efficient tools, including computer-aided design, 3D printers, physical-realistic computer-generated images and finite element mechanical resistance analysis. Verallia also enables its customers to participate interactively (directly or remotely) in the development of their models (3D displays, computer-generated images, scale models etc), while ensuring the product’s optimum weight and mechanical strength.

Furthermore, additional services developed for customers include special logistics schemes and training courses devoted to glassmaking processes, organised within individual plants.

DESIGN AWARDS SUCCESS

The Verallia CEO has expressed his pleasure at the continued success of the company’s Design Awards competition. Since 2009, several Verallia subsidiaries have organised annual design competitions, where students and young art or design school graduates imagine, from a defined theme, an innovative type of glass packaging. Entrants receive support from Verallia teams to familiarise themselves with the glass material and its demanding industrial requirements.

“With this design competition, Verallia provides an unprecedented approach to innovation for its customers, who are closely involved in the selection of the winners” Michel Giannuzzi explains, emphasising that some designs have even been selected for commercial release. This was the case with the Soirée à Rosé bottle (designed by the winner of the first competition in 2010), marketed and sold by Gérard Betrand and the Serac bottle (winner in 2016), selected by Maison du sud – Jeanjean. “These two products have enjoyed significant success in France and internationally” Mr Giannuzzi continues. “I am very pleased to see that these innovative designs please our customers, as well as end users.”

Separately, Verallia is reinforcing its high end offering with the premium brand Selective Line by continuous investments in innovative designs. The company also helps customers to monitor design trends. Each year, its Selective Line brand presents a style book to customers and design agencies to inspire their future developments. This book analyses upcoming international trends for the coming year and highlights the latest consumer habits and haunts. Along with these trends, the brand suggests innovative bottle shapes and decoration ready to be developed. “This is how the Stockholm and Los Angeles spirits models and the Roma wine bottle were added to the Selective Line Collection” Mr Giannuzzi confirms.

BUILDING PARTNERSHIPS

Since his appointment as CEO, Michel Giannuzzi has met and established personal relationships with many materials and equipment suppliers because he believes strongly in the extended enterprise concept, in order to foster innovation, stronger collaboration and more efficient partnerships. “I think there are still many opportunities to help technology providers better understand our business’ constraints and objectives. There is room to improve current processes or even invent new ones thanks to close partnerships in order to help us achieve our goals.”

Similarly, on the key subject of building and maintaining successful relationships with customers, Mr Giannuzzi believes that such relationships are based on trust and a genuine win-win approach, where both parties benefit. He confirms that Verallia is performing well in all markets in which the company competes, thanks to its strong customer focus, supported by its good manufacturing and supply chain approach.

“With all of the debate surrounding plastic’s impact on the environment and people’s health, glass packaging has a tremendous opportunity to (re)gain market share” he continues. “In particular, Verallia has performed very well, with good organic growth and an improved EBITDA margin thanks to the implementation of successful productivity action plans. We also generated good cash flows to deleverage the company.”

Investment highlights include the construction of two new furnaces. These projects, one in Azuqueca (Spain) and the other in Villa Poma (Italy) are in response to dynamic growth in both markets. There is also a major upgrade of the Verallia plant in Chile, where the furnace will be totally rebuilt and equipped with the best available end port regenerative technology.

As a general rule, investments are prioritised according both to payback criteria and a team’s motivation to make the best use of their equipment and assets. The company is constantly evaluating possible expansion possibilities, including joint ventures and acquisitions.

DYNAMIC RESULTS

In the opinion of Michel Giannuzzi, FEVE is doing a fantastic job to promote the glass container industry to government authorities and end consumers. “It is a very dynamic and well run federation, providing a good service and results for members. Verallia is bringing its experience and resources to support the glass packaging industry and in return, we benefit from the strong results that FEVE has achieved in promoting glass packaging.”

In recent months, the Verallia CEO has been elected Vice President of FEVE, an appointment he suggests is recognition of the strength and responsible behaviour of the company rather than a personal accolade, given his short time in the industry. “I am honoured to represent the industry and will support the President (Johan Gorter) in his leadership role. One of the most important aspects I think is to help bring members together and get agreement to work on common projects that can benefit the whole industry and which bring value to our sector and our customers. So I will be working with the President to ensure that our association’s priorities are aligned with our members’ goals and provide guidance to the FEVE team to achieve results.”