The results were presented in July in Lyon, during the annual meeting of the plastics industry. Main conclusion, the French industry suffers from a chronic lack in solidarity and from the weakness of networking actions.

Competitiveness gaps

Titled Business practices in the plastics industry, benchmarking France/Germany/Italy, the study focuses on two sectors: car construction and packaging. The situation of the plastics industry in these three countries appears somewhat mixed.

Champions of profitability German firms are followed by Italian companies. French companies rank far behind. As far as bank financing is concerned, there is no comparison: French companies have a much more limited access to such type of funding than Italian and German companies do, while at the same time, payment delays accepted by the clients are much better in Germany.

If we compare the German plastics industry with that of Italy and France, we can quickly notice that German companies have become over time much bigger, while Italian companies are more comprised of very small businesses. The size of many French firms is intermediate. However, their sustainability is weaker as many of them are disappearing or are absorbed before being transmitted.

One of the main reasons, according to Accenture: the legal framework. It favours transfers, investments and durability in both Germany (establishment of an exemption system with a tax ceiling on donations and inheritance; existence of non-profit public investment fund investing on long-term basis in SMEs take-overs, with no possibility of any decision making within the company), and Italy (abolition of inheritance tax in the case of family transfers).

Regarding the manpower cost, Italy certainly enjoys the most competitive situation. However, costs are quite similar in France and Germany.

The benefits of network!

Actually, it is at the level of "collaborative" approach between partners of the same industry that German and Italian companies have obviously got the picture. Thus it is not unusual to see informal gatherings and business associations in those countries without any legal organization that corresponds. To optimize business relationships with brand owners, partnerships are created between mould manufacturers, converters and plastic suppliers. Common bids are made to some invitations to tender. One can even notice a spontaneous and non official market sharing... and improved coordination in response to tenders to avoid getting stuck in a price pressure pattern.

To expand overseas, German companies group themselves together and agree on trade shows participations (logic in stand co-financing, co-representation ...). For example, in Emilia-Romagna, three hundred people have left a large company, have each created their business with a staff of ten/twenty people, work together and have become world leaders in packaging ... Another example, again in Emilia-Romagna, 60,000 SMEs joined within guarantee cooperatives to negotiate with bankers, which enabled them to get a loan guaranteed by the cooperative with the same credit rates as those obtained by Fiat!

Innovation, training: what they do!

Regarding innovation, concerted training plans were introduced in Germany between universities and companies in order to offer the industry employees mastering advanced technology and meeting recruitment needs and to make the plastics manufacturing sector attractive in terms of career opportunities. In Italy, highly industrialised districts exist in Veneto, Emilia-Romagna and Tuscany. Hence the Italian industry is very flexible, ready to innovate, to perceive all the technological changes and adapt to market changes.

On the subject of "Training and development of the sector and jobs" ... there too, there is much to learn from our German neighbours. Apprenticeship is one great strength of this country as it is considered as a real "national priority". Training provided to the largest possible number and co-financed by companies and federal subsidies.

On the subject of "business practices with customers", upstream of the contract, in Germany particularly, there is often consistent information sharing between the decision-maker and the subcontractor with a dialogue between each technical teams (purchases only occur often at a later stage), a sharing of the business plan, an understanding of associated variables (impact of a volume delta, impact of price fluctuations on raw materials, scenario implementation...), a mutual commitment on key assumptions, finally a consistent technical dialogue upstream of the contract signing.

In Germany again, contracts usually take into consideration financial issues with real commitments on volumes, thus paving the way for trust and understanding in the event of changing conditions.

Usually, Italian and German companies have more flexible business practices allowing to find a compromise with possible contract adjustments (in financial terms, or regarding specifications...). There is a will to find the best compromise and review together all contractual elements (and possible financial arrangements).

Finally, concerning the access to financial resources, in Germany and Italy, brand owners don’t have to bring guarantees. In Germany, business plans and prospects offered by brand owners (volumes, contracts...) suffice to haveaccess to financial resources. In Italy, it is the "privileged" relationship and proximity between the local or regional bank and the subcontractor that almost always gives access to financial resources. What a dream for any French manager!