Laco, independent, international, expanding6 March 2013
Janet Taylor visited Laco at its recently expanded headquarters to talk about its development since becoming independent and future strategy
Laco, the specialist in ironers for the coin-op and OPL market, has grown from a Belgian company serving its local markets to one that is expanding internationally. Its customer base covers not only central Europe but also the USA, Middle East and several South American countries.
The company was founded in 1994 and owned by the Lapauw family but run by the two Lapauw sons, Dominique and Yves.
The name Laco derives from Lapauw Construction but was deliberately chosen because the link with the Lapauw company was not obvious. From the start Laco had its own brand identity and indeed it was specifically formed to target the launderette/coin-op sector, which was then becoming a significant market in Belgium.
To do this it responded to demand for a 500mm ironer that was gas-heated. This in itself was a relatively recent concept but the ironer that Laco introduced was particularly innovative. It used thermal oil heating but was based on a flexible chest with a pump to distribute the heated oil.
Innovation went further. The parent company's large ironers also used a flexible chest but while that was hinged the Laco ironer had a dimpled chest which was flexible in itself.
Having introduced the flexible chest concept, Laco began to extend its range to include ironers of 370, 300, 500, 600 and 800mm diameter.
Expanding the customer base
In 1998 Laco began to expand in other ways by looking beyond Belgium for its customer base. The product was very attractive - not only did the Laco range offer smaller ironers but it also offered an alternative to the cylinder design. Initially demand came from the parent company's customers that were looking for smaller ironers to complement the large machines. So the Laco-manufactured and branded ironers were distributed by the parent company to this base, which took in a wider European market.
The next stage came in 2003 when Laco moved into Eastern Europe through an equipment company that already sold its washers and dryers in the region.
By 2004 the company was becoming a viable proposition for expansion internationally. It had a full range of ironing solutions that could handle volumes from 300`- 3,000kg per day. These not only covered a range of diameters but could also include built-in folding options. Length folding was offered initially and cross-folding was introduced later.
Wim Opsomer joined the company in 2009 as export manager and once settled in his role, he began to look for suitable companies to form a distribution network. He started talks with companies that already produced small- and medium-sized washer-extractors for the coin-op and OPL markets.
Laco's brand started to gain strength in central European markets such as Austria, France and Switzerland. The strategy was also proving successful in Eastern Europe and even in the USA.
All these markets had local brands but Laco's Belgian roots stood for high quality and prestige.
"We use our brand as a selling point to customers," says Dominique Lapauw.
By the end of 2009, Laco had split commercially from its parent and made its own management decisions, although the parent company's owners still had a financial interest. It was also in 2009 that Dominique Lapauw's son Thibault joined the team and worked on product design and development.
Home market strategy
While the company continued to grow in a broad market, sales to the Belgian home market formed a relatively small part, about 2%, of its business.
Up to 2010, the company had been selling directly to its Belgian customers. Wim Opsomer and Dominique Lapauw decided that change was needed.
The distributor network had been very successful in its first year and in 2009 the company saw growth of 35% which was mainly concentrated on the Laco brand but also included some private business.
So in 2010 the company appointed Mench Industry to develop home market sales and as a result Belgian sales started to take off. Later that year the split from Lapauw became complete when the Lapauw family sold their company.
Dominique Lapauw then became Laco's sole owner while Yves Lapauw decided to set up his own business and to explore a different market.
Both Dominique Lapauw and Wim Opsomer agree that the split did not have any repercussions on Laco. Growth continued and reached 23% in 2010. The management team started to plan how to build the brand and the business further.
Extending the production capacity was an obvious route. To do this Laco needed to raise its production rate of 6 - 8 weeks, which was needed because the manufacture of some critical parts was being outsourced as Laco's factory had insufficient capacity to make these parts in-house.
So plans were drawn up to extend the HQ with both factory and office space. The first stage was completed in 2011 and has already allowed the company to be more ambitious. In 2012, around 800m2 of factory space was added bringing the total to 2,600m2, exclusive of a mezzanine area. The expansion also included an extra 300m2 of office space.
The expanded factory brought the additional benefit of streamlining production. The production rate doubled and also allowed ironer chest production to come in-house.
At present two assembly lines produce a total of around 15 ironers per month but eventually, says Dominique Lapauw, "We could use the extended space to produce around 25."
The benefits of the expansion were introduced to customers at an open house in April 2012 where innovatory products included the Magic folder, which is designed to be added to the front of a return-feed ironer and can operate as a multi-lane machine. The widest version, the Magic 3300, operates in four lanes. Other products included an 800mm diameter chest ironer with a working width of 1,300mm for ironing small pieces in two lanes.
The width of the machine allows two, small-piece folders to be placed at the back of the ironer.
Meanwhile, the expansion of the international customer base has continued. Opsomer says his aim is to concentrate on markets that are stable -although some such as Germany may be badly structured.
Central Europe remains the main target, as that is where smaller ironers are most appreciated.
Distributors in countries such as South Africa and Brazil do contact Laco. Opsomer says: "We take such opportunities when we find them."
Product development is also ongoing. A 370mm ironer with four lanes and an integrated folder has been introduced.
Laco is also exploring the possibility of having a folding bypass option to meet the requirements of some of a laundry's end-user customers.
The company is also looking at further technological development. Dominique Lapauw's son Thibault as product engineer will play a part here.
Financially, the company is also very successful with a turnover of 3.7m Euro in 2011/2012.
And the future? "We can only grow further," says Dominique