Developments within the organization

Investments in operations

Optimal logistics and operations are essential for us to be able to realize our promises to our customers. Our logistics activities can be grouped into three main functions. Distribution from stock is one of these main functions. Here we make a distinction between sales from freely available stocks and sales from dedicated customer stocks. An optimized network of stock-keeping locations with a broad product portfolio and the mutual exchange of stocks gives us a powerful position in the market.

A second function is the custom treatment of pipes and pipe and tube products: ranging from cutting, shot-blasting and red-leading to bending, drilling and deforming pipes and tubes using a robot-supported multi-step treatment process. In Europe we have over 360 machines, including more than 230 saws, that enable us to provide virtually any custom treatment.

The third function concerns projects. Products then go directly from the mill to the construction site. However, often they are also shipped from our project stocks in our warehouses, where the order streams are consolidated, and where products are regularly subjected to minor treatments.

In 2021, we invested in multiple branches in order to further improve service from stock to our customers and to further optimize production and processing. Many of these investments are related to the integration of logistics and operations following the acquisition made at the end of 2019. Under the banner OneHalmstad, our Heléns branch in Sweden devoted its efforts to consolidating all activities at a single location. A 5,000 m² warehouse was constructed in Halmstad where all storage and production activities can be brought together.

A great deal of effort has been put into this large project and the associated moves. Once completed over the course of 2022, all logistics activities will take place from a single warehouse. Following on to this project, work on building a new regional head office for Northern Europe will be started.

In the fourth quarter of 2021, we started working on expanding the warehouse in Vyškov in the Czech Republic. This 5,000 m² expansion will include a honeycomb system that will provide for a faster and more efficient logistics process. As a result, the storage and stock-keeping locations in Central Europe will also be more efficiently aligned, which will make further sales growth possible. In addition, we could close the warehouse in Vienna, Austria due to the centralization of stocks in branches in Germany and Central Europe.

A study will be conducted into the further optimization and coordination of our stock-keeping locations in the Benelux and Germany. This will include a review of the capacity of the central warehouse in Duisburg and we will be investing in an advanced monorail system in the central warehouse in Zwijndrecht, the Netherlands. The hypermodern warehouse of our Swiss company Kindlimann in Tobel-Tägerschen as opened in 2020, in many respects is a guideline and example for these projects.

IT developments

A state-of-the-art ERP system is essential for integrally managing our business processes. In 2021, under the 1Leeuwen project banner, we began redesigning our ERP system on the basis of our existing SAP systems. The objective of this project is to create a single integrated system for managing all of our business processes within the SAP S/4 HANA environment. Some of our companies already make use of S/4 HANA, while others are still using SAP ECC. A team of specialized Business Architects and SAP Consultants is working on further implementing this system to optimally manage our supply chain, and commercial and financial organization. In 2022, the branches in the United Kingdom will be switched over to the new S/4 HANA system, after which the system will be further rolled out over the coming years.

At Van Leeuwen we make use of multiple platforms that enable us to communicate with all parties in the supply chain through means of automated messaging. This enables us to receive customer orders, send out confirmations, supply delivery information in real time, as well as make certificates and invoices available. In 2021, additional investments were made in EDI connections with our customers, suppliers and carriers. Our aim is to increasingly further implement digital integration with our permanent partners. In a number of branches, work was successfully started on automatically converting e-mails received from our customers into orders in the SAP system (using OCR, optical character recognition). The use of these digital connections means less paperwork, a reduced chance of errors and faster data processing times.

In December 2019, a large-scale IT project was initiated with the objective of shutting down, replacing or migrating the systems from the acquired Benteler Distribution company with or to Van Leeuwen’s hardware and software environment, connecting branches to our network and replacing telephone exchanges. This IT project was successfully completed in mid-2021. Over a period of eighteen months a total of more than 80 centralized systems, 1,300 workstations and 50 branches were converted, a large project that did not cause any disruptions to business operations.

Cybersecurity has our constant attention. In 2021, we further upgraded our cybersecurity. Furthermore, a large number of security protocols was tested and improved, and we regularly train and inform our employees about cybersecure behavior.

Quality, safety and sustainability

Our customers are confronted with increasingly stricter requirements relating to quality, safety and sustainability. These are areas to which Van Leeuwen devotes constant attention as well. Every year we set high quality standards for ourselves that are translated into objectives. We regularly monitor progress on the basis of Key Performance Indicators (KPIs) and internal audits. Our Approved Manufacturers List (AML) only contains suppliers that are approved by Van Leeuwen following a strict selection process.

Quality awareness has a long history at Van Leeuwen. We have been working in accordance with ISO standards for tens of years. The ISO 9001 standard and the associated certificate form the basis of our quality policy. In 2021, we started integrating the quality system used by Van Leeuwen branches with the quality system used by the branches of the former Benteler Distribution company. Both quality systems will be merged into a single ISO 9001-compliant system in the first quarter of 2022. With regard to sustainability and an energy-conscious approach to work, we adhere to the international OECD guidelines and act in accordance with the ISO 14001:2015 standard. Branches focused on the automotive sector are IATF 16949 certified.

We pursue an active ISO 45001:2018-compliant safety policy. We devote constant attention to the health and safety of all of our employees. A series of group procedures supports the Group’s safety system. Safety campaigns were conducted in 2021, to reinforce the safety focus and to further improve safety awareness. The number of accidents resulting in absence from work decreased by 17%. While this is a positive development, we continue to aim for a further decrease.

Van Leeuwen assumes responsibility for carrying out its business operations and growth plans in sustainable ways with respect for the environment. This policy is set out in the Van Leeuwen Code of Conduct, as well as in internal policy documents pertaining to Health, Safety and the Environment. The concern for our climate, the environment and society is self-evident for Van Leeuwen. Continuity is a guideline for us as a family business. We feel responsible for the next generation, within as well as beyond the company. This past year, we started working on formulating our sustainability objectives. In 2022, we will work these out in further detail and make them measurable, with due consideration to the entire value chain from mill to customer. These objectives in part concern energy consumption and renewable energy, and safety, diversity and inclusion at the workplace.

Together with a number of prominent suppliers we are investigating the possibilities of keeping pipes in stock that are produced with a reduced CO₂ footprint. A key aspect in this regard is to jointly explore with our customers where these ‘green pipes’ can be applied and how the extra costs will be distributed within the chain.

As a leading distribution company, in the future we also aim to devote greater attention to making distribution greener. Transportation by rail or water instead of by road, stocks kept closer to the customer, and, for example, one-time delivery using fuller trucks instead of frequent deliveries with trucks that are only half full. At the end of 2021, our company in the Netherlands initiated a pilot to supply our customers via a bio-diesel fueled truck. We expect to further roll out this program in the future.

The SwinSolar project was also initiated at the end of 2021. A solar photovoltaic installation will be installed on the roof of our warehouse in Zwijndrecht, the Netherlands. This installation is expected to be put into operation over the course of 2022. The installation will have a 5 megawatt peak capacity, which provides for all of our own electricity needs throughout the Netherlands and in addition, enables us to return sufficient power to the grid to meet the electricity needs of over 1,300 households. A number of smaller solar initiatives has also been started up elsewhere in Europe.

Organization and people

To achieve our strategic goals and to continue to be a leading, trendsetting specialist in steel pipes and tubes, we rely on a large team of skilled and motivated professionals. We currently are and will continue using our People Strategy over the coming years to work on having sufficient numbers of well-trained employees, the strategy of our company, standardizing our work processes and creating pride and job satisfaction for our people. We aim to be an attractive employer, now and in the future.

Our presence in 33 countries, with 75 branches and 58 different nationalities, illustrates our international scope. The Van Leeuwen Pipe and Tube Group's total workforce currently consists of 2,429 employees (2020: 2,419). Women comprise 30% of the total workforce, men comprise 70%.

Our people play an essential role in providing service to our customers. Many of our employees have acquired a wealth of experience and knowledge, often through long-term employment. Transferring this knowledge to new colleagues and combining existing knowledge with new experience are important processes. During the post-acquisition integration we noted that combining knowledge from two organizations often leads to very powerful new organization structures.

In support of all of this and to build a strong HR organization structure for the future, we implemented the Workday program in virtually the entire organization in 2021. This enables us to provide our employees with even better HR support and to work on further strengthening our organization through means of education, training and performance management. Our global organization offers many opportunities for talented employees to develop themselves. We continue to develop this talent through, for example, a monthly ‘CEO corner talk’ and through international exchanges.

In 2021, our employees were once again regularly required to work from home as a result of the corona measures. We consider contact with colleagues and the exchange of knowledge and experience essential. We therefore look forward to a more relaxed situation with fewer restrictions in the near future. On the other hand, we believe that working from home on a limited scale can contribute to enriching the work-life balance. We are working on a pilot to determine the optimal situation in this respect.

As employer, Van Leeuwen offers its people equal opportunities. The Management Board and the Executive Board actively promote balanced gender and cultural diversity within the various operating companies.

Compliance

Conducting business fairly and transparently is a high priority for Van Leeuwen. Laws and regulations, such as competition, corruption and privacy legislation, international sanctions, and import and other constraining measures: all applicable regulations are closely monitored, evaluated and applied within the organization. Internal procedures, training and auditing are key areas for attention in this respect. To ensure we comply with the increasingly more complicated regulations, we appointed a Head of Compliance at the beginning of 2022. This person will be supported by a network of compliance officers in the various countries in which we operate.

In 2022, we will devote specific attention to the speak up policy, whereby we offer our employees and stakeholders the opportunity of reporting concerns and possible wrongdoings in a safe environment without becoming a victim of reprisals, in accordance with the EU guideline concerning whistleblowers. We are taking various measures to further limit the risk of bribery and conflict of interest, and organize training sessions to promote awareness among our employees.

Our Code of Conduct clearly sets out our principles relating to the attitude and behavior of our employees. This information is provided to each employee on joining the company. Last year, no code of conduct incidents were received by the Code of Conduct Compliance Committee.