Developments within the organization
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 enhances our competitiveness in the market.
A second function is the custom treatment and processing of pipes and pipe and tube products: ranging from cutting, shot-blasting and red-leading to bending, drilling and deforming pipes and tubes using robot-supported multi-step processing. In Europe we have over 316 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 the project stocks in our warehouses, where the order streams are consolidated, and products are regularly subjected to minor treatments.
Thanks to various investments in plant and machinery, we improved our value-added services in 2022. This way we are better able to respond to the increasing need of our customers for custom work and components assembled by us. In 2022, we increased laser capacity, as well as the number of different treatments, in various branches. Due to the new machines and process improvements, our capacity, efficiency and delivery reliability increased.
We constantly adjust our product portfolio on the basis of market demand. For example, in Italy we started to keep Mechanical Tubes in stock. Van Leeuwen GmbH in Essen, Germany, which specializes in the Process & Power segment, has started to keep a new stock of alloyed boiler tubes for the German market.
Investments in our network
In order to further improve service from stock to our customers and to further optimize production and treatments, we constantly invest in our storage and production facilities.
Under the name OneHalmstad, key investments are being made in our Swedish branch in Halmstad. The warehouse has been expanded by 5,000 m² and all storage and production activities are being consolidated here – a large moving project that required considerable effort from the organization. In the context of this centralization, the Knäred branch has been closed. In addition, work was started on the construction of a new regional head office for Northern Europe, which is scheduled for completion in 2023. In June, Van Leeuwen Belgium moved into its new, modern office in Vilvoorde. Our branch in the United Kingdom moved its head office to a new, modern building and transferred the stocks kept in Brierley Hill to the warehouses in Middlesbrough and Bolton. Van Leeuwen France occupied its renovated office in December. Our German employees in Vaihingen will also be given a new workplace. We are building a new office in Vaihingen for this purpose.
In our Vyškov branch in the Czech Republic, the warehouse was expanded by 5,300 m², thus increasing its capacity to 18,300 m² in total. The warehouse is equipped with a honeycomb storage and order picking system. This investment in the renovated warehouse has enabled us to broaden our product portfolio and to supply larger volumes. Capacity has increased from 8,500 to 15,000 metric tons. As a result, a broader portfolio of stocks will become available for the market in Central Europe, focused on the machine building and hydraulic segments.
The Zwijndrecht branch in the Netherlands began working on the Monorail project. The Monorail is a 315-meter long, automated transport and sorting system. This system will make it possible to more efficiently and safely load our outgoing transport flows, so that our hub in Zwijndrecht can offer a better and more effective service in the Netherlands and surrounding countries. The foundation for the Monorail was constructed in 2022, and made use of flare pipes supplied by our Combulex branch. In total, more than 12 kilometers of pipes were used and a reinforced concrete floor with a surface area of more than 6,000 m² was constructed. The Monorail is expected to be operational by the end of 2023.
In December, Van Leeuwen Germany acquired the company Allstahl in Bergkirchen, near Munich. This company specializes in special quality precision and heavy wall pipes and serves customers in the Mechanical Engineering segment in southern Germany.
In 2021, the 1Leeuwen project was started up with the objective of creating a fully integrated system for managing all our business processes within the SAP S/4 HANA environment for the purpose of achieving organizational and process-based synergies. The companies in France, and in Beesd and Deventer in the Netherlands, have since migrated to SAP S/4 HANA. In 2022, preparations were made for the implementation of SAP S/4 HANA in the United Kingdom, and the branches there will be switched over to the new S/4 HANA system in the first quarter of 2023. After this, the system will be rolled out to other branches.
At Van Leeuwen we make use of multiple IT platforms that enable us to communicate with all parties in the supply chain through means of automated messaging. This enables us to receive digital customer orders, send out confirmations, supply delivery information in real time, and make certificates and invoices available. Further digitalization is essential for achieving optimal business operations. This is why, in 2022, multiple new EDI connections were realized with our customers, suppliers and carriers. In addition, further investments were made in automatically converting incoming e-mails with orders from our customers into sales orders in the SAP system (using optical character recognition). The use of these digital connections means less paperwork, a reduced chance of errors and faster data processing times. Furthermore, in 2022, we developed a project plan to integrate our various web portals and webshops into a single European platform. This plan will be further detailed and implemented in 2023.
Cybersecurity has our constant attention. Due to the increasing threat of cyber attacks, we further improved our security in this area in 2022. Security protocols are being tested and improved, and we regularly train and inform our employees about cybersecure behavior. Through means of information campaigns we constantly work on creating awareness among our employees.
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. 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 have been 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. In 2022, we received the global ISO 9001 certificate from LRQA. 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 2022, to reinforce the focus on safety and to further improve safety awareness. The number of accidents resulting in absence from work decreased by 22% over the past two years. While this is a positive development, we continue to aim for a further decrease. To increase the awareness of all our employees, they were asked to devote extra attention to safety by means of the globally organized "Steel Safety Day" in 2022.
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’s boundaries. In 2021, we started working on formulating our sustainability objectives. In 2022, we developed these in further detail and made 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 prominent suppliers we are investigating the possibilities of keeping pipes in stock that are produced with a reduced carbon footprint. As a leading distribution company, we aim to also devote greater attention to making distribution more sustainable. 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. In addition, we invest in solar panels installed on our own roofs. For example, in September, Van Leeuwen Zwijndrecht put a solar panel installation with a 5-megawatt peak capacity into operation. With solar panels covering a total surface area of 23,500 m², Van Leeuwen Zwijndrecht produces enough electricity in-house to provide green power to all of its branches in the Netherlands and Belgium.
In September and October, almost 2,000 solar panels were installed on the roof of Van Leeuwen Germany in Duisburg. We will continue to invest in solar panels for our companies over the coming years. Since mid-2022, all trucks at the branch in Zwijndrecht have been driving on HVO100, which means that all orders are delivered carbon-neutral.
Organization and people
To achieve our strategic goals and to continue to be a leading global 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, on our company's strategy, 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 70 branches and 58 different nationalities, illustrates our international scope. The Van Leeuwen Pipe and Tube Group's total workforce currently consists of 2,458 employees (2021: 2,429). 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.
The global rollout of Workday was completed in 2022. This global digital connection enables us to exchange data, knowledge and experience with colleagues even faster. In addition, a Workday Learning module has been incorporated, with a large number of e-learning courses and training modules, for example in the area of leadership and management skills, digital skills, safety and communication. 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.
After being unable to do so for a number of years due to the corona restrictions, this year we once again were able to organize various international meetings with our international management. This provides an excellent opportunity for team building and especially for sharing knowledge, exchanging information, aligning objectives and developing new initiatives together. In June, in Cologne, Germany, our global commercial management team came together to discuss market developments, in combination with the Tube trade fair in Düsseldorf and a customer event. With the theme “Changing World – Challenging Markets” we held our Buisleeuw Management Conference in Rotterdam: for the first time since the acquisition of Benteler Distribution in 2019, 75 managers from all of our regions came together to map out the strategy for the future together.
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.
In 2022, a network of compliance officers in the various countries in which we operate was established. Various training and awareness creation programs were rolled out. In addition, attention was focused on revising various directives and guidelines, such as the code of conduct for agents and the guidelines and protocols for gifts, sponsorships and donations. At the beginning of 2022, after the invasion of Ukraine, comprehensive due diligence reviews were conducted at customers and suppliers throughout the world to ensure that we, as Group, comply with the many international sanctions that are changing daily.
In 2022, we devoted 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 whistleblower directive. 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 reports of breaches were received by the Code of Conduct Compliance Committee.