Saica will change the figure of its presidency in a year. The person leading the major Aragonese company will be Susana Alejandro, the first woman to hold the position in the paper company, replacing her brother Ramón Alejandro. With over 10,000 employees, a presence in more than 13 countries, and a turnover of 5.427 billion euros at the end of 2022, the challenge is significant for Saica’s new president, who will assume her role on July 1, 2024.
The announcement of Ramón Alejandro’s farewell as president of Saica was marked by a phrase: «there are highly prepared people behind it.» How do you approach the challenge?
Ramón has not said goodbye yet, he has announced his departure. The transition will not take place until July 1, 2024. The only change that has occurred is that I have joined the Board of Directors of our holding company, and on July 1, 2024, as the Board of Directors distributes the positions, Ramón will step down as president and the board will appoint me as the president. I assume this role with great enthusiasm because I believe I am fortunate to lead a project with shareholders who are eager to reinvest heavily in the company. We invest over 300 million euros per year in total, including maintenance capex and strategic investments, such as the recent acquisition we made in Italy. We have a remarkable product, corrugated cardboard and flexible packaging, and we have a wonderful team with whom I have had the privilege to develop my professional career. Therefore, I believe we have all the keys to success.
Saica has stringent entry requirements for family owners to assume leadership positions in the company. They have an advisory committee to validate their suitability. Could you explain the protocol?
We have a family protocol that governs the rules between the family and the company. I believe it is essential for a family business to have such a protocol. I always say that the protocol protects the company from the family. One of the bodies involved is the advisory board, which becomes active when a family member is among the finalists in a selection process. The criteria for a family shareholder to enter the company include an available position, prior experience in another company, and being among the finalists in the selection process conducted by an external selection firm, with which we collaborate. Once a family member is among the finalists, the advisory board, in which the family is in the minority, becomes active.
I went through this process myself. I was the first non-engineer woman to enter our graduate program, which is a management development program. At that time, all the women at Saica, who were all administrative staff, wore uniforms, and they used to ask me, «When are they going to give you a uniform?»
How do you preserve Saica’s family character? How do you avoid the temptation of offers to buy stakes in the company from other companies or investment funds?
I believe that family unity has been fundamental. Currently, the majority of shares are held by the second generation. My mother is the eldest at 88 years old this year, and the youngest member is around 60. It is a natural progression for the shares to pass on to the third generation in a few years. As the branches of the family dilute, it becomes more challenging to maintain family unity.
At this moment, the second generation acts as the glue. I always say that my parents generously put the shares in my name, but legally they belong to me, not morally. I wouldn’t do anything with those shares without my mother’s blessing. In the short term, the second generation plays a vital role, and the big challenge is to keep the family united, which is essential for Saica to remain a family business.
Within the family protocol, we have several mechanisms in place. For example, Saica Future, a group from which I was expelled many years ago because you have to be under 40 years old to participate. They organize recreational activities such as a paddle tournament or go-kart races. We also have a training committee that organizes interesting talks on current topics.
The shareholders gather on a Saturday morning to attend these talks, and then we have coffee together. I believe that familiarity breeds affection. The family assembly is a meeting we organize once a year, a weekend where we take the shareholders to visit one of our plants and spend time together. Maintaining family unity is a key aspect.
The issue of funds is related to our strong balance sheet. If a significant family branch with a considerable weight wants to sell, we have a liquidity committee. We evaluate the company’s value every year, and the company itself repurchases up to a maximum of 1% of the shares.
This allows someone who, for specific reasons, wants to sell a minority stake to do so. It is a different scenario if an entire family branch wants to sell a 25% stake, but that has not been raised so far. As for financing expansion projects, we have a very solid balance sheet, no debt, and 1.5 times the EBITDA in cash. Therefore, we can undertake the growth projects outlined in our strategic plan.
With 89 shareholders, all from Aragonese families, how challenging is it to manage the sensitivities and interests of all of them? You will have to act as a bridge between the shareholders and the company’s executives.
Many years ago, around 2006 when we revised the last protocol, we created the family office, which focuses on adding value to the shareholders beyond dividends. Yesterday, I sent an email because my car broke down and I needed to take it to the junkyard, but I didn’t have time to look for one. The person in the family office takes care of these tasks, which they may have already done for other shareholders. They measure the conditions when negotiating a bank loan, or they take advantage of the telecommunications rates that Saica has for the shareholders.
This way, we prevent direct requests from bombarding the executives and distracting them from their work. The executives are there to serve the shareholders, of course, but they must also create value for the company.
Innovation is the DNA of Saica. What sets the company apart in terms of its processes?
I believe that it doesn’t matter what we are doing; whether it’s recycling waste, manufacturing paper, producing cardboard boxes, or creating flexible packaging, innovation must be one of our main drivers. Although it may seem that you cannot innovate in the production of cardboard boxes, when you delve into the details, you realize that it is possible. Innovation is one of our core values, along with two others, and it permeates the entire decision-making chain. In fact, we have a highly robust R&D department that provides cross-functional support to the four business areas.
The international dimension of Saica from its operations center in Burgo de Ebro is expanding increasingly to countries such as France, Portugal, Italy, the United Kingdom, Ireland, the United States, and Turkey. Is there a limit to expansion? Where do you see Saica in 2030?
We currently have operations in 11 countries, primarily in Southern Europe, but it extends beyond that, including Luxembourg, England, Italy, France through Iberia, and Ireland. We also have operations in the United States, where we recently started a factory, and in Turkey. The secret of a family-owned company is for the business to grow faster than the family. My mother has 22 grandchildren, and we are growing at an average rate of 10% per year, which is great but also puts a lot of pressure on the organization. Not just in terms of workload but also in terms of professional growth.
The challenges we faced 10 years ago are completely different from the challenges we face now. Currently, we fill 75% of positions internally. Saica is moving forward, and the organization is running to catch up. If we want Saica to continue being a family-owned company from Aragon, which is what all the shareholders want at the moment, we have to grow sustainably.
By 2030, I envision Saica having achieved our strategic plan. Firstly, a significant environmental aspect is decarbonizing our factories. The main challenge lies in paper manufacturing, which is highly dependent on thermal energy and consumes a significant amount of gas. We have managed to find technological solutions to decarbonize our French factories by 75% using biomass plants. We also have a hydrogen project in England that would allow us to achieve a 10% decarbonization. However, we face a major challenge in Spain, as we don’t have access to biomass. This is an important focus of our R&D department as we work towards 2030.
The second project is the implementation of two new paper machines, one in Europe and another in the United States. The project in the United States may progress at a slower pace, but we are advancing in that direction. These would be two new paper machines, and since our current factories cannot grow any further due to their age, we have realized that our average size compared to our competitors is somewhat small. Therefore, we are engaging in operational merger projects.
For example, in Scotland, we merged two factories in Edinburgh and Glasgow. We have recently approved an investment of 127 million euros in Catalonia because we had two factories in Barcelona, and for the past 20 years, we have owned a piece of land where we plan to merge them. This will provide our factories with the efficiency they require.
The three pillars would be decarbonization, growth, efficiency, and customer orientation. To serve the customer, we must deliver cardboard boxes when they need them, and that often requires having a warehouse. In Burgo de Ebro (Zaragoza), we have invested 60 million euros in a fully automated paper warehouse, allowing us to focus on customer service.
What I believe is that it is unfortunate that, in order to receive the shares of a family-owned company and benefit from the extension we have, one must pass away. Life expectancy is increasing, so why should the child inheriting the management of the company have to wait until they are 60 or 70 years old to inherit the shares while they are already running the business? Many European countries have tax exemptions when children are involved in the management, allowing for the transfer of those shares. I think this would help maintain companies as family-owned businesses and ensure that decisions continue to be made here.
When Saica represents the brand outside of Spain or Europe, how do you think Aragon is perceived? How can we enhance the image of our community?
Since we produce an industrial product, we are well-known within the industry. We are not a consumer product, and we do not advertise on television. However, as a result of opening our factory in Cincinnati, Ohio, where we started producing boxes a year and a half ago, we established a partnership between Aragon and Ohio. We had an event where we exchanged medals between the governor of Ohio and the president of the autonomous community of Aragon. This was a way to raise the visibility of the Aragon brand.