Poliet S.A.

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Poliet S.A.

21-23, rue des Ardennes
75940 Paris CEDEX 19
France
Telephone: ( + 33) 1.40.03.32.00
Fax: ( + 33) 1.42.03.12.90
Web site: http://www.saint-gobain.fr

96% Owned Subsidiary of Compagnie de Saint-Gobain
Incorporated: 1901 as Etablissements Poliet et Chausson
Employees: 20,000
Sales: FFr 27.09 billion ($4.5 billion) (1998)
NAIC: 42139 Other Construction Material Wholesalers

Long-time leader in the French construction materials distribution market, Poliet S.A. is also, since 1999, a subsidiary of French industrial conglomerate Compagnie de Saint-Gobain. Poliet acts as a holding company for businesses in several areas. The company’s chain of more than 700 Point P stores distributes construction materials and other products, including bathroom equipment and wall and floor tiles, chiefly to the professional craftsman and construction markets. For the do-it-yourselfer, Poliet offers its Lapeyre subsidiary’s chain of 75 Lapeyre and 50 GME warehouse stores, with a specialty in joinery products such as windows, doorways, and stairways. Together, Poliet’s distribution activities account for more than 50 percent of its annual sales, which reached FFr 27 billion before Poliet’s acquisition by Saint-Gobain. Poliet’s other activities include production of industrial mortar and related equipment, through its Weber & Broutin subsidiary; production of roofing tiles, through Industrielle de Tuiles; and production of industrial concrete, through its Stradal subsidiary. The acquisition by Saint-Gobain, for a total of more than FFr 15 billion, marks the industrial giant’s largest acquisition to date and gives Saint-Gobain a strong entry into the distribution market. For traditionally France-oriented Poliet, the acquisition may mark the beginning of a strong international growth drive, building on its parent company’s well-developed overseas networks. In 1999, Saint-Gobain, which posted more than FFr 100 billion in annual sales, increased its holding in Poliet to more than 96 percent.

Cementing the French Market at the Turn of the Century

If Poliet later became synonymous with building materials distribution in France, its origins lay in producing those materials itself. At the turn of the century, Paul Chausson saw his future in the production of concrete. Walking along the Saint Martin canals, Chausson predicted that concrete would become an important ingredient in building France’s industry, and, as more and more of the country’s population moved out of the cities, in building their homes as well. In 1901, Chausson, with the financial backing of Jules Poliet, founded his own company, Etablissements Poliet & Chausson. Poliet’s presence remained, in large part, financial; Chausson himself provided the company’s leadership until his death in the early 1930s.

Beginning with the production of lime, Poliet & Chausson quickly added concrete production and then plaster products as well. The company soon began to commercialize its own products, opening a number of stores. Oriented toward the professional market, the Poliet & Chausson stores sought to provide all of the materials necessary for construction, boasting its ability to supply builders everything they need from the foundation to the roof. The company also offered delivery services.

The devastation of World War I provided Poliet & Chausson with the opportunity for explosive growth. The need to reconstruct much of northern and eastern France brought about a strong demand for construction products and, especially, concrete, which was quickly replacing brick and stone as the building material of choice. From the end of the war until the start of the Depression era, Poliet & Chausson rapidly increased its production and sales. By the 1930s, the company was producing more than 1.7 million tons of cement each year, making it the country’s largest manufacturer of concrete. To support these production levels, Poliet & Chausson had grown into a network of nearly 40 production facilities, a distribution network that reached across the country and its own fleet of 250 barges for transporting its lime, cement, and plaster products.

If the postwar period had marked Poliet & Chausson’s greatest success, the company went into a decline during the Depression years, culminating in a near halt of activity during the Second World War. The company was hit hard by the death of Paul Chausson in 1933, at a time when the building market, crippled by the economic crisis, was collapsing, forcing Poliet & Chausson to reduce its production as well. The vast social unrest of the time and the rising strength of the French labor movement brought on more disruption in production. The buildup to and outbreak of World War II, the loss of labor to the war effort, the requisitioning of many of Poliet & Chausson’s factories for supporting France’s military, and, finally, the French surrender to Germany, put a temporary end to the company’s activity.

Growth in the Second Half of the 20th Century

The liberation of France in 1945 and the need to reconstruct a country once again devastated by war provided the opportunity for Poliet & Chausson’s rebirth. Production of cement, plaster, and related products resumed, and the company now began boosting its distribution network. By the beginning of the 1950s, Poliet & Chausson once again ranked as a top cement producer in France. Production levels, which reached one million tons in 1946, topped two million tons in 1952. The company also began boosting its distribution activities, with an eye toward becoming France’s largest distributor of materials to the construction market.

This goal was accomplished in large part by the 1960s. To achieve its objectives, Poliet & Chausson embarked on a massive acquisition drive, buying up a number of smaller, family-run businesses as well as larger competitors to complement its own network of construction material depot stores. Among the companies acquired during the period were Etablissements Toussaints; Comptoirs Industriéis et Commerciaux de Matériaux; Etablissement Escallier; and the group Trouillard. At the same time, Poliet expanded its manufacturing facilities, especially for the production cement and plaster products.

The heavy investments needed to sustain its rapid growth brought Poliet & Chausson into financial trouble by the end of the 1960s. In 1969, the company was forced to turn to its bank, Paribas, for aid. Paribas began building up its shares in the company, and by 1969 had taken over Poliet & Chausson altogether. Paribas replaced the existing Poliet & Chausson management; by the beginning of the 1970s, the new management, led by Jean-Pierre Germot, was determined to take Poliet into a new direction.

The company underwent a dramatic restructuring in 1971. Renamed Poliet, the company now became more or less a holding company, and its activities were regrouped under a number of newly created subsidiaries. In particular, Poliet’s activities were divided along its two main lines, distribution and production. Breaking from the highly centralized management approach of the time, Poliet’s subsidiaries took on a decentralized direction, with each subsidiary responsible for its own operations.

During the decade, the company also began to reenforce its distribution activities, now grouped under the Point P insignia. Although Poliet had succeeded in becoming France’s largest distributor of building construction materials, it was more or less absent from the joinery market and, especially, sales to the consumer home improvement market. Poliet remedied that deficit with the acquisition of Lapeyre S.A. in 1975, adding that company’s production facilities and retail store network.

On the production side, Poliet ended its cement and concrete production operation, turning that division over to the Société des Ciments Fran£ais, in exchange for a 25 percent share of Ciments Franjáis and FFr 70 million. Instead, Poliet concentrated on building up its building supply business, acquiring Weber & Broutin, the French leader in mortar products, and SAMC, specialized in gypsum production, helping to boost Poliet’s plaster and plaster block production operations.

Poliet continued its development during the 1980s and early 1990s, building up its network of Point P centers, while diversifying its operations into other manufacturing areas related to the building, construction, and home improvement markets. In 1984, Poliet acquired Vachette, one of France’s leading lock makers. By 1989, Poliet had grown to annual revenues of more than FFr 14 billion. The company went public, listing on the Paris stock exchange, while remaining majority controlled by Banque Paribas.

Key Dates:

1901:: Etablissements Poliet & Chausson is founded by Paul Chausson and Jules Poliet.
1930:: Production reaches 1.7 million tons.
1933:: Founder Paul Chausson dies.
1940:: Activities suspended during World War II.
1945:: Restart of production operations.
1952:: Production reaches two million tons.
1969:: Takeover by Banque Paribas.
1971:: Restructuring as holding company Poliet S.A.
1975:: Acquisition of Lapeyre S.A.
1970s:: Acquisitions of Weber & Broutin, SAMC, and 25 percent of Ciments Frangais.
1984:: Acquisition of Vachette.
1990:: Takeover of Lambert Fréres S.A.
1996:: Acquisition by Saint-Gobain.
1997:: Sale of Vachette.
1999:: Saint-Gobain increases ownership to 96.13 percent.

Two years later, the company’s revenues neared FFr 20 billion. Contributing to this jump in sales was Poliet’s takeover of Lambert Fréres, one of its chief rivals in building construction materials distribution. As part of this acquisition, Poliet turned more resolutely toward distribution, while also dropping its status as a holding company to become actively engaged in the direction of its distribution and manufacturing operations. The Poliet and Lambert distribution networks were regrouped under the Point P banner. The addition of the Lambert group added a new area of operations to Poliet, that of roofing tiles, through the Société Industrielle de Tuiles. At the same time, the company exited a number of areas, including selling off its share of Ciments Francais and shedding its plaster production, marking a final break from its original operations. By the middle of the 1990s, Poliet had successfully restructured itself into a diversified yet centralized industrial group with sales of more than FFr 22 billion per year.

Nevertheless, Poliet remained an almost exclusively French company. To improve its international status, especially in view of the approaching single economic market among European Union countries, Poliet began to reenforce its different operations through a series of acquisitions, including the 1993 acquisition of Spanish roofing tile maker Valforsa. That same year saw the addition of another roofing tile manufacturer, Tuilerie de Périgord, in France. The company also boosted its Weber & Broutin subsidiary with the purchases of Terranova, Stahel-Keller, and Promial. In 1994, after reenforcing the Lapeyre subsidiary with the acquisition of Les Zelles, Poliet moved into Italy, acquiring Cotto Toscano, a maker of roofing tiles. Poliet continued its acquisition drive into the mid-decade, buying up a number of companies, primarily in France, including Circé; Matériaux des Chesnez; Kieffer; Yonnaise de Bétons; Bétons et Matériaux du Maine; Stradal; Brunet Matériaux; Fermat; and Sogepal. Poliet boosted its Point P subsidiary, by then posting some 60 percent of its annual sales, with the acquisitions of Millecamps et Vanderperre and of the Socimat group.

Throughout this period, Poliet not only registered consistent growth, but consistent profitability as well, despite an extended financial crisis brought on by an international recession and an overbuilt construction market. If Poliet had weathered the economic storm, however, its largest stockholder Paribas faced financial problems. In 1996, Paribas agreed to sell Poliet to Compagnie de Saint-Gobain, one of France’s largest and oldest industrial conglomerates, with diversified interests around the world. With the Poliet purchase, Saint-Gobain hoped to protect itself from market cycles in its other business areas, particularly with the addition of Poliet’s strong distribution division. The total purchase price of FFr 15 billion, plus an additional FFr 2 billion in debt, marked Saint-Gobain’s largest acquisition ever and boosted its own revenues past FFr 100 billion. As part of the purchase arrangement, the Poliet purchase was to take place in several steps and was not completed until January 1999, when Saint Gobain increased its ownership of Poliet to more than 96 percent.

After selling off the Vachette lock manufacturing subsidiary to Sweden’s Assa Abloy in 1997, Poliet and Saint-Gobain looked forward to exporting Poliet’s distribution expertise overseas. Despite its interest in developing international operations in the early 1990s, Poliet distribution activities remained almost entirely focused on France. Saint-Gobain, on the other hand, had concentrated on building up its production and manufacturing expertise—until the Poliet acquisition, its distribution operations had remained limited to the United States market. With the joining of Saint-Gobain’s financial clout and strong international network of operations and Poliet’s century-long expertise in the production and distribution of building materials, Poliet began to make plans to become a name recognized worldwide in the 21st century.