An SME cannot afford to get it wrong
How an owner of an SME looks at his CEPE membership
Recently, an interview was held with Mr. Peter Rieck, owner of a UK-based SME.
Mr. Rieck, you are Managing Director of a family-owned SME. How would you describe your company?
Sonneborn & Rieck was founded more than 100 years ago as a manufacturer of lacquers for wood, particularly pianos. The Company produces innovative, high technology coatings and has a well-earned reputation as a global problem-solver and provider of coatings solutions for industry. More often than not, its finishes are custom made to suit precisely the needs of leading manufacturers in the automotive, teletronics, communications, furniture, and a variety of other industries to which its technology, skills and knowledge are particularly aligned.
What do you think is important for the paint industry in the future?
Europe is increasingly becoming a single market with some of the world’s toughest regulations. This continuous march of harmonisation through regulation and integration is leading to a large number of changes in both the way we operate and the way we work with our markets and customers t meet their demands.
In that sense we, like most SMEs, really need core information about what is happening so that we can prepare for change early. We find that much of that vital information comes from our membership of a pan-European Association like CEPE.
On the other side of the coin, as an SME we also need core representation to make sure that our interests are looked after at a European level. To achieve the greatest impact for our views in Brussels, and be heard by the bureaucrats, commissioners and politicians the message has the voice of our industry has to be delivered at a European level, beyond national boundaries. Now that we have direct membership we can contribute both individually and collectively ensuring that we have the strongest possible representation, something we only had indirect access to before.
Paint and printing ink companies in Europe have two memberships with Associations to represent their interests, one with a national Association and one with the European Association CEPE.
Why should a small or medium sized company get involved in European affairs? Isn’t that too far away from the everyday business?
As an individual you may choose to say that Europe does not affect you, that you are not interested and that others will decide for you, but this is a personal view. From a business point of view however, even if you are a small paint company, Europe is a single region and increasingly a single market. A lot of private businessmen are inclined to let their personal views of Europe influence the way in which they look at trading across national boundaries which can have a negative effect on their approach to business. With Europe having such an impact on our businesses and change happening increasingly quickly we need to have direct access to both European and local information at the same time to make the best business decisions quickly.
Something a lot of people forget is that SMEs can’t afford to get it wrong, they do not have the financial critical mass to finance too many mistakes.
This in my opinion means that we SMEs need effective support from both a European organization like CEPE and a national organization like your own National Association. I believe that if there are too many layers between me and the source of the information, if I don’t get the information about what is happening at European level direct from a European organisation, then by the time it reaches me, the information becomes an interpretation with someone else’s subjective view added to it often raising more question than answers, making it difficult to see clearly how my business should react.
Large companies have and can afford access to good resources, both inside their organisations and externally, to do the work for them and make sure they get everything right. An SME needs help to understand what changes he has to make well in advance so that he is well prepared and able to make the best decision for his business; it is too late to start preparing by the time the legislation comes into effect. If you don’t know what is happening until it has become law, at that point there is a huge strain on an SME, much more than it is on a large company. It is therefore a major advantage to an SME to be hooked direct to these critical sources of information through CEPE. In many ways, you can get ahead of the game; you can see what is coming. Just as if you are playing a sport, anticipation is everything, if you cannot see ahead you cannot anticipate, if you cannot see ahead, usually you have an accident.
Can you illustrate with some examples the legislative activity of CEPE and what are the benefits for you?
A good example is changes in labelling. Some may argue that your local, national association can do something for you.
My company has invested a huge amount of money in getting translations of all labels. If there is a change in the regulation it is a big cost to change again. If you don’t anticipate that, than you can’t plan the expenditure in and the last thing you want is to have delivery of your products disrupted because no one can read the labels. Seeing the legislation being changed at the earliest point is critical to keeping costs under control. Typically these changes are seen at a European level first when the legislation is under review in the European Commission. The SME can pick the knowledge up at that point through CEPE and track it through to his National Association as it “goes local” through his National Government. This is very much an issue for the European level.
Another good example which can be seen in the CEPE Signal, the monthly electronic Newsletter, about the inclusion of information of our suppliers in the safety datasheets which was a requirement of REACH. Originally we had to make public not only the substances we used in our products, but also the supplier – effectively giving away our intellectual property that we had invested in. This is what was called the REACH 4-digits issue. Businesses didn’t understand that they were giving away their core knowledge and product information and that allowing the 4-digit supplier code would mean that we could not retain some degree of confidentiality. No change to this would be a complete disaster. The question to ask is if manufacturers would be happy to have their entire formulations and access to their raw material suppliers laid down in black and white in front of their competitors. Of course you certainly would not be happy with such a situation. Thanks to CEPE representing the European view of our industry and working with other European groups we have seen the supplier code requirement removed from REACH registration.
There is a further example in the Product Directive which influences what you can and can’t sell to small installations. The Product Directive has the potential to cause considerable reformulation of our products even requiring us to run different product ranges to do the same job in different circumstances. The cost of reformulating, of the selling of these products to existing customers is a very big expense to a small company and it is not that easy just to reformulate. It is also a big drain on physical resources, not just financial ones. This issue affects SMEs more than most companies because it is an area where they have major sales. At this moment CEPE is pushing hard on our behalf to secure change to the Directive which started life aimed at decorative finishes and has now spilled out onto all of us.
There is also a growing pressure coming up on “sustainability” and there will be a tendency for Brussels to legislate what we should be doing in terms of the chemicals we can use and how we use them. This will have a big impact on SMEs and CEPE will need to know our views in order to make sure that we can deal with this.
To the SME timing in all these situations is essential. Knowing about up and coming issues and legislation early can make all the difference. If you would lose 4 or 5 months of potential development time, you could find yourself unable to supply as in the case of cobalt driers (a European issue) whose designation will probably change next January; if you don’t decide what to do now you may find yourself out of business because you lost your major customer.
By looking at the various examples you gave, we can see that CEPE is driving important legislative aspects of your business life .Why then do you still need to be member of a national Association?
I am a member of BCF, the British Coatings Federation. While here in the UK the National Association is running a number of local initiatives which are not purely legislative, we must not forget that there is an important requirement to have a single voice at European level to influence the directives. CEPE is a core source of information of what is going to happen in the future, it is a collecting area for the industry’s view in order to influence the politicians and the bureaucrats on our behalf. The political structure of Europe is incredibly bureaucratic. There we need that representation on a pan-European basis for legislation.
But there is an equally important requirement to have a local voice that has an impact on legislation as applied by each country’s government and that is something CEPE is not equipped to do and cannot possibly handle. If you add to that non-legislative activities which can range from assistance with inspections, interface with local authorities, training and in some countries even to negotiating wages and salaries, these are things again way outside CEPE remit, it has never been set up to look at them and has not been designed to deal with this. In fact there is quite clearly a fundamental difference between roles of CEPE and the National Association.
Quite simply, I cannot see a situation where these two complementary bodies would in any way cease to exist – we SMEs need them both.
As a conclusion what is your message to your “fellow” paint manufacturers?
Make use of CEPE, it is a core source of information, a powerful voice for the whole industry that is listened to in Brussels, it is a real benefit. And for SMEs, CEPE puts the SME on equal terms with the largest players in the industry. CEPE is valuable help and support for us all, because we can’t afford to stand still in this rapidly evolving world.