NOM looks back: Asser lighter giant thrives now, but once almost had to close down
How are the companies NOM has worked with in the past actually doing? In this column, together with entrepreneurs, we look back at developments between then and now.
130 million lighters a year Swedish Match makes in Assen. Productivity is enviably high and margins are excellent. And that's despite the fact that not so long ago, survival was hanging by a thread.
A well-oiled machine. From the balustrade in the factory you have a great view of it. With crates full of colorful lighters, ready to be packed. Lines full of machines are molding, bending, cutting and punching like crazy. Further along, other specimens receive sleeves with cheerful texts, brands and drawings. Whatever the customer wants.
'That's what we are very good at here in Europe,' says director Pietjan Verhoog. 'Making specials. Demand-oriented products that require quick action.' Not that we are talking about small quantities here. At Swedish Match they make the famous Cricket lighter. Half a million a day roll off the conveyor belt, mainly destined for Europe. And these are no longer just the special, luxury copies. It is mass, the well-known lighters with flints and also those with electric igniters.
How different that is from about fifteen years ago. Back then they were seriously considering closing the Assen plant at the head office in Sweden. It was a time when China seemed like the holy grail as a production country, a time when there was little to be earned on making lighters. 'That was really the case,' says Verhoog. 'We had to take a hit to increase productivity and thus reduce the cost per lighter made.
When I started at the company in 2002, we made 160 million lighters with 250 people. Now we make 130 million with just under a hundred people. Working very smartly and efficiently is the only way to keep such a large factory going in a country like the Netherlands with relatively high labor costs. At first, the Swedish parent company did not see that happening.
Pietjan Verhoog did recognize the potential. 'We were just gaining momentum in getting the organization lean. We knew it could all be a lot more efficient. That was just beginning to bear fruit. We wanted to do everything we could to convince management of that. Verhoog contacted the trade unions, the municipality of Assen and NOM. All to seek advice and make the precarious situation clear. Gerard Lenstra can remember. The NOM project manager drank many a cup of coffee with Verhoog at the time. 'We went through some scenarios, looked at what we could do to keep activity here. We put down on paper exactly what the special qualities of the factory were and what else they could be used for.'
Working very smartly and efficiently is the only way to keep such a large factory going in a country like the Netherlands with relatively high labor costs.
Pietjan Verhoog, director Swedish Match Assen
New business strategies came up, ideas for working more efficiently, opportunities for new products, even the possibility of a management buyout was discussed. But above all, the tactic of stalling for time was thrown into the fray. Again and again, Axis sent reports on progress, on cost reductions, on increases in productivity. About the price that closing the plant would bring, too. Lenstra: 'That's what we said most of all then: you have to keep performing, keep showing how good you are. If you put your head down, the decision is easy.'
That tactic cost Verhoog's predecessor his head. Not cooperative enough, it was argued. But dragging it out saved the company for Assen. Meanwhile, "Sweden" had backtracked somewhat on the China strategy. Too much risk in terms of quality, delivery and ownership. The brilliance of the next idea to then just move everything to the factory in the Philippines was also waning. The extreme increase in productivity in Assen meant that the manufacturing cost per lighter in Asia barely exceeded that in Assen. In combination with the high transport costs, the factory in Drenthe was even more advantageous.
Verhoog: "Eventually, around 2008, the decision came that mass production would take place in our factory in Manila, but that R&D would remain in Assen, as would the production of specials. Because we just continued to perform better year after year, that was reversed after only two years. We now just do all production for Europe and sometimes beyond.'
And mass it is. A disposable item that is nevertheless quite intricately put together. With springs, a flint, valves, the body and more. Almost all these parts are made in Assen. Verhoog: "That fits in with our lean philosophy. In assembly, they have to have all the parts. As soon as a stock crate somewhere is almost empty, that part is made elsewhere in the factory. So that production can always continue. In order to do that as well as possible, we have also brought back work that we had initially outsourced.'
From near closure, "Assen" grew to become a profitable part of parent company Swedish Match. Pietjan Verhoog was even asked to apply his trick to the Philippines and Brazil, where the company's other two lighter factories are located. Things can change. Not that Verhoog is ready and satisfied now, by the way. 'There are plenty of challenges coming our way. Of course we have to deal with a decreasing number of smokers. But that is mainly in our small part of the world. Competition from low-cost Chinese manufacturers and the established order of lighter makers has always been in play. Lately, sustainability in particular has been added as a challenge. We have already launched a new type on the market made of recycled plastic and packaged in cardboard boxes. We want to move in that direction even more. It will always be paying attention and innovating.'
The lighter factory in Assen was initially owned by Poppell. Cigar trader Albert van Poppel from Arnhem developed the first disposable gas lighter under that name in 1957. It was so successful that a year later production was moved to Assen, where land and personnel were cheaper. The Poppell enjoyed fame for inventing a technology to keep the flame always at the same height, wind or no wind. That little part is still the blacksmith's secret. It is something that Chinese makers have never been able to copy.
Hence, their lighters require a dial to adjust the height of the flame. In 1981 Swedish Match bought the Poppell company, a sale that came about in part with help from NOM.