Hyva: Borderless business

In a globalised economy, international expansion has become the strategy of choice to maintain competiveness and tap a new source of revenue. Dutch company Hyva is a prime example of how to take a global business model and localise it successfully around the globe.

Proving that international business and local expertise complement each other, Hyva has found a unique way to adapt to an ever-changing technological, demographic and economic landscape. Specialised in providing lifting and tipping technology for the international commercial vehicle industry, the company has developed through international expansion from a humble Dutch business into a global corporation that achieved 20 per cent sales CAGR between 2001 and 2008. But, the story of success began long before the concept of globalisation.

When Hyva was founded in 1979, it entered a pioneering phase that has seen a great deal of investment and expansion. By 1983, the young company already had a turnover of €18 million and began to expand into France, Belgium, Germany and the UK. But, it was the introduction of a new hydraulic cylinder design and the acquisition of a Dutch crane company that boosted Hyva’s expertise and product range. As a result, the 1990s saw a continued period of internationalisation, securing an “early entry advantage” in Malaysia, Brazil, India, Thailand and Poland.

Today, it has become an example of how such early entry into foreign markets can pay dividends, deriving more than 70 per cent of sales from emerging economies like China, India and Brazil. Under the command of Asian investors, Unitas Capital and NWS Holdings Limited, it is now set to drive business revenues beyond €1 billion.

The new investment in Hyva – a leveraged buyout by Hong Kong based Unitas Capital and NWS Holdings – is a significant development for the 32-year-old company. Financing of the debt portion of the deal entirely through a €260 million high-yield bond issue is a first-of-its-kind in Asia. It will give Hyva more flexibility in financial management, but also conserve cash within the business for day-to-day operations.

The move will also mean the new partners will bring improved access to potential customers in mainland China and additional expertise in business processes such as supply chain, procurement and localisation of production. Therefore, it is just another example of Hyva’s unique globalisation process, where local growth opportunities stimulate the company’s global performance.

But, how does the Hyva system work? “At Hyva, innovation is both bottom-up and top-down. In each subsidiary local entrepreneurial initiatives are encouraged and a high level of freedom is delegated,” says Louwrens Dijkstra, former CEO of Hyva, who was succeed by Brice de la Morandiere (46) in September. Both agree, “The head office role is one of validation, of steering but not controlling. Innovation initiated from the top of the company is most likely to be in response to a regional or global market trend or a technology shift.”

After all, innovation and improved profitability are mutually dependant. “That’s why we focus on successful products and embrace a right-first-time mentality which engenders positive energy and pride in our work,” says R&D Director, Jacob Biemond, who cannot conceal his excitement when talking about the Hyva product range. “This excitement comes from seeing our product succeed in global markets, in some of the toughest conditions on all continents, from the snowfields of Siberia to the deserts of China.”

For Biemond, innovation is not just about perfecting technology. It is also about increasing reliability, ensuring minimal downtime and providing a maximum return on investment. “Now that Hyva is active on every continent, our product management is working daily to specify customer needs and translate these into requirements and priorities for engineering.”

Trailer applications, for example, usually require a long cylinder to reach the required tipping angle to discharge the load. “We have understood that only telescopic front end cylinders can offer the optimum solution to provide the required tipping angle and lifting capacity, but at the same time, they have to contribute in the vehicle’s stability,” Biemond says. “That’s why we invented a front-end cylinder that is able to resist severe side loads, but at the same time has a low weight and demands 15 per cent less oil volume.”

Retaining a share of more than 30 per cent and counting in the telescopic front-end cylinder market, the Hyva concept has proven itself in the field. Nonetheless, there is no sign of gearing down. The company’s Asian business, for instance, is experiencing an on-going boom, with China producing more than 100,000 hydraulic telescopic cylinders in 2010 alone. Overall, steady growth in cylinder production from 1981 to 2005 was followed by a period of exponential growth since 2006.

In 2006 production was three times that of 2005, a cumulative total of 500,000 was reached in 2007 and cylinders are now being produced at the rate of 4,000 to 5,000 per week – and counting. According to Hyva officials, the company’s two millionth cylinder will be produced within the next three to four years.

“Demand for hydraulic cylinders will increase, and the expansion of our capacity for China and India is already finished,” says Dijkstra, explaining that the current boom is a result of Hyva’s early interest in local markets and, last but not least, a well-designed product.

Hyva’s patented, modular design allows for minimal production time, while the construction itself is set to endure even the harshest work. The long tube overlap, for instance, ensures maximum resistance to bending; and due to progressive tube diameters with improved nesting, the Hyva hoist is able to lift and lower at a rapid speed. And since no special tools are required to open the bottom, maintenance is easy – a key advantage if you want to succeed at a global scale and continue to expand.

“Looking ahead ten years, Hyva will certainly be a much larger company – possibly three times its current size – with a broader global footprint. It will be much more vertically integrated and, in addition to hydraulics and commercial vehicles, it will have established market-leading businesses in cranes and environmental services,” says Dijkstra.

To communicate Dijkstra’s mission statement to a global workforce of more than 2,200 employees, Hyva introduced seven corporate values – catering for each of the 13 languages in which it operates. These corporate values represent what Hyva stands for as an operating business, as an employer and community player.

Formulating binding values may be a necessity of a diversified, multinational company, but for Dutch company Hyva, it is about preserving the company’s pioneering spirit in an ever-changing, globalised environment. “Our seven corporate values help us stay focused and keep up the pace now that Unitas and NWS joined the team,” says Dijkstra.

However, it is not only entrepreneurial spirit the Hyva management committed to. They also signed on passion, trust, respect, integrity, empowerment, and social responsibility. “We are fully committed to building lasting quality relationships with our clientele around the world. That’s why we encourage our people to take initiative and be accountable for everything they do,” says Dijkstra. After all, Hyva experienced first hand that globalisation begins at a local level.

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