Operations
Optimal logistics and operations are essential for us to be able to realize our promises to our customers. Our logistics activities can be grouped into three main functions. Distribution from stock is one of these main functions. Here we make a distinction between sales from freely available stocks and sales from dedicated customer stocks. An optimized network of stock-keeping locations with a broad product portfolio and the mutual exchange of stocks enhances our competitiveness in the market.
A second function is the custom treatment and processing of pipes and pipe and tube products: ranging from cutting, shot-blasting and red-leading to bending, drilling and deforming pipes and tubes using a robot-supported multi-step processing. In Europe we have over 316 machines, including more than 230 saws, that enable us to provide virtually any custom treatment.
The third function concerns projects. Products then go directly from the mill to the construction site. However, often they are also shipped from the project stocks in our warehouses, where the order streams are consolidated, and products are regularly subjected to minor treatments.
Investments in our network
In order to further improve service from stock to our customers and to further optimize production and treatments, we constantly invest in our storage and production facilities. This way we not only aim to improve service delivery but are also focusing on improving productivity. The objective in this respect is to increase the average output produced per employee by improving our business processes and optimizing our tools.
In the warehouse in Zwijndrecht, the Netherlands, work on the Monorail, a 315-meter long, automated transport and sorting system, continued throughout the year. This system makes it possible to more efficiently and safely load our outgoing transport flows, so that our hub in Zwijndrecht can offer a better and more effective service in the Netherlands and surrounding countries. The project was completed at the beginning of 2024, and the first orders are now being sorted. We are proud that as a leading distribution company we have been able to commission this system, which is unique in the world. This not only results in more efficient business operations; it especially demonstrates what steel distribution and the way of working will be like in the future.
Our company in Vyškov in the Czech Republic completed the expansion of its warehouse and the construction of a fully automated honeycomb storage and order picking system. The expansion has increased the size of the warehouse to 20,000 m² and its storage capacity to 10,000 metric tons of materials. This enables the branch to fulfil its hub function for Central Europe even better. In June, the facility was commissioned in a festive atmosphere in the presence of the Supervisory Board, the Management Board and Executive Board, and the Czech team.
Two warehouses are being integrated in Belgium. The bar steel stocks of our company Wauters will be transferred to the warehouse of the branch in Vilvoorde. This primarily benefits logistics services and transport. It is now possible to better combine various materials for delivery to the market. The integration also leads to better logistics cooperation between Vilvoorde and Zwijndrecht. Storage and the product portfolio are also optimized here, as a result of which the logistics process can be organized more efficiently. The integration is in part made possible because the Monorail in Zwijndrecht has been put into operation. Another part of this integration is the consolidation of the inventory of all fittings and flanges at a central location in Zwijndrecht. As a result, in Zwijndrecht there will be a stock portfolio with these items for our customers that, in terms of breadth and depth, is unique in its kind. Through means of optimized logistics, these products can be delivered fast within all of Europe and beyond.
In December, the OneHalmstad project of our Swedish branch Heléns in Halmstad was completed. The objective of this three-year project was to consolidate all activities in Halmstad at a single location. The warehouse was expanded for this purpose, and a large number of production machines was relocated in order to optimize the flow of materials. Aside from the logistics integration and optimization, a new regional head office was also constructed. The festive opening took place in December. All activities for Sweden were consolidated in this new office and employees now have access to an optimal workplace.
To date, Van Leeuwen has invested over 6.5 million euros in green electricity on its own roofs, including in the Netherlands, Germany, Romania, Denmark and Australia. The goal is to further invest in solar panels over the coming years, so that we can fully provide all of our branches in Europe with in-house-generated green electricity. Toward the end of 2023, we had installed 13,500 solar panels on our roofs with a 6 million kWh capacity.
IT developments
The branches in the United Kingdom switched over to the new SAP S/4HANA system in the first quarter of 2023. This implementation, under the '1Leeuwen' banner, is an important step in enabling Van Leeuwen branches and the former Benteler Distribution branches (acquired by Van Leeuwen at the end of 2019) to work in standardized ways. As a result, key organization and process-based synergies have been achieved. Following implementation in the United Kingdom, work has started on preparing for the system's implementation in our Kindlimann branches in Switzerland. Kindlimann is expected to start making use of the SAP S/4HANA system in the third quarter of 2024.
Van Leeuwen has also started to implement a new web portal, including a web shop, where customers can find information about our products, and their orders and invoices, and where they can order products. This new web portal provides customers even better insight into their business transactions with Van Leeuwen. The implementation of the web portal is linked to the implementation of our SAP S/4HANA system. The United Kingdom is expected to be the first country to make use of the web portal over the course of 2024.
We are constantly working on keeping our systems up to date. For example, in 2023, we provided branches working with SAP Business One with the latest version of this system and we implemented the latest Windows Server versions on our servers.
Cybersecurity continues to have our constant attention. In 2023, we further improved our cybersecurity. Through means of penetration testing (pen testing), we tested the level of security of our systems landscape from the perspective of an ‘attacker’. Where necessary, we have implemented additional security measures. An important aspect in this respect is the risk awareness of our employees. Through means of information sessions and training we constantly work on creating awareness among our employees.
Quality
Our customers are confronted with increasingly stricter requirements relating to quality, safety and sustainability. These are areas to which Van Leeuwen devotes constant attention as well. Every year we set high quality standards for ourselves that are translated into objectives. We regularly monitor progress on the basis of Key Performance Indicators (KPIs) and internal audits. Our Approved Manufacturers List (AML) only contains suppliers that have been approved by Van Leeuwen following a strict selection process.
Quality awareness has a long history at Van Leeuwen. We have been working in accordance with ISO standards for tens of years. The ISO 9001 standard and the associated certificate form the basis of our quality policy. In 2022, LRQA renewed the global ISO 9001 certificate. With regard to sustainability and an energy-conscious approach to work, we adhere to the international OECD guidelines and act in accordance with the ISO 14001:2015 standard. Branches focused on the automotive sector are IATF 16949 certified. Van Leeuwen Essen is the first German trade company to be awarded the ISO 19443:2028 certificate (quality management system for the nuclear energy sector’s supply chain).
Safety
We pursue an active ISO 45001:2018-compliant safety policy. We devote constant attention to the health and safety of all of our employees. A series of group procedures supports the Group’s safety system. Safety campaigns were conducted in 2023, to reinforce the focus on safety and to further improve safety awareness. The number of accidents resulting in absence from work decreased by 37 percent in comparison to 2022. While this is a positive development, we continue to aim for a further decrease. To increase the awareness of all our employees, they were again asked to devote extra attention to safety by means of the globally organized ‘Steel Safety Day’ in 2023.
Sustainability and Corporate Social Responsibility
As an internationally operating family business with a history dating back 100 years, we aim to be a financially healthy company. In addition, we naturally assume our responsibility for the environment, people and society. We are carrying out our business operations and implementing our growth plans increasingly more sustainably. In 2022, we established our sustainability strategy with our goals for the upcoming years and undertook a number of large-scale initiatives. In 2023, we expanded these activities, with visible results.
We aim to be frontrunners in conducting sustainable business in the value chain and creating a pleasant and sustainable workplace for our people. We assume our responsibility in limiting global warming. Our top priority for the coming years is therefore to work on developing carbon-neutral business operations, with the aim of being the most sustainable pipe and tube distributor in the world by 2030. Together with our partners in the value chain, we focus on the production of innovative, carbon-free or low-carbon pipe and tube products. In Zwijndrecht and Duisburg, we currently have pipes in stock that have been produced with a reduced carbon footprint, and we are working on a product portfolio under our own brand name. Moreover, we continue to invest in greener methods of distribution, such as transportation by rail or water instead of by road, stocks kept closer to the customer and deliveries using fuller trucks. In addition, we continue to invest in solar panels installed on our own roofs.
A dedicated sustainability team
In the meantime, all Van Leeuwen regions worldwide have committed to our sustainability strategy, and each region has a sustainability officer. A special sustainability team ensures that all actions and initiatives are rolled out worldwide. An important part of our sustainability strategy is to build up and share our knowledge about sustainability within our organization. In this respect, we can benefit from the size of our company and take increasingly larger steps over the coming years.
Van Leeuwen Education Foundation
In addition to (local) donations and sponsorships, Van Leeuwen’s goal for some time has been to do something more structured for society. This is why in 2023, it was decided to establish the Van Leeuwen Education Foundation. We believe that good education is the key to improving someone’s opportunity for a better position in society with prospects for the future. The Van Leeuwen Education Foundation will devote itself to promoting equal opportunity for everyone by supporting initiatives that facilitate access to quality education.
People and organization
To achieve our strategic goals and to continue to be a leading, trendsetting specialist in steel pipes and tubes worldwide, we rely on a large team of skilled and driven professionals. Our People Strategy is focused on the development of our people and on embedding a learning culture. By stimulating people development using a structured approach and digitalization, we contribute to the company’s strategy. Van Leeuwen aims to be an attractive employer, now and in the future.
Our presence in 32 countries, with 70 branches and 58 different nationalities, illustrates our international scope. The Van Leeuwen Pipe and Tube Group's total workforce currently consists of 2,469 employees (2022: 2,458). Women comprise 30% of the total workforce, men comprise 70%.
With the Workday HR system, HR in 2023 supported the company in the area of online learning, with a standardized recruitment process and with performance management for all Van Leeuwen employees worldwide. In 2023, we defined key HR KPIs (such as staffing levels, personnel turnover, gender ratios, outstanding job openings, applications and absenteeism rates). We monitor the results using a monthly HR dashboard that is shared and discussed with regional directors for the purpose of identifying actions and improvements.
Van Leeuwen is an equal opportunity employer. We continue to aim for balanced gender and cultural diversity levels within the various operating companies throughout the world and in our management teams. The composition of the Management Board and the Executive Board did not change this year and consists of five men and one woman. As of January 1, 2024, a new female member was appointed to the Supervisory Board, as a result of which the Supervisory Board now consists of four men and one woman. We continue to actively promote balanced gender (at least 33% women) and diversity levels on the basis of a proactive recruitment process.
In November 2023, the first worldwide Van Leeuwen employee engagement survey was conducted. The return rate was 76%, including more than 13,000 responses from participating employees. The average engagement score was positive, and the evaluations of the various themes and extensive comments help us to further improve as employer. The results will be shared with employees, and action plans will be defined for implementation during 2024. The next employee engagement survey will be rolled out in the third quarter of 2024, as part of our recurring employee engagement measurement process.
In 2023, as Van Leeuwen, we benefitted from a solid HR foundation, which we developed through means of structured processes and innovative HR tools. The feedback and input from the fully digitized employee engagement survey mentioned earlier, helps us identify the next steps in supporting our management and employees as part of our People Strategy. This way we ensure we can continue to attract, retain and develop outstanding talent with the skills we need for the future.
Compliance
Conducting business fairly and transparently is a core value at Van Leeuwen and a shared responsibility for everyone in our company. The core task of the Compliance function at Van Leeuwen is to support the company in estimating, monitoring and mitigating compliance risks. Key aspects in this respect include international sanction and export control rules, agents, competition, conflicts of interest and privacy.
The Compliance function, managed by the Head of Compliance, is supported by a global network of regional compliance officers. The compliance framework was further expanded in 2023, in part through training for regional compliance officers to further professionalize the compliance, privacy and control networks within our operating companies.
In 2023, various measures were implemented to comply with European anti-dumping rules, the rules concerning various privacy-related topics were refined and key steps were taken to better manage conflicts of interest. As a consequence of the war in Ukraine, international sanctions against Russia were considerably expanded. Additional instructions and procedures were developed to comply with the specific sanctions.
Various training courses were developed, including compliance training for agents and courses to focus further attention on the Speak Up procedures. In the context of sustainability, a Supplier Code of Conduct was developed that includes the key principles Van Leeuwen’s suppliers are expected to comply with.
