Think modular buildings and most people might picture a construction site. It’s an image that Bertrand Quenot, Algeco Europe’s President, is keen to expand. “Modular buildings began on the construction site a long time ago, but what people don’t know is that the construction activity now represents only one third of our revenue.” These days, the company’s modular buildings can be found in a wide variety of places, used in the creation of offices, schools and hospitals.
For example, when enrolments in a primary school in the north-west of Paris peaked at 350 students for the 2014–15 school year, it left the school struggling to know how to accommodate the increase. The conclusion for handling the overflow was to create 3 new recreation rooms. The brief was challenging: the school was cramped and access difficult. Any construction could not disrupt the traffic, including public transport. Handed that challenge, Algeco then had 15 days to deliver a solution before the start of the school year.
By 25 August, it had successfully put in place 6 30-square-metre modular units, ready to receive the annual influx of students. The units met all the necessary comfort and safety requirements, providing the students with reversible air-conditioning, water dispensers, disability access ramps, and also featuring a rainwater recovery system.
Bertrand is now looking to extend the use of modular units even further in the business-to-business market, including possibly into the area of student accommodation. “This is the major opportunity I can see for the company, which is opening new sectors for using modular construction,” he says. As he sees it, there are a number of broad trends that are likely to support the growth of modular building solutions in the next 3 to 5 years.
“We now offer high-end solutions that are more comfortable and better equipped that were developed in conjunction with designers.” – Bertrand Quenot
“The first is the increasing mobility in the way people are living, travelling and working, which is completely in line with what we provide,” he says. “The second trend is the move towards building off-site, preparing the building elsewhere and then transporting part of the building ready to be stacked and linked on site.” Bertrand is convinced those 2 trends will help drive the company’s growth, as will environmental considerations. “Building off site helps the environment. It results in less pollution, fewer difficulties, and fewer health and
safety concerns,” he says.
Riding the wave of those trends starts with picking the best country to enter a new sector. “Then, as soon as we are successful, taking the best practice and expanding that service or product elsewhere,” says Bertrand. Right now, for example, the company is working hard to realise the potential in the housing sector. “There is a push by governments toward creating additional facilities and capabilities to build housing, and we think we have a good opportunity there for our modular constructions.”
Algeco in Europe
Identifying those opportunities and transferring best practice to other markets is one of the key skills Bertrand brings to his role as president and chief executive for Europe. “I think I was nicely positioned to share best practices because I had different experience within the group already.”
When he took up the role in June 2015, he had just spent 3 years in charge in the UK. “I have been in charge in different key countries within Algeco, and I moved to the UK when our UK organisation was facing tough times,” he says. Now he is responsible for 18 countries in Europe from the Netherlands to Russia and Portugal to Finland.
Headquartered in Baltimore, Algeco Scotsman has operations in 24 countries, with a modular fleet of about 280,000 units. It operates as Williams Scotsman and Target Logistics in North America, Ausco in Australia, Portacom in New Zealand, and Algeco Chengdong in China. In Europe, it is moving towards using the Algeco brand across all 18 countries. “In Germany, we were using 2 different brand names until recently when we replaced those 2 brands with Algeco,” says Bertrand. Now the only country not using the Algeco brand is the UK, which falls under the Elliott brand. However, it will eventually move to the Algeco brand, and as an initial step towards that day, Elliott has been rebranded in the Algeco colours.
Its span in Europe gives the company an edge when it comes to staying close to its customers. “Because of the density of our network, we are generally closer to our customers and better placed to deliver what they need,” says Bertrand.
Catering to the market
As the company seeks to enter new and different markets, this is also having implications for the people and skills it needs within the business. “It has primarily led us to create a specific Business Development department, which directly reports to me and is led by one of our senior managers with the broadest and most international experience. In addition, his team is made up of new employees who have been recruited with skills that are aligned with the new sectors we are targeting.”
Another way Algeco caters to the needs of the market is by offering a range that includes high-end solutions as well. “We have always tried to push towards more comfort and more services to offer to our customer,” he says. “People were reluctant until recently to utilise modular construction as it was seen as too low end. We now offer high-end solutions that are more comfortable and better equipped that were developed in conjunction with designers.” The high-end units have been well received by the architectural community, with one architect using the units to build his own office.
“We are putting in place more and more partnerships with suppliers just to share and innovate together.” – Bertrand Quenot
European supply chain
On the supply side, Bertrand says the company designs and develops its products most of the time, assembling them as well. “We source our components from Germany, as well as Italy, Eastern Europe or Southern Europe.” But the more the company grows, the more it aims to have the European supply chain supplying all of Europe. “Over the years, we have seen a kind of convergence in regulation, product compatibility and compliance with local laws, even if it is pretty slow. Our Holy Grail is to have one standout component supplier being used for any kind of customer needs in 2 or 3 or 4 different outlets.”
In other parts of the supply chain, the company is able to rely on one supplier. “Some of our key suppliers have followed us through the years and are supplying most of our needs throughout Europe. For instance, for panels our major supplier is from Italy, and we are using that company for most of our needs throughout Europe, including the UK and France.”
Bertrand says Algeco in Europe has already consolidated its list of suppliers in the past 5 years. “We have no more than 20 critical and strategic suppliers,” he says, adding: “Altogether there might be a couple of hundred, but 5 years ago we were probably at 10 times that level. That is true not only for components and products but for services as well. Transport, for instance, is much more concentrated and limited than it was a couple of years ago.”
It’s a move that Bertrand describes as “absolutely critical” for the future development of the company. “If we want our suppliers to invest and to develop a specific solution for us, they need to get volume and they need to get stability as our supplier as well. Some of our suppliers have invented and created technical solutions for us, and we are putting in place more and more partnerships with suppliers just to share and innovate together.”
For example, in France it is experimenting with a unit full of sensors to take the company one step closer to offering connected units. “That’s done through a couple of partnerships. Innovation comes from both sides, not only our side but the supplier as well.”