The last Boy Scout

Flying by the seat of your pants is something sales people are pretty adept at, admits Orafti's new joint md Dominique Speleers, but it's no way to run a business."For two years now, I've forced myself to build preparation time for things into my diary," he says. "If you don't do this, you end up fire fighting all the time instead of setting your own agenda. Preparation is crucial. It's the difference between being reactive and being able to think strategically about how you want to move forward."

As to where he wants to take Orafti, Speleers is clear: "There's obviously scope for plenty of organic growth. We're growing in the double digits right now and I'm confident we can continue with that. Longer term, however, we may have an extended product range, not just in terms of physical products, but also in terms of health claims, which will open new doors."

Were Orafti to acquire another firm operating in the nutritional ingredients arena, it could either be brought in under the Beneo brand (which is currently supporting its inulin and oligofructose product lines) or it could be run as a sister company, says Speleers, who carved out a successful career in crop protection before joining Orafti in October 1998 as international sales manager. Four years later he was in charge of sales and marketing before finally being propelled into the hot seat as joint md at the end of March this year at the tender age of 42 after the departure of chief executive Paul Coussement.

Parent company Südzucker then split the top job into two, recruiting Charles Degard as md in charge of production, and Speleers as md with responsibility for sales and marketing.

Both report directly to Südzucker, he says, adding: "We keep them informed of progress, but if things are going fine, we're left to get on with it. If there's a problem, we talk more often!"

On paper, admits Speleers, Orafti has had a pretty lousy year. "The books don't look great for a couple of reasons. First, we have only just opened our factory in Chile, which gives you a nasty combination of low volumes, but high fixed costs because we are not running at optimal capacity. Second, we pulled out of fructose production, and that accounted for a third of our revenue." Thanks to recent reform of the European sugar regime, he explains, margins on fructose (a fruit sugar extracted from chicory) collapsed overnight, prompting a rapid exit from production at Orafti's factory in Oreye, Belgium. "We were always very competitive. But when sugar prices drop, so will fructose, so it becomes unprofitable."

That aside, the growth in Orafti Active Food Ingredients' core business: the prebiotic fibres inulin, oligofructose and Synergy1 (a combination of the two), has continued unabated as demand increases for products with less fat and less sugar and more active health-promoting ingredients, says Speleers.

Indeed, few companies in this sphere can be as confident as Orafti when it comes to complying with the new Nutrition and Health Claims Regulation, he says. "We've already got the data to back up our claims. For us, preparing dossiers is a case of collating data we already have."

Orafti will be submitting four health claims about its active ingredients to the European Food Safety Authority (EFSA). Two will be exclusive proprietary claims about Synergy1's ability to boost bone mineral density and increase calcium absorption.

The other two will be generic claims relating to the impact of inulin and oligofructose on gut health and the immune system that he hopes will make the 'article 13' list of claims supported by generally accepted science. These will be free for any companies including inulin and oligofructose in their products to use. A further claim about the satiating effects of oligofructose will be submitted in due course following the completion of a second human study (see p7).

Orafti is also researching oligofructose and colon cancer, and the influence of inulin and Synergy1 on blood cholesterol - something which could take it into the heart health market, says Speleers. "This reflects my point about expanding your portfolio in terms of new claims as well as physical products."

One of his biggest challenges is tackling the diversity of Orafti's customer base, which now spans 75 countries and is served by 55 distributors. Getting accurate information from these partners is therefore critical in the forecasting process, he adds. "We negotiate with farmers every year over how much chicory we'll need, but getting the numbers right is tough.

"You can dry inulin and store it, but you can't magic more hectares of chicory out of the ground if your forecasts are wrong!"

Having said that, operating two factories in two hemispheres (one in Belgium and the other in Chile) spreads risk and gives customers confidence in security of supply that they cannot get from Orafti's competitors, he claims.

While many suppliers of branded products increasingly regard manufacturing as peripheral to their core business of selling and marketing, Speleers insists that making things is central to Orafti's business. "Manufacturing is a core competence," he stresses. "If you control production you at least have an opportunity to work on your cost base. If we buy other ingredients, we will want to manufacture them."

While there are many companies out there claiming to sell prebiotics (which stimulate the growth of 'friendly' bacteria in the gut), "the scientific evidence is only really there for four prebiotic ingredients at the moment: inulin, oligofructose, galacto oligosaccharides and lactose. This may change in future as more research is done, of course."

However, there is plenty of room for competition, he says. "We're tapping into several very big markets: fat replacement, sugar replacement, fibre, prebiotics, bone health, weight management and potentially several others. The key is understanding which messages are meaningful to consumers in different markets."

Prebiotics caught on quickly in the UK, Spain and Germany, for example, as the concept of friendly bacteria was already well established, he says.

"In the US, consumers have been slower to get to grips with gut health, but that's changing. There is growing awareness in general that if your gut is well, you feel well."