Machine Translated by Google

The malaise at Beaulieu: 'The De Clerck family must

finally let go of the company'
tijd.be/ondernemen/chemie/chemie/De-malaise-bij-Beaulieu-Familie-De-Clerck-moet-het-bedrijf-eindelijk-loslaten/10550411

Tom Michielsen June 7, 2024

It's storming at Beaulieu. The annual results of the De Clerck family's chemical and flooring empire were so
poor that the company is closing down two Belgian factories. But according to some observers, the
malaise runs much deeper. 'It is time for a new external CEO. But so many top people who know the sector are
no longer around.'

It's all hands on deck at Beaulieu. On Thursday it was announced that artificial grass will soon no longer be
rolling off the production line at the factory in Oostrozebeke, West Flanders, and that yarn production in Komen,
Hainaut, will be stopped and transferred to Cominnes, France. As a result, 149 jobs will be lost at both locations.
The reason? Very poor annual results with a turnover that was half a billion lower in 2023, and a net profit
that shrank from 120 million to 2 million euros. Over the past year and a half, many other locations have had to
make do.

In explaining the malaise, Beaulieu cites a combination of a general global economic downturn and the specific
economic climate in Belgium and Europe. In the corona years 2020-2021, the company surfed the renovation
wave, when carpet, vinyl, artificial grass and parquet flew out the door. Today, consumers worldwide are
tightening their purse strings due to high inflation and ditto interest rates. "It is also no coincidence that the two
discontinued activities were in Belgium," says an expert on the company. 'These are now partly shifted to France
and Spain, where wage and energy costs are a lot lower. Management waited too long to make adjustments.'

But observers argue that the malaise is much deeper - due to a lack of strategic vision - and at the same time
much higher - among the family shareholders. For decades, the strategy was rooted in the legacy of the late
Roger De Clerck. "He had the golden idea to take the entire production chain from chemicals to plastic
granules to floor coverings and distribution into his own hands, in a so-called vertical integration," explains an expert
in the sector. 'As a result, he was able to produce much cheaper than all his competitors in the 1960s and 1970s.
That combined with the law of large numbers meant that he was able to achieve relatively large margins on
gigantic volumes of carpet.'

Secret recipe
That has been Beaulieu's secret recipe for success for a long time: that it has always been primarily a chemical
company. Half of the turnover still comes from chemical products (polyamide and polypropylene
granules, fibers and yarns, which also

1/3
Machine Translated by Google

sells to external (flooring) manufacturers). 'The second generation has been reaping the benefits of this
almost on autopilot for decades. The chemicals market just had to pick up and the cash flowed freely.'

But those days may be gone forever. 'At the moment you can still blame the decline on the global economic
engine that is sputtering, but even if things improve, the Chinese and the Turks, who fully benefit from
the cheap raw materials and energy of the Russians, could very well take the cake. pulling,” says an
insider. 'Add to that the problems of the Chinese in selling their products on the American market (due
to heavy import tariffs) and you also have longer-term problems due to dumping of both their chemical
products and their finished floors on the European market.'

In addition, observers criticize the family shareholders, who also continued to remain in control
operationally. "Roger De Clerck was - despite his blunt style and allergy to the tax authorities - probably
one of the greatest entrepreneurs in post-war Europe," says one of the observers. 'His children-in-law
have inherited his empire, but unfortunately not all of them his business talent, nor his dynamism and
entrepreneurship. That continues to affect the company to this day.'

Right waters

"The current generation is simply not capable of keeping the company in the right direction," he said. 'When
things go badly, those four branches of the family come together, but as soon as an external CEO is
appointed and things improve again, they start to get involved again - each according to their own
insights. The last real external manager who was doing well dates back almost ten years ago: Geert
Roelens. He was a buffer between the volatile and uncommunicative then strong man and largest
shareholder Francis De Clerck on the one hand and the management on the other, gave a clear
direction and made the right decisions.'

When things get bad, the four branches of the family agree, but when things
get better, they start to interfere again.
”

An observer

Since his sudden resignation in 2015, the CEOs have succeeded each other: Francis De Clerck succeeded
Roelens, he was relieved by Stefaan Colle. For a moment, the family also seemed to have seen the light,
when Pol Deturck, a veteran of the chemical industry, took the helm in 2021. Le nouveau Beaulieu est
arrivé, or so it seemed. The family withdrew from operational management and there would be room for
more openness and corporate governance, as evidenced by the appointment of a series of
external directors: the ex-

2/3
Machine Translated by Google

banker Peter Vandekerckhove, serial entrepreneur Bart Deconinck, Marc Coucke's former right-hand man
Barbara De Saedeleer and Lotus chairman Jan Vander
The stickers.

In the meantime, that new wind has become a light breeze. After Deturck's departure last year, Dominiek De
Clerck suddenly became chairman of the board of directors in February and CEO a month later, albeit on an
interim basis. 'It's strange that the man who was always regarded as the neglected child of the family and who
once tipped off the courts about tax avoidance by his brothers and brother-in-law, suddenly took charge of the
entire group.' According to an insider, it was even the ever inscrutable Francis who asked his brother to do that.

I currently don't see anyone in the group and the family who can turn the tanker
Beaulieu, a leaking one at that, and can develop sufficient vision to do so.

An observer

Is it because Dominiek, at 63 years old, is the youngest in the family? Because Stefaan Colle is currently dealing
with serious health problems? Or again: because there is no succession in the family from the third generation.
Positive comments can be heard about Caroline De Clerck, who sits on the board of directors on behalf of
her father Francis.
"But is she capable of leading the entire group?" Dominiek's children are only around thirty and have their own
projects. And Edward, the son of Stefaan Colle and Ann De Clerck, would be groomed to lead Belgotex, the
group of companies that Colle kept out of the merger group in 2006.

The question is whether and how Dominiek De Clerck will be able to straighten the group out again.
According to a number of sources, closures and reorganizations would follow. For example, the consultant
Deloitte would examine the activities and see which ones create little added value.

'That and the hope for a revival of chemistry, that can already stop the bleeding. But I currently don't see
anyone in the group and the family who can turn the tanker Beaulieu, a leaking one at that, and can develop
sufficient vision to do so. The company will have to get rid of its holy grail of the past, chemical production, and
listen more to the market, become more agile and innovative. And the family will have to learn to finally let
go of the company. So it is time for a new external CEO. But so many top people who know the sector
are no longer around.

And he must be able to cope with the family's interference.'

3/3