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Gefco SA

Gefco SA

77/81, rue des Lilas dEspagne
F-92402 Courvevoie Cedex
France
Telephone: +33 (0) 1 49 05 21 21
Fax: +33 (0) 149 05 24 83
Website: http://www.gefco.net

Wholly Owned Subsidiary of PSA Peugeot Citroën SA
Incorporated:
1949 as Les Groupages Express de Franche Comté
Employees: 7,800
Sales: EUR 2.64 billion (US$2.5 billion) (2002)
NAIC: 484121 General Freight Trucking, Long-Distance, Truckload; 492110 Couriers; 532120 Truck, Utility Trailer and RV (Recreational Vehicle) Rental and Leasing; 561510 Travel Agencies

Gefco SA, based in Courvevoie, France, is one of Europes leading logistics groups and one of the top ten in the worldwide logistics industry. Wholly owned by PSA Peugeot Citröen, Gefco has nonetheless established itself as an independently operating companyreducing its reliance on PSA since the late 1990s from more than two-thirds of sales to just half. Gefco has also established itself as an international operator, with more than half of its sales coming from beyond France. Gefco operates through three primary divisions: Automotive, Network, and Supply. The companys Automotive division provides a range of services to the automotive industry, including the preparation and distribution of automobiles. Network operates parcel and freight delivery services; the company also provides customs clearing services. Supply operates in three areas: ILI (Industrial Logistics Integration); Overseas, providing airborne and seaborne shipping services; and GefBox, adding container and related management services. Gefco has grown strongly since the late 1990s, nearly doubling its sales by the end of 2002 to more than EUR 2.6 billion, compared to EUR 1.47 billion in 1998. Much of this growth can be attributed to the acquisition of the companys German subsidiary, formerly known as Gefco KN, which had been part of the Kuhne & Nagel group of Switzerland. Gefco took full control of Gefco KN in 2002, renaming it Gefco Deutschland. Gefco has been led by CEO Louis Defline since 1999.

Post-World War II Beginnings

Gefco traces its origins to the expansion of the automobile market in post-World War II France. The Peugeot automobile company (later PSA), which had been taken over during the war, had suffered severe bombing damage at its sole manufacturing facility in Sochaux, Montbéliard, in the France-Comté region. By 1948, however, the company had returned to production.

Sochauxs out of the way locationnear the Swiss border and far from the booming postwar Parisian automobile marketled Peugeot to create a new subsidiary dedicated to the transportation of its vehicles. Founded in 1949, the company was named Les Groupages Express de Franche-Comté, otherwise known as Gefco.

Gefco started operations at the beginning of 1950, with a staff of just 10 people linking the Sochaux facility with the companys development center in La Garenne-Colombes, near Paris. In addition to transporting fully built Peugeot automobiles, Gefco quickly branched out to provide other services to its parent company, including transportation of parts and other equipment. In 1956, Gefco launched its own trucking subsidiary, Transauto, which grew to a fleet of more than 900 vehicles before being divested by Gefco in 2001. Transauto, later combined with Citröens Stur, also developed into one of Frances leading industrial vehicle rental companies, with a rental fleet of nearly 2,000 vehicles.

The construction of Peugeots Mulhouse manufacturing facility in 1961 enhanced Gefcos role within the company at the beginning of the decade. The 1960s marked the start of a new production model within Peugeot, which began a program of outsourcing increasing numbers of automobile components and systems to third-party manufacturers. At the same time, Peugeot converted a number of its bicycle manufacturing facilities to the production of automobile parts. Gefco now became Peugeots primary link among the various company sites.

The late 1960s and early 1970s became a time of growth for Gefco, which began a period of acquisitions. In 1969, the company bought Fourgon Dauphinois Bellier, based in southeastern France. The following year Gefco bought Collovray La Flèche Bleu, followed by Transports Vandecasteele in 1971. Other acquisitions ensued at mid-decade, including Soler Sequin in 1977. In that year, also, Gefco took over the freight delivery business of Blanc Messagerie, based in Toulouse.

Not all of Gefcos growth during the period came through acquisition. In 1975, the company established its own air freight division, Air Gefco. The company also followed Peugeots international growth, setting up its first foreign subsidiary, Gefco Deutschland, in 1976.

The 1976 merger between Peugeot and fellow French automobile group Citröen led to a new growth phase for Gefco. Citroen had built up its own logistics operations, as well as related businesses, beginning with the founding of Société des Transports Citroën in 1931. As Peugeot and Citroën integrated their merged operations, these subsidiaries were transferred to Gefco in 1978. That same year, PSA took over the European operations of the Chrysler Corporation, which included automobile manufacturing operations in England, Spain, and Francesoon to become known as Talbotas well as a number of logistics and distribution businesses. These were added to Gefco in 1979, boosting the logistic units international reach.

Transition Toward Independence in the 2000s

Gefco began consolidating its international operations at the beginning of the 1980s, creating new subsidiaries in Switzerland (Gefco Suisse) and the United Kingdom (Gefco Grande Bretagne) in 1981. A Spanish subsidiary (Gefco Espagne) was added in 1986, followed by Gefco Italia in 1988.

Gefcos international expansion, which followed closely on PSAs own foreign development, continued into the 1990s with the formation of an office in Singapore in 1991 and the launch of Gefco Portugal in 1992. PSA remained at the heart of Gefcos operation, and remained the source of more than two-thirds of Gefcos revenues into the late 1990s.

Yet the growth of Gefcos international logistics network enabled the company to begin serving a wider market of third-party companiesincluding other major automobile manufacturers. Gefcosand Peugeotsearly adoption of components subcontracting and just-in-time delivery had given Gefco a strong degree of expertise as the automotive market stepped up its reliance on logistics services at the beginning of the 1990s. A key component in Gefcos services offering was its emergency service, which, based on a fleet of 600 vehicles, plus airplane and helicopter support, offering the freight equivalent of overnight parcel delivery to manufacturers confronted with urgent parts and components sourcing needs. Gefcos emergency network was extended into other countries through a series of concessions. From its success among automotive companies, Gefco quickly extended the service into other markets, including the fashion, entertainment, pharmaceutical, and nuclear power industries.

Gefco accompanied PSA as the automaker extended its business into new worldwide markets. In 1995, Gefco set up a branch office in Peking; the company also opened an office in Tunis that year. The company added to its Asian market presence with a Hong Kong office in 1997. Yet South America appeared to be the companys most vital new market, as PSA made its push to enter the Brazilian and Argentinian markets. In 1997, Gefco opened an office in Buenos Aires; two years later, following the opening of PSAs Porto Real, Brazil manufacturing facility, Gefco established full-fledged subsidiaries in Brazil and Argentina.

Louis Defline became Gefcos CEO in 1998 and set out to transform the company from a PSA-dependent, France-oriented company to an internationally operatingand more and more independentlogistics leader. For the better part of two decades, Gefco had focused on internal developments, and PSAs own expansion, for its growth. In 1999, however, Gefco made its first acquisition since the 1970s, acquiring, through Gefco Deustschland, 60 percent control of KN Elan GmbH & Co. KG, based in Groa-Gerau in Germany. That company had been operating as part of Switzerlands family-owned Kuhne & Nagel, one of Europes leading logistics groups. The acquisition was part of an overall partnership agreement between Gefco and Kuhne & Nagel to create an integrated logistics European network, with operations in Belgium, Italy, the Netherlands, Spain, and the United Kingdom, in addition to Germany.

Gefcos revenues began to rise quickly at the end of the decade. While the companys sales had risen from EUR 1.2 billion in 1996 to just EUR 1.47 billion in 1998, Gefcos progression became more pronouncedjumping from EUR 1.7 billion in 1999 to EUR 2.3 billion in 2000, and jumping to EUR 2.6 billion by 2001. Although the KN Elan acquisition proved a major boost to the companys revenue growth, the company continued to build scale through internal developments. Chief among these was the companys international ambitions.

Company Perspectives:

Gefco has become a large-scale logistics provider offering global expertise in key areas: Automotive: vehicle predelivery inspection (PDI) and delivery; Network: Europes first Integrated Network in Groupage and Full & Part load transport; Supply: logistics of industrial flows.

Gefco also brings its 40,000 customers specialist know-how in customs and tax representation. The group is continuously in quest of new innovative, efficient and profitable solutions.

In 1999, Gefco turned to the Eastern European market, setting up a subsidiary in Poland, followed by a move into the Czech Republic. Gefco also established full-fledged subsidiaries in Morocco and Turkey in 2001. A key feature of the companys international growth was its commitment to diversification. If the company arrived in new markets in partnership with Peugeot, it quickly expanded its range of clientele, acquiring business from other automakers in those markets, while extending its range of services, from automotive transport to new and used car preparation, and to parts supply.

These diversification moves were viewed as the first steps toward a spinoff of Gefco by PSA into an independently operating company. By the beginning of the new century, Gefco had become one of Europes leading logistics-focused companies. As part of that focus, Gefco began to streamline its operations, selling off its Gefcotour corporate travel services wingwhich chiefly operated for the PSA groupto Carlson Wagonlit in 1999, then selling off its Transauto Stur truck rental business to Via Location in 2001. Instead, Gefco acquired complete control of Gefco KN in 2002, renaming its largest foreign subsidiary Gefco Deutschland.

Gefco continued to expand its range of services in its core European marketwhich accounted for more than 95 percent of the companys revenues in 2002. In that year, the company was voted the best pan-European logistics group in a poll of 1,000 major companies. Gefco began a rapid buildup of its automobile preparation business, based on a network of 16 facilities throughout Europe, with plans to triple the number of automobiles it handled to more than 500,000 per year by the end of 2003. As part of its expansion, the company added new distribution platforms, opening a 32,000-square-meter facility in Frances Le Havre in 2002, and beginning construction of a facility in Getafe, Spain, near the PSA Villaverde plant in that country; the new Gefco facility was expected to be operational by 2004.

Gefco stepped up the diversification of its client base at the turn of the century, adding customers among a wide variety of industries, including in motorcycles, electronics, textiles, consumer goods, chemicals, and others. Meanwhile, changes at its parent company also led to a boost for Gefco, as PSA switched its parts and components supplier network to a collection system, turning most of that business over to Gefco. Nonetheless, Gefco continued to reduce its reliance on PSA, dropping its parent company back to just half of its revenues. Gefcos growing financial independence was seen as a possible sign of a full-fledged spinoff in the early years of the new century.

Principal Subsidiaries

GEFCO Allemagne (Germany); GEFCO Argentine (Argentina); GEFCO Benelux (Belgium); GEFCO Brésil (Brazil); GEFCO Espagne (Spain); GEFCO Grande-Bretagne (U.K.); GEFCO Italie (Italy); GEFCO Maroc (Morocco); GEFCO Pologne (Poland); GEFCO Portugal; GEFCO Suisse (Switzerland); GEFCO Tunisie (Tunisia); GEFCO Turquie (Turkey).

Principal Competitors

Stinnes AG; Cargill International S.A; DANZAS Holding Ltd.; SCHENKER AG; Exel pic; Kuhne und Nagel International AG; Koninklijke Vopak NV; Brambles Industries Ltd.; Bidvest Group Ltd.; Inchcape PLC; Hapag-Lloyd AG; Rentokil Initial PLC; LOGISTA S.A.; BTI UK Hogg Robinson Ltd.; Panalpina Europe Services AG; DFDS Transport Group A/S; Tibbett and Britten Group PLC; Securicor PLC; Dachser GmbH und Co; Ziegler Schweiz AG; Inex Partners Oy.

Key Dates:

1949:
Peugeot Automobiles establishes its own delivery subsidiary, Les Groupages Express de Franche Comté (Gefco) between its Sochaux and Paris region operations.
1976:
Gefco creates first international subsidiary, Gefco Deutschland.
1978:
After Peugeot and Citroen merge to form PSA, Gefco takes over former Citroen logistics and transport subsidiaries.
1979:
PSA acquires Chrysler Europe and transfers its logistics and distribution businesses to Gefco.
1981:
Gefco establishes subsidiaries in England and Switzerland.
1997:
Gefco enters South America, following PSAs expansion.
1999:
Gefco establishes subsidiaries in Argentina and Brazil; acquires 60 percent of KN Elan of Germany and signs network integration agreement with Switzerlands Kuhne & Nagel.
2001:
Company sells Transauto Stur truck rental subsidiary to Via Location.
2002:
Company acquires full control of Gefco KN, which is renamed Gefco Deutschland.
2003:
Company begins construction on new distribution facility in Spain.

Further Reading

Commission Clears Freight Transport Firm Gefco to Acquire Control of Fellow German Company, KN Elan, European Report, October 6, 1999.

Gefco en discussion avec Via Location pour 1a cession de sa filale Transauto-Stur, Le Monde, April 10, 2001.

Gefco: laxe franco-allemand, Le Figaro, July 20, 1999.

Gefco sallie au suisse Kuhne & Nagel, Les Echos, July 20, 1999, p. 16.

Hastings, Phillip, Continental Forwarders Eye UK Market, Journal of Commerce, December 13, 1996, p. 8.

Kohan, Anna, Lean Production Helps Logistics Firms, Automotive News Europe, August 26, 2002, p. 8.

Louis Defline, Interview, Conseil National des Transports, October 17, 2001.

M.L. Cohen

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