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When Jean-René Fourtou was given the top job at Rhône-Poulenc back in 1986 there were whispers at the Paris Bourse that France’s leading chemical company might be obliged to declare bankruptcy before the new millennium. Sales had stagnated at around $7.5 billion a year. Earnings were just $250 million, a 3% net margin in an industry where well-run companies were earning twice as much. Enter Jean-René Fourtou, only 47 years of age when his call up from the Elysée came. Of course the request was couched in an elegance and grace befitting the beauty of the French language. But the bottom line was this: would he please be so kind as to bail out one of France’s leading institutions before it was too late? Setting about his daunting task with an impressive dose of energy and enthusiasm, within less than a decade Fourtou managed to increase productivity and internationalise the group in what has to be one of the most spectacular turnarounds in France’s economic history. He has been memorably described as the Platini of Rhône-Poulenc, after France’s most famous footballing son - although whether or not this will remain a flattering description we will have to wait until after the World Cup finals to see.
The footballing analogy most certainly is valid, however, in relation to the Rhône-Poulenc group itself, the company having been kicked back and forth in the nationalisation-privitisation game played out in France since the 1980s. Set for re-privatisation after the Gaullists returned to power in 1986, the stock market collapse of the following year meant that privatisation was postponed until 1993. Not a bad move, as it turned out, because by that time the company’s value had increased to 34 billion French francs - evidence of Fourtou’s early and nifty footwork. Today the value of the group has more than tripled again.
"It can never be a good thing to have the State overseeing the interests of shareholders", Fourtou reflects in flawless English from his slick 12th floor suite of offices at the company’s Paris headquarters. "You end up having to ask a Ministers what to do - and often he or she simply doesn’t know anything about the company. Its just bad management, even if it seems to be all very satisfactory and sound on paper."
Rhône-Poulenc is now one of the world’s largest pharmaceutical and chemical group in the world, its development sharply focused on life sciences (pharmaceuticals, animal and plant health), complemented by specialty chemicals for industry - that’s high-performance chemicals as well as fibers and polymers. Apart from serving the interests of its share-holders, its self-declared mission in life could hardly be more noble - to contribute to improving the well-being of men, women and children throughout the world. There are more than 68,000 employees on the company’s payroll (Nobel Prize winners Jean-Marie Lehn and Pierre-Gilles de Gennes included) - staff being dispersed across no less than 160 countries. Fourtou’s goal-scoring strategy has been to spend heavily in order to penetrate specific markets - particularly those in Asia and America - whilst at the same time divesting some 100 companies in commodity chemicals and textiles, the historic core businesses of the group, which was founded by Etienne Poulenc as a chemical compounds company back in the middle of the 19th century. Plus a massive $1.4 billion a year R & D effort has secured wonder drugs such as Lovenox (anti-clotting) and Taxotere (treatment for breast cancer). It has also uncovered the key insecticide molecule Fipronil (discovered in the UK) a phenylpyrazole, whose uses range from protecting Third World rice crops to creating the money-spinning Frontline drops that kill fleas on domestic pets.
"One of my most important strategies has been to internationalise the group", he says, with an understandable measure of pride. "When I arrived turnover in the U.S. was between 250 and 300 million dollars - this year we gave gone over the 4 billion dollar mark."
An unashamed Anglophile, Fourtou also turned his attention to the UK market, snapping up Fisons for $2.9 billion in a move which added 500 million dollars a year in sales in asthma/allergy treatment, itself a massive $12 billion-a-year market. In fact the company has some 25 separate sites in
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Francis Poulenc, Les Six, Fourtou, Chemical industry
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