January 2017

SNAAM, solidity and flexibility for the France's leading supplier of prefabricated steel cages

SNAAM is France's leading supplier of prefabricated steel cages, and its major contracts have recently included supplying steel framework for the Flamanville EPR nuclear plant and the Stade de Bordeaux. Pascal Subtil, CEO, talked to us about the specific features of his market, which requires both solidity and flexibility.

What does SNAAM do?

Pascal Subtil: Since the company was founded in the 1930s, we have been France's leading specialist supplier of prefabricated steel cages for the building sector. In other words, we supply a vital product that you can't see, because it consists of the steel frame around which concrete is poured. Our clients give us framework plans that can be highly complex, and our design department works out the right kind of structure. We then carry out custom fabrication of the steel cages (cutting, finishing and assembling) using steel coil and bars that we buy direct from steelmakers. We then deliver the cages to the worksite on a just-in-time basis.

What makes you different from your competitors?

P.S.: As well as our high-quality design department, our main strengths are our organisation and geographical coverage. Proximity is crucial in our business, because prefabricated steel cages are very large and it is expensive to transport them. Proximity also plays a key role in ensuring that we are responsive, because we carry out just-in-time production. We must be able to deliver on time because, without the framework, a building project comes to a halt. Today, we have 30 fully autonomous production sites, which handle everything from commercial relations to fabrication and allow us to cover all of France. That doesn't mean that they don't complement each other as well, because we can get several sites working together at busy times or to handle large projects.

Is the business very sensitive to fluctuations in steel prices?

P.S.: Yes, because although we use recycled steel in Europe, we are exposed to movements in the global market. Chinese growth and the major projects announced in the USA will inevitably push up prices. To deal with price movements, which are a key factor in our business, we use the bargaining power that comes with the scale of our group. We also strive to buy at the right times and to use the large storage capacity at our sites.

What are your main areas of development today?

P.S.: We are always on the look-out for opportunities to increase our coverage. We also want to build up our trading activity. For around 10 years now, we have moved into selling standard framework and complementary products, for which we have filed a number of patents. Our catalogue now has over 1,000 product lines.

What role does Crédit Mutuel Equity play?

P.S.: They are a long-standing partner because Crédit Mutuel Equity (Banque de Vizille at the time) supported Gildas Collon, our majority shareholder, when he took over the company in 1998. We then worked with another fund before resuming our relationship with Crédit Mutuel Equity in 2013. We are now working together again with a long-term view, which is vital in the construction sector. Crédit Mutuel Equity supports us when we want to grow, whether it's by providing financial support or helping us to analyse opportunities. Their vision and their experience across many industries give us a novel perspective on the issues we face.

What the partner says

We partnered Gildas Collon when he created the SNAAM group in 1998 by acquiring the assets of Mure. Since then, the group has grown rapidly to become one of France's leading suppliers of steel cages for reinforced concrete structures. In 2013, when its financial investor wanted an exit, it was a natural decision to join forces again with Gildas Collon and Pascal Subtil to write the next chapter in the group's development.

The way SNAAM organises its production, and particularly the autonomy that each production site has, gives it a major competitive edge. Together with its good geographical coverage, SNAAM's expertise has delivered rapid growth in its trading business and product innovation. Today, SNAAM offers a comprehensive solution for reinforced concrete structures across France.

Management wants to continue consolidating the sector and growing both in France and abroad, while constantly anticipating market developments and client expectations. Its strategy of creating a leading mid-cap will inevitably take time to achieve; as such, it ticks all our boxes as a long-term investor and fits with our desire to work with performing companies and people.