Massive change in anticipation of industry challenges

One great example is Umicore; a company that emerged from the mining industry and found a way to stay ahead of the curve by taking the strategic challenges that the sector is facing head on. With a heritage dating back to 1805, Umicore underwent a remarkable transformation over the last two decades. Following a turbulent colonial past, the merger of four Belgian mining and metals companies in 1989 laid the foundation for what would soon become Umicore.

Going through a global economic slump and a change of parent company during the 1990’s, the merged organization was eager to make some big changes. When Thomas Leysen became the new CEO in May 2000, he set out the path to transform the company, which at this point was essentially a non-ferrous mining company, into an international materials-technology group.

Under the new name Umicore, the company critically re-evaluated its portfolio of businesses. The choice was made to only retain business areas that (1) had the possibility to be among the top 3 players in the world, (2) enjoyed clear, long-term competitive advantages, and (3) could embed social and environmental responsibility objectives. This ensured the encapsulation of sustainability into the core of the Umicore’s activities. Meanwhile, parent company Suez had finalized its exit and the company was now independent and publicly-listed, without a single dominant shareholder.

Ready for the future: environment, people and new business

The strategic assessment kickstarted a major renovation process. The copper and zinc businesses were divested and spun-off, and some large strategic acquisitions were made, among which Precious Metal Group, a leading global producer of car catalysts, and specialty chemicals company Hall. Addressing its historical legacy and showing pro-active environmental management leadership, Umicore embarked on a massive site-remediation, a sizeable €174 million investment spread across major sites in Flanders, Wallonia, Bulgaria, the Netherlands and France.

As a formal commitment to employees and other stakeholders, Umicore signed a Global Framework Agreement in collaboration with workers’ union and federations, covering an array of issues such as human rights, working conditions and environment. This also included the company’s commitment to the UN Declaration of Human Rights and the International Labour Organization’s core labor standards. In a more pro-active and open manner, Umicore applied corporate communications to display its good practices. The company’s first integrated annual report was released in 2007, combining both financial and non-financial information.

Sustainability powerhouse ready for the circular economy

The hard work started to pay off demonstrated by a strong financial and non-financial performance. Shareholders became more optimistic about the company’s business prospects, and in 2013 Umicore was named “the world’s most sustainable company” by Corporate Knights, receiving praise for its focus on clean technologies, including emission-control catalysts, materials for rechargeable batteries and photo-voltaics, and advanced recycling.

The Umicore case shows how this company was decades ahead of its industry and managed to address both the operational and strategic issues of metals and mining by transforming towards a strong new player in the circular economy. As underlined by the company’s newly launched Horizon 2020 strategy, Umicore is all-in on sustainable innovations that address some of society’s largest challenges.

For more information, visit the Umicore website or contact Nikkie Vinke directly in case you are looking for sustainable innovation within your organisation via nikkie@finchandbeak.com or call +31 6 28 02 18 80.

This article is largely based upon an IMD case study on Umicore (2016, IMD-7-1708) by Jan van der Kaaij, managing partner Finch & Beak, under the supervision of Dr. Benoit Leleux, Stephan Schmidheiny Professor of Entrepreneurship and Finance at IMD, Lausanne. The case was prepared as a basis for class discussion rather than to illustrate either effective or ineffective handling of a business situation. The case does not represent the official views or position of Umicore or its management.  

Image source: Umicore