In 2008 a consortium of investors led by Robert Shieh of the Ta Chen Group acquired Brighton Best. We asked the president of Brighton Best International, Jun Xu, to reflect on those ten years, on conditions today and prospects for the future.
In our last editorial at the start of 2018, we said that business has been good and that everyone was growing. I said 2018 would be another record year of growth for BBI, and for our industry. However, I also cautioned this optimism with the increasing role of politics in business. I could not see to the extent that this would pay out and I am hopeful this will mitigate in 2019. Fundamentally we believe that protectionism and global tariffs, especially on input components for finished product, can only be bad because it will increase the cost of the finished product for exports. It will have a negative and unintended consequence of slowing down manufacturing. For the thousands of upstream steel jobs it may create, hundreds of thousands of downstream manufacturing jobs may be lost.
Globalisation is not perfect, and we are much too naïve to judge its effectiveness. However, being a global business, we have seen how in the last ten years the business has introduced us to new cultures and people, that we never could have imagined ten years ago. Rather than pushing people or groups to extremes, business normalises people. Global commerce, more than any other force in our time, has kept our world at peace among global superpowers. Let’s not regress back to the dark days of nationalism masked as patriotism; and let us not forget the historical costs of nationalism.
For our business, we have long decided that the future is harder to predict than to mould. Regardless of external factors, it is imperative that we as managers maintain flexibility in our business to take advantage of opportunities that are presented. BBI has grown more than tenfolds in sales and tonnage over the past ten years. Ten years ago, in 2008, we could not have been bold enough to make this prediction. We could not have predicted that we would sell, in addition to fasteners, hand tools, safety PPE, metal cutting tools, as well as world-class brands in hand protection such as Ironclad and KONG®. We could not have predicted that we would make over five acquisitions that would transform the markets, products, and customers BBI would service. However, growth for the sake of growth is not efficient and is actually dangerous. You must find accretive growth, or efficient growth. BBI’s efficiency has been historically propelled by investment into technology, infrastructure, and inventory over the last ten years. As our growth in fasteners mature, our continued efficiency will be propelled by investments into new products and markets. Rather than seeing the boundaries of our industry, we see the advantages of starting in fasteners.
Fasteners are among the lowest dollar per kg and lowest dollar per SKU of product categories in industrial distribution. This is not our disadvantage, but rather our advantage. If you can rationalise a business selling the lowest dollar per kg and lowest dollar per SKU, then selling products for at a higher dollar per kg or SKU can only be accretive, as long as you leverage the cost infrastructure you’ve already rationalised for fasteners. As we have expanded beyond fasteners, we have learned that there is no true success or failure in business. As it applies to businesses, these two words are too undefined – as failures can lead to success and successes can lead to failure through complacency. Rather than seeing success or failure, we only see trying or not trying. The key to this mentality is knowing yourself. You must be honest with your own strengths and weaknesses to know what opportunities to focus on or avoid.
Over the last ten years, we have learned that there are no real differences among companies or people, other than the way they think. Are you an optimist or pessimist? There are those who want to hold onto the past, because the past has been good to them. I do not think this is wrong, but I also do not think this is right. Because the only thing we can be certain about in the future is change. Optimists will mould this change. Pessimists will resist this change. But resisting change is like resisting the natural flows of a river. In the short term you may be successful, but in the long-term, it will be detrimental. You can try to change the flows of a river, but if you try to block it, it will carve through you like it carves through mountains.
Find Brighton Best at Fastener Fair Stuttgart on Stand 1.374
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 15 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.