Month: April 2022

Madrid, April 12^th. – Entrepreneurs of family enterprises operating in strategic sectors, like energy, raw materials and road transportation have advocated for tax cuts instead of direct government aids to the industries impacted by the energy price hike. Similarly, given the significant structural weak points in these sectors which were exposed by the war in Ukraine, they have asked the executive branch for long-term policies aimed at reducing reliance on third countries.

This was expressed by Héctor Dominguis, CEO for GDES, a company based in Valencia; José Luis González Pescador, CEO for ABC Logistic, based in Cantabria and Pedro Palomo, CEO for Octaviano Palomo, based in Segovia; during a new session of the conference series “The Family Business Shares”, held in Madrid intended to look into the impact of the Ukraine war on the Spanish economy and companies.

This series is organized by the network of Family Business Regional Associations and sponsored by Credit Suisse.

According to Héctor Dominguis, CEO of GDES, a company in Valencia specialized in services for the energy sector, what the Ukraine war has done is accelerate and aggravate a long-standing energy crisis that have brought into light the weakness of the energy strategy in Spain. In his opinion, “the energy strategy needs to be planned years in advance with the purpose of reducing an excessive reliance on third countries, as it is the case of Spain”.

He believes that the debate about energy in Spain suffers from excessive politicization and should be guided instead by scientific and technological criteria. He defined a combination of energy sources that could limit the dependency on third countries and allow to maintain price stability. “With scientific data at hand, it makes no sense to consider shutting down nuclear plants in Spain over the next 10 years, and bet on combined cycles if there are tensions in the gas supply; on the other hand, nuclear power generation releases the same amount of CO2 than wind power, and have the same or a better impact than renewable energies, a fact that is upheld even by the Joint Research Center of the European Union”.

Dominguis explained that there is no country in the world considering an entirely renewable energy mix. “It is an unattainable goal, and if it were, it wouldn’t be advisable. Renewable energy sources constantly change and need to be backed up by a stable source, whether it is gas, coal, or nuclear energy”.

For GDES CEO, amid the current inflation juncture and the economic growth drop, the choice would be to “reduce the tax burden on income, and at the same time it would be desirable to configure a tax frame that would make nuclear energy generation viable”.

 

Inflation stress on the food industry

The food industry is another of the strategic industries, which had already been strained by the price rise of raw materials before the Ukrainian conflict broke out.  “Since 2020, we have had bad cereal crops in some regions of the planet, which caused a supply problem now worsened by the war. It should be noted that Ukraine produces around 30% of the cereal in the world market”, explained Pedro Palomo, CEO for Octavio Palomo, a company in Segovia specialized in trading and distribution of cereals, fertilizers, raw materials for the agri-food industry.

In his opinion, this situation brings on the need to design more strategic crop policies, which extend limits and time frames for the transition to a fully green economy. He also advocated for a “tax reduction to compensate for the loss of competitiveness in the Spanish economy, which had a harder impact than the rest of its European competitors due to an inflation level higher than the European average level”.

 

Week points in the road transportation industry

Among the structural weak points that the Ukraine crisis and the fuel price rise have exposed in the road transportation industry, José Luis González Pescador, CEO for the Cantabrian company, ABC Logistic, mentioned its high atomization. “While Spanish road transportation companies own an average of 3.5 trucks, in Germany this number is 200; on the other hand, in our country there is great dependence on this kind of transportation due to the inefficacy of the railroad sector. Adding to this is a deficit of truck drivers in our road transportation industry caused by low wages, the poor margins of this economic activity and a great uncertainty about which will be the technological standard for the automobile industry in the coming years”.

Aiming at correcting these problems, the Cantabrian businessman spoke in favor of an industry agreement “the least interventionalist possible” intended to improve productivity in the industry; also, with the purpose addressing the current inflation juncture at a short term, he advocated that the government should return the tax increase it is getting through the inflation effect.

Under the slogan “We work for a better society”, around 300 youngsters from entrepreneur families of all Spain met last weekend in Santiago de Compostela.

 

Santiago de Compostela, April 4^th, 2022. Sustainability, innovation, and commitment are the three pillars around which has pivoted the 18^th National Encounter of the Family Forum, which gathered, in Santiago de Compostela last weekend, around 300 young members of entrepreneur families from all over Spain, organized by the Institute of Family Business and the Galician Association of Family Business, with the collaboration of Deloitte and Banco Santander.

The encounter, under the slogan “We work for a better society”, has served as a scene to reassert the commitment of the new generations of family businesses with the daily implementation of ESG standards that address the environmental effects of a company, their impact on the social environment and their communities, as well as the best corporate governance practices, which relate, among other things, to the composition and diversity of a company’s Board of Directors, public communication transparency policies or codes of conduct.

 

The meeting held in Santiago also provides this group of young entrepreneurs a greater understanding of the challenges posed by a family business, being at the same time a venue for mutual acquaintance and exchange of personal and business experiences among the future leaders of the Spanish family enterprises.

On Friday afternoon, the participants in the encounter visited FINSA facilities (Financiara Maderera), a Galician family business dedicated to the wood realm since 1931, which tops 830 million euros in sales and has placed sustainability as the main pillar of its strategy.

 

 

The “Good Santiago Pilgrimage”

The academic session, conducted by the Galician journalist Gladys Vázquez, started on Saturday with the welcoming speech of Inés Rovira, Director of AATT and of the Business Family Institute Forum, who reminded the assisting youngsters that the reunion was a good opportunity to take a time to listen and reflect on “how to work for a better, more modern, technological and human society”. Meanwhile, José Juan Pérez Tabernero, Institutional Relations Director of Santander España advocated for the legacy of the linage family entrepreneurs “to whom we owe the current Spain’s prosperity and stated that “when in addition to taking business ventures you risk your own patrimony, you become a true entrepreneur”. Fernando Vázquez Castro, associate of the family business, Deloitte, noted how the pandemic has taught us about the fragility of everything and, at the same time, has placed value on small things. Lastly, Víctor Nogueira, President of the Galician Family Business Association, compared a family enterprise with the lessons learned from “The Good Pilgrimage of Santiago”: Legacy, history, and a paradigm of how things should be done”.

The energy-technological transition the world is undertaking and the need for this process to be fair and efficient were the focus of this first academic session headed by María Victoria Zingoni, Repsol’s General Manager of Clients and Low Carbon Emissions. Zingoni underscored the critical moment experienced by the energy sector due to such peculiar circumstances as the price hike and the geopolitical situation and conveyed the compelling need to achieve a balance that encompasses the safety in supply, universal access, sustainability, and competitiveness.

 

The unstoppable digital transformation of enterprises

With the title “Technology and Business Globalization in a Sustainable World: from Conflict to Opportunity”, Patricia Riberas, Gestamp Manager of Transformation and Organization, interviewed César Cernuda, Gestamp Advisor and Global Head of NetApp. Cernuda added that the pandemic has accelerated the digital transformation of companies as part of an irreversible process; in his turn, Riberas stated that in order to approach this movement successfully, family businesses should assume an unrestricted radical cultural change.

The third session focused on the role of young CEOs in family businesses and featured the participation of Jaime Gorbeña, Bergé y Cia Executive President; Julio Iglesias, Grupo Revi Managing Director; Víctor Leal, Board of Directors member of CL Grupo Industrial, and Juan Moya, Persán Vicepresident, who talked about their experiences when taking on the management front lines at their companies. In this way, Gorbeña underscored that we need people around us who can tell us “to keep things clear and alert us when we may be going crazy”. Juan Moya emphasized the importance of having clear paradigms, passion for projects and of keeping egos below the company’s interests. Julio Iglesias indicated that when assuming the greatest responsibility, it was very important for him to know himself and rely on the teams, also to be orderly, practice good habits and have an adequate preparation. In the same way, Víctor Leal noted three aspects to worked on in a conscientious manner: compromise, generosity, and order.

 

A trip of many crashes

Gabriel Torres, Pascual Innova Director; Carlos Gómez, cofounder of 7r Ventures and Cristian Ull, cofounder of Area 101, covered in their panels the challenges faced by organizations in their corporate innovation. Torres reminded that innovation is something as easy as the generation and implementation of novel, amazing and useful ideas that create value, and that family businesses play with an advantage in the innovation field, since they have the sufficient patience to bring projects forward. Carlos Gómez, on his part, challenged the young assistants to the session to “serve as standard-bearers of their companies’ evolution because the business you will be leading are not the ones you know now.” Meanwhile, Cristian Ull revealed that innovation “is a trip of many crashes where you rectify and do things the right way”.

“Osborne 250 years. Legacy and Future”, was the title of the following round table attended by four outstanding members of this business saga: Ignacio Osborne (Grupo Osborne President), Fernando Terry (Managing Director), Rocio Osborne, (Communication and PR Manager for the Group) and Carla Terry (Institutional Relations). Ignacio Osborne cited some significant numbers of this great group: 340 stockholders, 250 years of history, six generations of managers and one family. And a lesson learned through all these years: “Priority of the business over family interests. The family is the silver medal, the company is the gold medal”.

 

Fernando Terry emphasized the vision that has inspired the family to grow the business during these two and a half centuries, while Rocío Osborne expressed that, in her opinion, Spanish family businesses “need to share our values with the international markets”. Carla Terry, on her part, specified some of the projects that the company has set in motion in order to maintain the business spirit in different members of the family branches.

 

The sixth session of the day was led by a group of Galician entrepreneurs: Emilio Froján (founding CEO of Velca), Catalina Fernández (Hifas da Terra President) and Cristina Gamallo (Founder Partner of Situm), and acting as moderator, José Miguel Alonso de Ozalla, responsible for Red de Empresas y Servicios Especializados de Santander España. José Miguel Alonso categorically declared that we are in an era of entrepreneurship in Spain. This was shared by Emilio Froján, who also revealed that “a success case consisted of millions of failures”. Cristina Gamallo, on her part, presented a case illustrating how it is possible to go from research to entrepreneurship, such as the Galician GPS for interiors used in more than 20 countries. For Catalina Fernández, innovation is a question of survival: “Fit or disappear”, she claimed.

 

The day was completed with a presentation entitled “A Story of Growth”, by Carmen Lence, CEO of Grupo Lence-Leche Río, which was presented by Fernando Vázquez Castro, a Deloitte associate responsible for family business. Vázquez reminded the assistants that “you have the privilege to receive the family business, as well as the commitment of passing on the legacy to the next generations”. Lence, in turn, made emphasis on a maxim that she says her father used to repeat: “Life is too short to live it in a mediocre way”.

 

The encounter concluded with the announcement of what will be the venue for the 19^th National Encounter of the Family Forum, to be held in 2023 in Zaragoza.