DELMAS' ENTREPRENEURIAL OWNER CASTS RESTLESS EYE AT ADDITIONAL ACQUISITIONS

DELMAS' ENTREPRENEURIAL OWNER CASTS RESTLESS EYE AT ADDITIONAL ACQUISITIONS

After the strain of a bitter takeover battle and a five- year binge of acquisitions, many executives might take time for reflection and consolidation.

But sitting still is not in the nature of Vincent Bollore, a French businessman.Mr. Bollore's first major expansion was in 1986 with the purchase of Scac, France's largest forwarding and logistics firm, for $46.3 million (250 million French francs). Then in 1991, he succeeded in acquiring Navale Delmas, the largest privately owned shipowner in France.

The breathtaking speed of expansion has led some analysts to ask whether Mr. Bollore was stretching himself financially and would need to divest heavily and quickly.

But Mr. Bollore has paid little heed to such concerns, moving on to take over the Joint Service Africa consortium and buy the services of Italy's Merzario Marittima from Compagnie Maritime Belge.

Moreover, he hopes to complete another acquisition or two before the end of this year, he said in a recent interview.

He said he is convinced his major backers, which include the U.S. group KKR, the Italian Agnelli group and French insurer Assurances Generales de France, would "follow if more development were needed."

Analysts now appear less concerned about the Bollore group's financial position.

"He would just need to sell one or two ships to generate cash," said Jean-Jacques Limage, transport analyst for Paris-brokerage DLP-James Capel.

However, Mr. Limage noted that it is impossible precisely to estimate the

financial strength of Mr. Bollore's multi-tier, privately owned holding companies.

The clean-cut Mr. Bollore looked puzzled at the suggestion that he is an asset stripper driven more by financial than industrial motives.

His age, 39, and rapid ascent in the business world are an unusual contrast with the more traditional modus operandi of the shipping and transport community.

But Mr. Bollore vigorously denies he has any intention of picking off the best and discarding the rest.

"We have not behaved like financiers by buying and selling ships and property for capital gains," he said. "We have always pursued a long-term policy" in the decade since he took on the small family firm that has become today's Bollore empire.

Turning the company into a wide transport group by adding Delmas to his portfolio was a logical move, he said, and took five years to achieve.

The goal finally was reached last spring when Bollore Technologies, a key holding company in the complex Bollore corporate structure, took over Delmas after a drawn-out tussle with the Vieljeux family.

The combined operations, named Scac-Delmas-Vieljeux, or SDV, scored estimated sales of $2.8 million (15 billion francs) in 1991.

This makes the group No. 1 in France for transport, and the biggest in the world for north-south liner shipping trades, Mr. Bollore said.

The adventure helped bring the transport operation's commitments to $925 million (5 billion francs), consisting of $463 million in investments and another $463 million of debt.

The top priority now is to dovetail the two groups together as quickly as possible to take advantage of their synergies, which should be completed by the end of this year, Mr. Bollore said.

Depending on the location, this can mean using the same equipment, merging services or joint purchasing. The profit targets are based upon completing the union by the end of 1993, he explained.

Operating income is expected to rise from an estimated $83.3 million (450 million francs) in 1991 to $176 million in 1994, and net profit to more than double from $42.2 million (228 million francs) to around $100 million.

But contrary to labor union fears, it will not lead to job losses, he insisted.

"We have already recruited half a dozen more executives, and hope to continue hiring as the group expands," he added.

On the maritime side, Mr. Bollore will concentrate entirely on the north-south axis, wherever it may be, and ignore the troubled east-west trades.

Delmas, with its 50 vessels and seven more on order, is strong on the West Africa routes, but has been weak on East Africa, South America and the Pacific, he pointed out.

Even though freight rates on the SDV routes are rising, not all are profitable, he said.

"The return is low compared to the quality of service and the size of the investment," he admitted.

But he believes "shipowners will become reasonable" and stop operating at below cost. Mr. Bollore's tactic is to open his books to customers "to show what the real costs are."

After all, it is not in the customer's interest for transporters or shipowners to shave their margins so fine that they either go out of business or reduce the quality of their service, he pointed out.

Last week the group announced two deals to strengthen its presence in Africa, a consortium with Cote d'Ivoire shipowner Sitram and a series of agreements with Grindrod of South Africa.

Analysts welcomed the move.

''Mr. Bollore had the strategic choice between concentrating on black Africa, where the market is very thin but there is no competition, and the active Atlantic routes, where there are no margins," Capel's Mr. Limage said.

Although a newcomer himself among French shipowners, Mr. Bollore was the first to come out in favor of the French government's plan to reform the docker employment system and to beef up the port industry to halt the loss of traffic to neighboring competitors.

The plan drawn up by Jean-Yves Le Drian, French shipping minister, and hotly contested by the dockers union, is "courageous," but "insufficient," Mr. Bollore said.

Protected dock labor "is one reason for the decline in French ports, but it is not the only one." He said he believes the French government should go further and adopt a Japanese-style approach to "this national problem."

It should concentrate on selected ports, instead of dispersing resources throughout the industry, and invest much more in rail and road access to the ports, he said.

He is less enthusiastic about the desire of Paul Quiles, transport minister, for technical cooperation links to be forged with money-losing state-owned shipowner Compagnie Generale Maritime.

''We are in different markets," he explained. "While that continues, I see no reason not to co-exist (as we do now)."

But he did not rule out closer links in the future, especially to prevent CGM from falling into foreign hands.