Private Dutch mail operator Sandd is aiming to get out of the red with higher prices afterbuying rival Selektmail and is planning to move into new growth areas such as parcels, according to
its chief executive.The PostNL challenger, set up in 2001, grew to volumes of over 600 million mail items in 2011,CEO Haico Meijerink, told this week’s European Postal Services conference in Rome. The takeover ofSelektmail from Deutsche Post early in the year had given the company “reasonable volumes andensured that we are here for the long run”, he commented. It now has a 17% market share.
In 2012, Sandd hopes to grow to volumes of 700 million items and achieve revenues of more than€120 million. He admitted, however: “We do not make a profit yet. After the acquisition we can seelight at the end of the tunnel.”
Meijerink praised forthcoming postal regulation changes in the Netherlands as creating a morelevel playing-field for private competitors after “very poor” liberalisation and competitionmonitoring in the past. Above all, these would ensure fair pricing by the market leader, hestressed. Another factor will be PostNL’s decision late last year to close the loss-makingaddressed mail business of budget subsidiary Network VSP, according to observers.
“We see a return to a stable market as a way for us to make a profit. With only two players wecan target reasonable prices,” he commented. “I’m also banking on better regulation in 2012. I hopecustomers will give us a chance with prices for us to start being profitable.”
Meijerink reiterated that the company still aims for a long-term market share of 25-30% eventhough the overall Dutch mail market is expected to decline from four billion items to 3.2 billion.Sandd could reach its target of one billion items with organic growth of 6-8% over the comingyears, he said.
Looking ahead, he explained that Sandd currently only targeted large businesses since its launchand had not yet started to sell to SMEs. “We will step into new mail segments. For example, we seesolid growth in direct marketing. We can cherry-pick in which segments we compete.”
Diversification could also be on the agenda. “The parcel market is growing double-digit. We seeopportunities there,” he added.
But Meijerink stressed that the private equity-backed company did not have massive funds forinvestments. “We do not have a war-chest so we have to be careful where we invest. We think thereis growth for us in a declining market. But we will need to grow in other segments,” hedeclared.
Sandd, with some 2,000 clients, operates a network of 53 sorting and distribution centres anduses 14,000 mostly part-time workers for deliveries. Under a collective labour agreement coveringthe Dutch mail market, Sandd will transfer 80% of its part-time delivery workers to permanentcontracts by the end of 2013. Staff will be covered by collective conditions on wages, holidays,insurance and other topics.
