Preserving a family business and looking after the environment: Café Monteverde, Honduras

November 27, 2020

Currently, around the world, around two billion cups of coffee are consumed every day. Most of the coffees that we enjoy are produced by families in countries with a long tradition of coffee production. Some of these families have dedicated over generations to produce high quality coffee and successful businesses. This article relates to a unique coffee producing family business in Honduras, Central America. Cafe Monteverde is a family business established in 1985. It was started by Omar Osorio with the planting of the first coffee land plots of the Catuaí variety* on the La Porra farm on the Sierra de Montecillos, a mountainous stretch in the central coffee region in Honduras – home to some of the best coffees produced for export in the country. Currently the La Porra farm is owned and managed by two generations of the Osorio family. The Osorio family produces, harvests and roasts coffee for local and international markets. The La Porra farm comprises approximately 30 hectares and is located between 1,365 to 1,411 meters above sea level. The average temperature in these altitudes helps to produce a unique environment that influences the quality of coffee harvested. Such geographical location is important as precipitation in the farm ensures that water is available throughout a year, which eliminates the risk of water deficit that could be detrimental for quality of coffee beans produced. For more than a decade the farm’s coffee harvest was sold to local exporters. Yet in 1996, family members identified that the Honduran consumer did not have the opportunity to obtain and enjoy high quality coffees. Thus, they set out to develop a coffee aimed at local consumers who were beginning to demand coffees with high quality attributes. Since 1996 the demand for Café Monteverde has experienced an average yearly increase between 15 to 20% in sales. The family attributes such success to the promotion made by consumers locally but also internationally. Café Monteverde does not invest in marketing yet constantly receives messages from the United States asking how they can get their products in their homes and stores. Certifications, the environment and the social impact of a coffee producing family The La Porra Farm is certified under the Rainforest Alliance seal, an international certification that benchmarks Café Monteverde against a standard that combines social and environmental principles. For the Osorio family, having café Monteverde certified matters as it signals that the farm not only meets their family desire for environmental stewardship but also that working conditions in terms of wages, personal and social security of labourers complies with international expectations. Gabriela Osorio, member of the second generation of the Osorio family, expressed “When you buy our coffee you are supporting an initiative of fair treatment with the workers who are employed in the farm. On average our employees receive a salary that is 46% higher than that normally paid in the farms of the region or in the coffee sector.” Moreover, the farm is managed based on the application of traditional and novel agronomic practices, introduced by Omar Osorio and uphold by the second generation. One of the key goals of […]

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FB in times of crisis: Gimnasio Fontana, Colombia

September 25, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of María Piedad López-Vergara, Assistant Professor and Director of INALDE Family Business Research Center at INALDE Business School, Colombia, with Natalia Zuleta, second generation member and Marketing and Innovation Director of Gimnasio Fontana  ENGLISH AND SPANISH LANGUAGE Gimnasio Fontana is a private school in Bogotá, Colombia. It has been thirty-six years in the educational market in which it is known for having developed its own pedagogical model. It was founded by two educators, Amparo Triana and Dario Zuleta who actually perform leadership positions in the school together with their daughters Catalina and Natalia. The school has managed to consolidate a learning system based upon three main pillars: creativity, sustainability, and happiness known as “What if?Ò Creative thinking” and it has been recently awarded as “Great Place to Study in Latin America”. Gimnasio Fontana is also renowned for its unique campus and premises designed by one of the most awarded Colombian arquitect and it is listed as cultural heritage of Colombia. The school is the first neutral carbon accredited institution in Colombia as well as a pioneer in implementing circular economy. Currently the second generation is working on the implementation of What if?Ò as a learning system outside the school aiming for the public and private educational sector.  The school is accredited by Council of International Schools.  The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? Gimnasio Fontana has faced many challenges in this new context.  I think that we have discovered new ways of doing things. In a certain way we were already going through an innovation process for our last grades in order to offer a more flexible curriculum that fostered entrepreneurship and that is more connected with our seniors’ interests in the fields of creativity and sustainability. This particular reality of Covid 19 has accelerated the process. At the same time, we had to reorganize teams, strengthen technological platforms and be more conscious of the teachers’ role as facilitators.  Financially, it has also been very challenging because many families have lost their jobs, and this had an impact on fees’ payment collection. We have reviewed our financial and investment strategy for the next years, as education will suffer radical transformations due to radical societal developments and a change of focus and priorities is required. In regard to our family, I think that this situation has been a great opportunity to highlight and put into practice our values such as unity, creativity, perseverance and love. Uncertainty has allowed us to recognize that these values are our real foundations and that we are able to put them into practice in challenging moments. Having worked on our compass, defining our mission and vision as a business family, has facilitated the decision-making processes thanks to a more strategic vision.  How did these changes translate into initiatives (or strategies)?  We have structured our pedagogical model in a more systemic and rigorous way. We have also worked on […]

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FB in Times of Crisis: Jacto Group, Brazil

August 28, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of Rania Labaki, associate professor and director of EDHEC Family Business Centre, with Alessandra Nishimura, third generation member of the shareholders council and head of family governance of Jacto Group. With a history that started in 1948 in Brazil, Jacto is currently present in more than 100 countries. Its activities cover logistics, health care, industrial cleaning, polymer processing, manufacturing high-technology agricultural equipment and machinery, portable manual and battery-operated equipment, and innovative solutions for precision agriculture.   The COVID-19 pandemic had a ripple effect on the world economies and societies. How has the family business been particularly impacted? In Brazil, our businesses have first shot down in March for around two weeks. As we operate in the “essentials” industries, such as food, logistics and health, our businesses re-opened while facing the challenge of ensuring safety conditions for our employees. We operate in different States in Brazil and in other countries such as Argentina and Thailand and we have commercial offices in the US and Mexico. So, when the Covid-19 hit we had to think both locally and globally. We had to adapt the measures depending on the evolution of the pandemic in each location. At the same time, while we know of some industries hugely impacted by the crisis, our health and Agri businesses were impacted to a lesser extent and in some cases flourished with an increasing demand. So, our focus was really to decrease the impact of the crisis as much as possible on our employees. In addition, a past economic crisis taught us the advantages of being debt-free: “We don’t take money to grow; we grow with what we have”. This certainly makes it easier for us to go through the current crisis. On the family side, we have also learned about the importance of a united family. This crisis reiterated that and had a positive impact on the frequency and quality of interactions among and across generations. How did these changes translate into initiatives or strategies? Dealing with the unknown is the hardest thing. Usually, we take decisions based on information that is reliable. We first investigated how companies in other countries were handling the crisis. As shareholders, we have put together a crisis committee that met on a weekly basis, then bi-monthly. Our priority was to provide support to employees and to ensure their safety rather than the continuity of the activities. We started even to consider these questions prior to the lockdown. During the two weeks in lockdown, we created many videos and manual guides and banners for the factories to share information that we trust. These included explanations on the steps to follow starting from the time the employee leaves home until reaching the workplace and the behaviors to follow at work. All the material was translated in the country’s language and disseminated through our social media platforms. We also did polls to check whether our employees would feel safe to come to work, by measuring their emotional level. If they were […]

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FB in times of crisis: EKKI Group, India

August 11, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Kanishka Arumugam, co-CEO of EKKI Pumps, Deccan Pumps Pvt Ltd, and second generation member of EKKI Group. With a humble start four decades ago, a few members of the Arumugam family, themselves agriculturists, manufactured Agri pumps that virtually boosted the green revolution in India. Today, the family business stands as one of India’s leading providers of advanced pump and water technologies for agricultural, building services, industrial and public utilities markets, and has a global presence in more than 20 countries.   The COVID-19 pandemic had a ripple effect on the world economies and societies. How has the family business been particularly impacted ? When the government imposed the lock-down last March, people in India were clearly not prepared for the scale of the shutdown. Many of them do not live close to their workplace and could not move back to their hometowns given the short notice. They mostly rely on daily or weekly wages for their living, which went missing overnight, creating subsistence issues. Although our factories had to shut down, our primary focus was our employees for whom we particularly care. We provided accommodation and food while continuing to pay salaries. As part of the culture and the specificity of the healthcare system in India, people tend to save money for difficult times, making them withstand for a little while. The government lifted the lock-down in April with restrictions as the survival of the population and economy was at stake. Our factories started to operate again while taking all necessary safety measures. Still, activities were impacted due to disruptions in the supply chain, but we had a sound bottom line with a debt-free balance sheet. Our conservative financing strategy allowed us to deal with the situation more serenely. On the family side, my parents moved back to our family farm. Interestingly, I was happy to see my father finally taking his first break since he started the business in 1981.   How did these changes translate into initiatives or strategies? This crisis allowed us to engage in new strategic directions, to accelerate the implementation of existing ones and to optimize our organizational structure. First, we took the last few months to think and pivot further our business model towards a sustainable water technology company. Fresh water is the basis of life on our planet, a basic human right, a critical factor in the health of our global environment, and a vital part of the business operations in a wide range of industries. But this resource is fragile and prone to crises. According to the United Nations, 4 billion people—more than half of the world’s population—suffer from water scarcity every year. The diversity of freshwater species has declined more than 80% since 1970. And in 2018, businesses worldwide reported $38.5 billion in financial losses related to water scarcity or pollution. In India, we have significant water pollution issues and around 10% of electricity is […]

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FB in Times of Crisis: Groupe Simone Pérèle, France

August 4, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Mathieu Grodner, third generation member and CEO of Groupe Simone Pérèle. His grandmother, a pioneer and visionary, started her first atelier in Paris back in 1948. Today, Simone Pérèle is an international group that designs and manufactures apparel and fine lingerie serving customers worldwide.  The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? Our businesses stopped operating as soon as the lock-down was promulgated. That was unprecedented. Our businesses were not prepared for such a violent cease of activities. Our employees showed an exemplary behavior though as they adapted fast to the situation and were committed in line with the interests of the business, in a context where their personal situation was somehow complicated. The business carries strong values with meaning, such as sustainability, authenticity and respect; all rooted in our history back to the founder, my grandmother. Those values represent our DNA and are the pillars to which employees can relate in times of crisis. There are of course some differences among people in the pace of adaptation depending on the generation they belong to, but overall, the adaptation to the crisis was natural. This crisis could also be a test for any family in business. What appeared clearly in our case is that we could count on a strong family cohesion. Our unity was not only a facade but a socle with strong foundations. The education and governance work we have done over generations has paid-off. How did these changes translate into initiatives (or strategies)? Our main priority has been to ensure the safety of our teams. Depending on the nature of their work, the employees were either allowed to work from home or had to work part time to accommodate the new situation. As we operate in different countries, we had to manage these adjustments while accounting for the different stages of the pandemic and the confinement restrictions. Our other priority has been to ensure the financial health of the company. Given that the production activity and our shops were shut down, we wanted to avoid cash-flows difficulties. The family business is 100% owned by family shareholders who are very committed to the Simone Pérèle project and its sustainability. They renewed their commitment and their trust by providing exceptional financial support during this period. Our communications became more regular in order to reassure and inform them about the strategic challenges we were encountering. We also relied on the support of our other partners and used the state-guaranteed loans that the French government has encouraged to help businesses during the pandemic. Family businesses are known for their values of social responsibility, acting as ambassadors of the territories in which they are rooted. How did these manifest themselves in your country? Simone Pérèle is a French or even a Parisian company with a close relationship with its territory. That […]

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FB in times of crisis: Fernand Hosri Group, Lebanon

July 23, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you the interview of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Riccardo Hosri, board member of Fernand Hosri Group in Lebanon. With entrepreneurial roots dating back to the 1880s, the family embodies the experience of 5 generations in business. Fernand Hosri Group covers different sectors including Security and Telecommunications, Building Automation & Communication, Renewable Energy, FMCG, Office Supplies and Equipment, Distribution, Publishing and Editing, Insurance, Hotels, Restaurants and Property management. The Group operates in the local markets of Lebanon, UAE, Saudi Arabia, and France and caters for 26 countries in the Middle East and Africa.   The COVID-19 pandemic had a ripple effect on the world economies and societies. Lebanon, in particular, was already experiencing political, economic and social crises prior to Covid-19. How has your family business been particularly impacted? The impact was terrible on our family business. Back in the second quarter of last year, the economic crisis in Lebanon escalated, gradually leading to the current monetary collapse and capital control enforcements of the banking system. Since March 2020, the Covid-19 just topped the other crises. All this makes it very difficult for any business to adapt and survive. The unemployment rate is unprecedented, reaching around 60%. Today, we live on a day-to-day basis and in a total survival mode. Generally speaking, the health crisis is well-contained in Lebanon but the economic system is a disaster. We have been going through the different phases of the confinement and deconfinement with businesses gradually re-opening with strict measures. We suffered like other companies in Lebanon, but perhaps more as a family business. We were struggling with the dilemma of taking reasonable business decisions while considering the emotional attachment to our businesses and our employees who are our second family. We are a family with very strong bonds, clearly shared values, and formed of complementary characters. This can have its pros and cons. On the pros side, we can blindly rely on each other. On the cons side, we are sometimes slower in decision-making as we are all equally invested and have opinions that might sometimes differ. Still, reassuringly, we are all challengers, long-term aligned, and very determined, which is usually a winning combination…  How did these changes translate into initiatives or strategies? Because of “the family factor”, the salaries of our employees have not been impacted from October 2019 to April 2020, despite the crisis and limited access to work. Unlike other countries, we did not have a stimulus package or any kind of tax or financial incentive in Lebanon. After April, we had to adapt, so we reduced the working hours and maintained a bottom line with a minimum wage. We also adapted the work format by allowing employees, whenever possible, to work from home and organize conference calls while maintaining a 20% presence in offices. Our sales and distribution staff could obviously not perform from home. We mainly initiated changes in our business models and systems by innovating and reinventing ourselves, tackling new […]

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FB in times of crisis: Association Familiale Mulliez, France

July 17, 2020

As part of the IFERA series on “Family Businesses in Times of Crisis”, we are pleased to share with you insights from Association Familiale Mulliez (AFM) by Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, based on a public speech (*) of the AFM president Barthélémy Ghislain and an interview of the family shareholder Camille Poutiers. The Association Familiale Mulliez is a federation of autonomous enterprises, such as Auchan, Decathlon and Leroy Merlin, operating in different sectors and controlled by nearly 1000 family members between the 4th and 6th generation. The family inspires meaning in its enterprises with a long-term perspective through its motto “We are useful in undertaking by and for Man” (**) and its 2035 vision “Creating for people”. The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? Our businesses represent a good panorama of commerce around the world. They are plural, spread over many domains and are present in global territories. Our activity was penalized to different degrees by the crisis, depending on the type of business. The catering business was, for example, stopped during the lockdown, whereas the food or more specialized businesses continued to operate in compliance with safety conditions. The family retirement homes for the elderly were the hardest hit given the raise of absenteeism and residents’ health concerns. Our family was able to show solidarity in these difficult times. We have experienced difficult times in the past which have become times of prosperity. With several generations represented, our family has combined almost 50 years of history which have taught us how to weather crises. We also all believe in “the project of meaning” that we have. How did these changes translate into initiatives (or strategies)? We have relied on our modes of governance by adapting our operating methods. We have created mixed groups among companies to reflect on the different daily problems and create synergy while inspiring each other. Regarding family members, internal communication has also been strengthened, by setting milestones and regularly sharing key elements to reassure and inform in complete transparency. At the start of the confinement, the next generation members have volunteered to help by providing support to our businesses, in particular the food drives, helping to relieve the important flow in the preparation of orders. There have also been incredible outbursts of solidarity within our companies which have been largely initiated by the collaborators themselves rather than upon the request of the family shareholders. It is somehow a manifestation of the relationship we have with them and the values that the family has conveyed in these businesses. For instance, Decathlon adapted its entire production of snorkeling diving masks to equip hospitals around the world with a low-cost lifesaving respirator. Boulanger donated electronic tablets to the “residential accommodations for dependent elderly” (EHPAD, for its French acronym) so that the elderly residents can see and interact with their families. Our catering companies, such as Salad & co and Bistrot Madame, distributed meals in hospitals while Kiabi distributed clothing kits for the newborns. Auchan […]

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FB in times of crisis: Grupo Pereira, Spain

June 26, 2020

As part of the series of interviews on “Family Businesses in Times of Crisis”, we are pleased to share the conversation of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Ruy Andrade Pereira, member of the third generation, in charge of External Relations and Business Development of Grupo Pereira in Spain. Established in 1955, Grupo Pereira is a vertically-integrated seafood group, with fishing boats operating in the Atlantic Ocean and factories and offices in 6 countries employing over 1.000 professionals. The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? Our 20 fishing boats are operating from North to South into the Atlantic Ocean, from Canada to Falkland Islands. We have offices and factories in Spain and several countries in Africa such as Mauritania, Senegal, Namibia and South Africa. Our main concern at the beginning of Covid-19 crisis was to secure PPE´s for our crew and staff worldwide. We realized that timing and legislation in each country was different and that caused us many troubles. Secondly, we had to deal with borders closing in Europe and Africa with our seamen in transit. Thirdly, it was crucial to avoid contagion among our crews working in factories. Fortunately, we have been considered a special-interest industry and the authorities granted us special permission to work and travel in very limited conditions. Thankfully, we did not have any personal loss. With regards to the family, our main concern was to protect the health of our 95-year-old founder, patriarch and my grand-father. He comes to the office every day and it was difficult to make him understand that he should not come until the pandemic would decline. We did increase our informal communications and try to keep our founder up to date. How did these changes translate into initiatives (or strategies)? With regards to communication, we enhanced both internal and external communications. Internally, we created departmental chats using digital platforms. We also asked the seamen and the crew on the ground to participate in a series of videos supporting the Spanish, Senegalese and Namibian society, reassuring them that the food supply was not at risk (during the first two weeks of the lockdown there were shortage of certain items in supermarkets) and cheering them up with positive messages sent by our Captains on board of the fishing boats. As our seamen spend almost 6 months isolated on the fishing boat, they could teach us many life lessons about how to handle the lockdown with peace of mind. And they did it, by writing letters with tips and by sending support video-messages recorded at sea with their mobile phones. We shared these videos on our social media and the public reacted cheerfully and gratefully. This also helped to increase their sense of belonging to the company. Finally, we have strengthen our digital resources with a new software, online sales in the main platforms and online recipes to try and help amateur chefs to cook seafood in an easy and tasty way. Family businesses are known for their values […]

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FB in times of crises: The case of spanish family firms

June 19, 2020

Our 2020 Conference Chairs Maria Concepción López -Fernández, Unai Arzubiaga and José Carlos Casillas, share some insights on the current situation of family businesses in Spain and how they reacted to the recent global crisis. This article is based on data from the Spanish Family Firm Institute (Instituto de Empresa Familiar) and on an interview with its General Manager: Dr Juan Corona. In Spain 90% of private companies are family businesses, who create almost 70% of private employment and contribute about 60% of GDP. Thus, family businesses are regarded as the roots and backbone of the Spanish economy, guaranteeing stability, development and the welfare state. The Coronavirus emergency has with no doubts changed everyone’s lives lately. What has been the impact of the recent emergency on Family Businesses in Spain? In the case of Spain, the declaration of the state of emergency has resulted in a significant reduction in the volume of activity, although it is true that with very important differences between the different sectors, since some of them have not been affected by pandemic control measures, while in others the drop in activity has been literally 100%. At the same time, compliance with sanitary protection measures has forced the remodelling of many of the business facilities, and even modified the operation of their production chains. Despite this, significant efforts have been made to reduce the drop of employment, achieving generally very positive results. How did these changes translate as companies’ initiatives (or strategies)? In this sense, family businesses are taking advantage to modify some of their strategic behaviours for the future, both internally and externally. In this respect, remote working procedures that were already being carried out in the leading companies are being greatly reinforced by the development of technological platforms and by changes in the company’s work culture. On the other hand, sales procedures are also intensifying through e-commerce platforms. What are the challenges in the short term? And in the long term? Indeed, family companies, and especially the larger ones, are using this period of great restrictions on productive capacity in order to redesign the organization and internal operating procedures. At the same time, they are working on the diversification of suppliers and raw materials, both geographically and technologically, in order to be better prepared for possible similar crises in the future. Will there be any side effects for the “Made in Spain” market? The image and prestige of large Spanish family businesses will be greatly reinforced because of the response they are offering to the crisis. The establishment of strict measures to protect the health of its workers, the efforts to preserve the level of employment, as well as its important work in solidarity actions, are undoubtedly generating a very positive assessment by both workers and society. What are the responsibilities of Spanish family businesses as ambassadors of their territory? One of the essential characteristics of family businesses is their embeddedness in the territory, which is why, immediately, our companies began to help the public administration, both at the state and regional level. The fact that they are strongly internationalized companies contributes, in a very […]

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FB in times of crisis: Cheung Ah Seung Ent., Indian Ocean

June 12, 2020

As part of the series of interviews on “Family Businesses in Times of Crisis”, we are pleased to share the conversation of Rania Labaki, Associate Professor and Director of the EDHEC Family Business Centre, with Jean and Jean-Alain Cheung-Ah-Seung, third generation members in charge of the Operations of CHEUNG AH SEUNG Enterprises based in the Indian Ocean (Reunion Island and Mayotte). Founded in 1964 by their grand-father who emigrated from China at age 13, CHEUNG AH SEUNG Enterprises is a medium-sized group of specialized service companies that strive to offer their customers turnkey and packaged solutions powered by 5 areas of expertise: logistics and transportation, lifting, construction equipment, maintenance, and removal. The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? Youngsters from the 3rd generation, who are studying overseas, had to stay home and followed their distance-learning courses. Lockdown away from home was not easy to handle but they showed great solidarity between them. We created a task force to exchange intel from our different industries but also to quickly take the necessary measures to protect the family integrity. Regarding the family real estate assets, we have been trying to assist our tenants as much as possible. As for the Operations, the pandemic variously impacted our different business units. Some of these business units, such as our removal companies, had to thoroughly stop their activities. Similarly, all construction sites closed down, impacting our equipment rental and lifting activities. On the other hand, businesses like industrial maintenance, logistics and transportation never stopped. We guaranteed a service continuity for our customers in charge of vital activities. In the meantime, the on-call duty service was reinforced. The diversity of our industries has always been a managerial challenge on a daily basis. This said, we developed some kind of natural resilience and agility that helped us face the ordeals. Thanks to the commitment of every employees (office staff, truck drivers, sales rep, technicians, managers, executive committee members, head of business units) and the agility of the organization, we managed to curtail the loss of revenue to 30%. In Mayotte, our main concern was the complex social climate. Luckily enough, the team natural resilience is helping them to navigate quite well through the crisis. How did these changes translate into initiatives (or strategies)? Firstly, neither the 2nd, nor the 3rd generation, ever faced such a scenario and we are handling the situation with great humility. We focused on our family values, on our employees and our customers. We are lucky enough to be able to share our opinions and experience with family friends, suppliers, customers and partners which helped us to decipher the trends. Moreover, the trust given by the 2nd generation made us more confident in the actions taken. At a very early stage, the Executive Committee, together with the managers, came up with and agreed on the following action plan: Focus on cash flow: everyone, at every level helped with the debt collection Protect our employees: we managed to maintain the salaries (yet we had to take hard decisions […]

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