TURNING UP

THE HEAT

When in May 2005 the family owned and run Catalan multinational ‘king of the bathroom’ Roca sold
its heating division for €200 million to the British Baxi Group, the latter edged ever closer to fulfilling
its dream of becoming the European leader in its field. The newly-formed company seems to have
struck a happy balance between continuity and change and is in the process of developing synergies
with its new British owners. Oscar Del Santo talks to marketing manager Jaime Pallejá.

O
ver the years the Roca family has
cultivated a reputation for discretion
that is striking in a country like Spain
where glamorous and glitzy entrepreneurs
often inundate the front covers of glossy
magazines. To put it bluntly, it just doesn’t
need the publicity. The almost century-old
corporation, which was originally a boiler
making business, now sells bathroom fittings
in more than 80 countries, generating in the
process revenues in excess of €1.6 billion.
In actual fact, bathroom fittings represents
the sturdiest of the four columns upon which
Roca’s business empire rests, accounting
for around 66 per cent of income; air condi-
tioning, ceramics and last but not least
heating and boilers make up the other three.
The latter accounted for 13 per cent of the
business when in an unprecedented deci-
sion it was sold off to the British Baxi Group.
Baxi was established in the year 2000
as a result of a merger between Newmond
and Baxi and is one of the largest heating
businesses in the British Isles, manufac-
turing water heaters, boilers, space
heaters and radiators for commercial and
private residences. Led by Chairman John
Burgess and CEO Mark Edwards , it employs
more than 5000 people and in 2005 posted
results of more than €1 billion. It currently
ranks third in Europe and is fast achieving
the geographical spread it seeks thanks
to acquisitions such as the one that occu-
pies us now.
Understandably the news of the
sale of Roca’s heating division sparked
fears of delocalisation and layoffs in its
native Catalonia.
More than a year down the line, none of
the fears of downsizing that had swept
through Roca’s staff have materialised.
“There have not been important phys-
ical changes since Baxi took over in 2005,”
confirms marketing manager Jaime Pallejá.
“The same applies to human resources.
We are still the market leader in our seg-
ment. It is true, however, that we have
benefited from Baxi’s know-how in terms
of product development and technological
synergies. We are happy to belong to a
group whose core business is exactly
what we do best. There is no mismatch in
terms of strategy or broad lines of action.”
A unique market
Further to its original facility in Viladecans,
Baxi Roca has two other production plants
in Spain and one in Italy. Steel radiators have
been manufactured in Alcala de Henares
(near Madrid) since 1965 and gas boilers in

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Castellbisball (on the outskirts of Barcelona)
since 1996. The Italian facility, opened in
1990, deals with aluminium radiators.
“The company began a timid introduc-
tion into the international markets in
1970,” says Mr Pallejá, “but has remained
strong in Spain throughout its history.
Since the new millennium things have
really moved on in our segment and we
have witnessed a concentration of the
market amongst the big players. A statistic
serves to illustrate this point: whereas in
2000 the five largest companies in Europe
enjoyed a 30 per cent market share, in
2005 this figure had more than doubled
to an impressive 60 per cent.”
Otherwise the Spanish market is rid-
dled with idiosyncrasies that have an
effect on the market dynamics.
Condensation boilers, for instance, only
account for three per cent of the business
in Spain, whereas they represent almost
50 per cent of all boilers in Europe.
Unlike their British counterparts, Baxi
Roca’s distribution network is not made
150 Industry Europe
up of nationwide distributors.
“We are the leaders in our segment
with a turnover which in 2005 reached
almost €235 million,” says Mr Pallejá.
“We are manufacturing more than a mil-
lion radiators and 175,000 boilers,
which are sold to our clients – who are
no others than distributors – and
through them we reach the installers.
Over the years we have forged strong
ties with an important group of distribu-
tors and built a loyal customer base.
Our distributors are usually small to
mid-size family businesses with local or
regional reach. In this respect the
market dynamics in Spain and
Portugal are markedly different to
those of, say, Britain.”
Supplying the heat
Baxi Roca’s product range includes not only
boilers and radiators , but also all the acces-
sories needed in a complete installation
such as burners, storage tanks, pumps,
heating valves and other components.
The LAURA range of wall-mounted
electronic boilers comprises 13 different
models that offer a set of advanced tech-
nological features to cater for diverse cus-
tomer needs. An integrated, cost-efficient
electronic system grades flame power
depending on usage and there is a com-
bustion-sealed version for use in kitchens
and closed premises. An incorporated 1.5 A new strategy “First of all,” he continues, “we are
litre buffer tank equalises the temperature Following the takeover by Baxi, Roca’s seeking to achieve an optimum position
of domestic hot water to ensure that there management has been busy devising a in the market through an increase in our
are no sudden temperature changes when winning strategy for its core markets of Spain product range. Secondly, there is the
hot water is not being used in a contin- and Portugal. Yet as Mr Pallejá is quick to issue of the integration with our new
uous way. point out, the economic realities of the two parent company. This is easier said than
Digital technology ensures high preci- Iberian countries are markedly different, done, since it may mean a refocusing of
sion in hot water production and ver- Portugal having been flirting with reces- our communication policy and a new
sions with storage are available for sion recently. company culture within which to operate
homes with high hot water needs. Other “We still believe that we can grow in – though it is true that no radical change
outstanding features include eco-friendli- Spain and we are seeking to increase our is on the cards as yet.
ness with low emission levels, quiet market share in the next few years,” he “Finally,” he concludes, “we intend to
operation, frost protection against says. “In Portugal the economic outlook take special care of the all-important
rigours of winter and coded information is not as benign as in Spain, however. The distribution network. Our clients are
about possible faults. Models for use Portuguese economy is stagnant at the after all distributors and we want to
with natural gas are fitted with a gas moment and we envisage a period of strengthen our ties by training them and
pressure regulator. consolidation until consumer confidence equipping them with the knowledge to
On the radiator front, the DUBAL alu- returns and a new cycle of growth make full use of our products. As the
minium range constitutes Baxi Roca’s appears on the horizon. If there is any pace of our integration with Baxi gains
hitherto most successful product growth at all, it is likely to be in the slow momentum, we are beginning to appre-
offering. These reversible radiators can lane. In the meantime, we are going to ciate the advantages of belonging to
be installed with either a flat or open busy ourselves with a new three- a group with the same core activity.” ■
front and are made up of sections man- pronged strategy to help the company
ufactured by pressure-injecting molten adapt to the new realities. www.bax-iroca.com
aluminium alloy. These sections are
subsequently joined together by means
of couplings with left and right-hand
threads and sealing gaskets.
One of the greatest breakthroughs
Roca has made in its push for environ-
mentally-friendlier energies is its range
of solar energy collector panels. The
AR16 range comprises 16 evacuated
glass tubes that guarantee energy col-
lection even in places with not much
sunshine, whereas the PS2 range fea-
tures a copper absorber plate with
selective coating that has been bonded
to the tube array by means of a laser
welding process. Both models can be
easily installed on terraces and roofs in
private and public buildings and pro-
duce energy for domestic hot water or
heating swimming pools.
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