Over the years the Roca family hascultivated a reputation for discretionthat is striking in a country like Spain

where glamorous and glitzy entrepreneursoften inundate the front covers of glossymagazines. To put it bluntly, it just doesn’tneed the publicity. The almost century-oldcorporation, which was originally a boilermaking business, now sells bathroom fittingsin more than 80 countries, generating in theprocess revenues in excess of €1.6 billion.

In actual fact, bathroom fittings representsthe sturdiest of the four columns upon whichRoca’s business empire rests, accountingfor around 66 per cent of income; air condi-tioning, ceramics and last but not leastheating and boilers make up the other three.The latter accounted for 13 per cent of thebusiness when in an unprecedented deci-sion it was sold off to the British Baxi Group.

Baxi was established in the year 2000as a result of a merger between Newmondand Baxi and is one of the largest heatingbusinesses in the British Isles, manufac-turing water heaters, boilers, spaceheaters and radiators for commercial andprivate residences. Led by Chairman JohnBurgess and CEO Mark Edwards , it employsmore than 5000 people and in 2005 postedresults of more than €1 billion. It currentlyranks third in Europe and is fast achievingthe geographical spread it seeks thanksto acquisitions such as the one that occu-pies us now.

Understandably the news of the sale of Roca’s heating division sparkedfears of delocalisation and layoffs in itsnative Catalonia.

More than a year down the line, none ofthe 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 havebenefited from Baxi’s know-how in termsof product development and technologicalsynergies. We are happy to belong to agroup whose core business is exactlywhat we do best. There is no mismatch interms of strategy or broad lines of action.”

A unique marketFurther to its original facility in Viladecans,Baxi Roca has two other production plantsin Spain and one in Italy. Steel radiators havebeen manufactured in Alcala de Henares(near Madrid) since 1965 and gas boilers in

TURNING UP THE HEAT

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

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Supplying the heatBaxi Roca’s product range includes not onlyboilers and radiators , but also all the acces-sories needed in a complete installationsuch as burners, storage tanks, pumps,heating valves and other components.

The LAURA range of wall-mountedelectronic boilers comprises 13 differentmodels that offer a set of advanced tech-nological features to cater for diverse cus-tomer needs. An integrated, cost-efficientelectronic system grades flame powerdepending on usage and there is a com-bustion-sealed version for use in kitchensand closed premises. An incorporated 1.5litre buffer tank equalises the temperatureof domestic hot water to ensure that thereare no sudden temperature changes whenhot water is not being used in a contin-uous way.

Digital technology ensures high preci-sion in hot water production and ver-sions with storage are available forhomes with high hot water needs. Otheroutstanding features include eco-friendli-ness with low emission levels, quietoperation, frost protection againstrigours of winter and coded informationabout possible faults. Models for usewith natural gas are fitted with a gaspressure regulator.

On the radiator front, the DUBAL alu-minium range constitutes Baxi Roca’shitherto most successful productoffering. These reversible radiators canbe installed with either a flat or openfront and are made up of sections man-ufactured by pressure-injecting moltenaluminium alloy. These sections aresubsequently joined together by meansof couplings with left and right-handthreads and sealing gaskets.

One of the greatest breakthroughsRoca has made in its push for environ-mentally-friendlier energies is its rangeof solar energy collector panels. TheAR16 range comprises 16 evacuatedglass tubes that guarantee energy col-lection even in places with not muchsunshine, whereas the PS2 range fea-tures a copper absorber plate withselective coating that has been bondedto the tube array by means of a laserwelding process. Both models can beeasily installed on terraces and roofs inprivate and public buildings and pro-duce energy for domestic hot water orheating swimming pools.

A new strategyFollowing the takeover by Baxi, Roca’smanagement has been busy devising awinning strategy for its core markets of Spainand Portugal. Yet as Mr Pallejá is quick topoint out, the economic realities of the twoIberian countries are markedly different,Portugal having been flirting with reces-sion recently.

“We still believe that we can grow inSpain and we are seeking to increase ourmarket share in the next few years,” hesays. “In Portugal the economic outlookis not as benign as in Spain, however. ThePortuguese economy is stagnant at themoment and we envisage a period ofconsolidation until consumer confidencereturns and a new cycle of growthappears on the horizon. If there is anygrowth at all, it is likely to be in the slowlane. In the meantime, we are going tobusy ourselves with a new three-pronged strategy to help the companyadapt to the new realities.

“First of all,” he continues, “we areseeking to achieve an optimum positionin the market through an increase in ourproduct range. Secondly, there is theissue of the integration with our newparent company. This is easier said thandone, since it may mean a refocusing ofour communication policy and a newcompany culture within which to operate– though it is true that no radical changeis on the cards as yet.

“Finally,” he concludes, “we intend totake special care of the all-importantdistribution network. Our clients areafter all distributors and we want tostrengthen our ties by training them andequipping them with the knowledge tomake full use of our products. As thepace of our integration with Baxi gainsmomentum, we are beginning to appre-ciate the advantages of belonging to a group with the same core activity.” ■■

www.bax-iroca.com

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Castellbisball (on the outskirts of Barcelona)since 1996. The Italian facility, opened in1990, deals with aluminium radiators.

“The company began a timid introduc-tion into the international markets in1970,” says Mr Pallejá, “but has remainedstrong in Spain throughout its history.Since the new millennium things havereally moved on in our segment and wehave witnessed a concentration of themarket amongst the big players. A statisticserves to illustrate this point: whereas in2000 the five largest companies in Europeenjoyed a 30 per cent market share, in2005 this figure had more than doubled to an impressive 60 per cent.”

Otherwise the Spanish market is rid-dled with idiosyncrasies that have aneffect on the market dynamics.Condensation boilers, for instance, onlyaccount for three per cent of the businessin Spain, whereas they represent almost50 per cent of all boilers in Europe.Unlike their British counterparts, BaxiRoca’s distribution network is not made

up of nationwide distributors.“We are the leaders in our segment

with a turnover which in 2005 reachedalmost €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 areno others than distributors – andthrough them we reach the installers.

Over the years we have forged strongties with an important group of distribu-tors and built a loyal customer base.Our distributors are usually small tomid-size family businesses with local orregional reach. In this respect themarket dynamics in Spain and Portugal are markedly different tothose of, say, Britain.”