The story behind the number 1 on the Antwerp trade register.

The trading company G&C Kreglinger was founded in 1797 and trades wool and sheepskins, exotic products, specialized ingredients for industry and takes care of its own commercial distribution and logistics. Kreglinger has, for 5 years now, also cultivated grapes for its wine production in Australia. All activities are coordinated from the main office in Antwerp and its Australian branch in Melbourne. Ondernemers wanted to discover the synergy inside this diversity.

The Kreglinger main office is established in the oldest guildhall on the Antwerp Grote Markt. The marvellous front of the building is just the tip of the iceberg. When you enter the hall, you think you are visiting a museum of aboriginal art. If you also get the privilege to enter the office of managing director Paul de Moor, without any doubt you will be speechless.

I take a seat, manager Wim Arnouts is on his way. When the man enters the room, I am still speechless because of all this glitter and glamour. A huge tapestry, 17th century paintings, African sculptures, medieval crossbows, a hand made Australian cabinet made of 100 different kinds of wood… ‘Impressive, isn’t it,’ laughs Arnouts. Indeed, that is the least there is to say about this building.

'Naive' Germans

‘This building was the headquarters of the crossbow societies guild. When Napoleon conquered our regions, he seized the building: after all he didn’t tolerate any opposition and the archers had a lot of political influence. The building was sold publicly but no one wanted to buy it, as a matter of principle or as an honour to the guild. In the end two “naïve” Germans bought it – without knowing the history of the house.’

Georg and Christian Kreglinger were brothers from a prominent German trader family. The family having 13 children, it was impossible to involve all of them in the father’s business. Georg and Christian got a scholarship to start their own business somewhere in Europe. Their older brother who had moved to Paris, gave his brothers this advice: ‘When you settle somewhere, make sure it’s in a nice building. It is your business card to the outside world and the best way to show people your business is going well.’ ‘We still hold to that principle,’ says Arnouts. ‘After all presenting a part of history has more impact than any elaborate annual report.’

Antwerp trade register number 1

The European economy, and especially the Belgian and Dutch ones, boosted after the French revolution. The Scheldt opened again and the revival of Antwerp attracted a lot of foreign businessmen, many of whom moved into politics. The Kreglinger brothers collaborated actively at the economic reconstruction of Antwerp and took part in the birth of the Chamber of Commerce and Industry. As an honour to their efforts they were given the number one in the register of commerce.

Arnouts: 'Still today we feel like being an Antwerp company, whereas 80 % of our sales are situated in Australia.' We keep on being Antwerp-minded. For all markets in which we have been active during the past 200 years, the port has always played a crucial role, thanks to its central location. The commercial side of the European and American business is also taken care of in Antwerp.’

Tanneries

From the very beginning the Kreglinger brothers have traded in wool and sheepskins. Even today it is still the most important activity of the company. ‘The largest customers for our sheepskins are China and Turkey,’ Arnouts explains. ‘Most of our skins are sold to tanneries. In China they are used especially to make leather coats. Nowadays also sheep skin boots are very popular. In Turkey there is no need for warm sheep skin coats, but there the skins are handled for the Russian market. It a special atmosphere, it even seems like mafia. Shortly before winter, the Russians go to Turkey, load their trucks with coats and pay everything cash. At the end of August the Turkish warehouses are full of coats, at the end of September all of them are sold.’

‘Those warm and heavy coats made of Australian skins are only interesting in a Siberian climate. Here they would be too warm, even in winter. Only the thinner skins come from France or Spain. Now we are expanding our purchase activities in France. As there are only a few tanneries left in Europe, especially the Turkish process skins for the Western European market.’

Diversity

‘During the Colonial Era next to wool we also had important coffee plantations in Congo; now there are only a few left,’ Arnouts tells me. ‘There was a time we produced 60.000 tons of coffee per year, today only 240 tons. The whole infrastructure collapsed at the independence of the country. This was dramatic for the Congolese, but it was time for us to look for other markets.’

Diversity has always been a central thought in the company philosophy of Kreglinger. The most recent branch of the company is the wine industry, more specific the Australian one. ‘Our first activities in Australia date from 1893. England had always been the most important source for our wool, but during the industrial revolution the demand exceeded the supply. In the meantime Australia, as a British colony, had close relations to Great Britain which made it easier to start a business there.’

Kreglinger Wine Estates

'The idea grew during a business trip in Australia when we were invited for dinner,’ the manager of Kreglinger Wine Estates, Charles van Havre, tells me. ‘One of the colleagues didn’t like the wine and said: “We could make much better wine.” At that moment we decided to put our money where our mouth is...'

‘Since 1999 we cultivate wine in Tasmania and Southern Australia. In Tasmania we took over a 25-year old vineyard. In Southern Australia we started from zero. In fact you can consider Tasmania as a geographic and climatologic copy of let’s say the regions of Burgundy and Champagne. Thanks to circumstances ideal for all classic grapes, we cultivate authentic and original wines there.’

‘Australian wines are more and more appreciated outside the continent. Nowadays Australia has a world market share of 4 per cent. France of course still stands out with 70 per cent. But the Australians made good studies of the market and dispose of an important assessment. In contradiction to French wines, we chose to be open about the ingredients, the used proportions and the type of grapes, in favour of our customers. Too often the exact proportions of the ingredients in French wines remain a mystery.’

The biggest amongst the smaller ones

Nowadays the wine activities constitute only five per cent of all Kreglinger activities. But Van Havre expects an increase of the turnover in the future. ‘Our Southern Australian vines have only now achieved a certain maturity. Our first aim was to work out a perfect vertical integration before enlarging the market. 65 to 70 per cent of our wines are sold in Australia, where we have a good reputation. We also have a prominent presence on the English and American market.

Kreglinger wines have four labels: Kreglinger, Pipers Brook, Ninth Island and Norfolk Rise. 'Ninth Island is the most popular Pinot Noir in Australia. We are especially strong in our quality and price. 80 per cent of the Australian wine landscape is dominated nowadays by four big companies. We consider ourselves the biggest amongst the smaller ones. Anyway we are the biggest Flemish winegrower in Australia with about 400 hectares of vineyards, in comparison with 14 hectares for an average European one. It seems we have two home markets: Australia and Flanders, but we would like to conquer the world with our showpiece: the Kreglinger Vintage Sparkling.'

Consumer goods

With its wines Kreglinger produces consumer goods for the first time in its more than 200 years of history. Before the only trade was business-to-business.

'In the meantime all our other activities are being reinforced and elaborated,’ Arnouts says. ‘They all remain equally important. We cannot depend too much on one particular sector, because in the first place we are specialized in natural products and these markets tend to be unstable.’

Next to wool, sheep skins and wine Kreglinger also trades in tropical products (coffee, rubber, papain, etc.), a remainder of the colonial era, and in specialty ingredients and chemicals for pharmaceutical-, cosmetic-, food- and general industries and for agriculture. The branch of chemical products was set up at the moment the textile industry started using more and more synthetic fibres. Lastly Kreglinger also has a logistics unit called Kregspedi. Kregspedi works for both Kreglinger, representing about 30 per cent of their turnover, as well as third party business, which makes up the balance of about 70 per cent.

Synergy

Kregspedi is specialized in the logistic treatment of chemical products and dangerous goods, a consequence of Kreglinger’s experience with chemical products. The logistic branch focuses especially on import and distribution in the EU. ‘At the moment we offer our logistic services to foreign wine producers and we notice a growing interest,’ according to Arnouts.

Despite the diversity in the Kreglinger activities, the company also knows an enormous synergy. Contrary to what you’d expect at first sight, all their activities are linked. ‘There was a time we had branches in more than 40 countries, on every continent,’ according to Arnouts. ‘Now all activities are centralized in our two offices in Antwerp and Melbourne. We try to explore every possibility to expand, for which modern communication technologies offer a lot of possibilities.’

---