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Midway through a conversation that has verged on the drily technical, Benoît Potier suddenly demonstrates why he once thought seriously about an acting career. Leaping up from his seat to fetch a report on the potential of hydrogen as a fuel for electric cars powered by fuel cells, Mr Potier then brandishes it in front of him before shoving it in my direction. “It’s not just me saying this: there are 31 organisations behind this study and they all believe the market will be huge!” he exclaims.
The show of animation marks a lurch away from Mr Potier’s generally understated style of speaking. “This is exciting, fact-based analysis,” exclaims the long-serving chief executive of Air Liquide, the world’s biggest producer of industrial gases.
We are talking in Mr Potier’s seventh-floor office at the company’s headquarters in Paris, overlooking the River Seine. For almost two hours, Mr Potier gives what amounts to a tutorial on industrial chemistry, interspersed with his views on why science and engineering are vital to 21st-century economic success.
Air Liquide’s products include a number of exotic formulas, as well as the more familiar carbon dioxide and oxygen. They are produced either on a just-in-time basis in small plants close to where they are used, or sold in batch form inside canisters.
The company has customers in virtually every country, in sectors from microchip manufacturing to dry cleaning. “We [at Air Liquide] have to understand not just the molecules [in the gases] but the details of the thousands of processes [used by customers] and where the products end up.”
With a market capitalisation of €27bn, well above what might be expected for a business with sales of €14.45bn and 45,000 employees, the company can boast that since listing in 1913 it has never suffered a loss. Mr Potier points out that in the 2008-09 crisis the company had to make just a few hundred job cuts – in contrast to the thousands of redundancies during the period at many other industrial groups of a similar size. In February, Air Liquide, in a typically robust set of financial results, revealed a 9.4 per cent rise in net profits for 2011 on sales up 7 per cent.
On the current eurozone crisis, Mr Potier is phlegmatic. He says his company sees only limited negative repercussions because it sells to such a broad spectrum of industries. “If demand is weak in one sector we invariably find it is holding up reasonably robustly elsewhere.”
● Born: September 1957 in Mulhouse, France
● Education: Ecole Centrale des Arts et Manufactures, Paris, in 1979; completed his executive education within the Wharton International Forum and the Advanced Management programme at Insead.
● Career: 1981 joined Air Liquide as an engineer in the research and development division
● 1985-93 held different positions as project manager and business developer in various divisions
● 1994 corporate deputy director of operations and senior vice-president
● 1995 corporate executive
● 2000 appointed chief executive
● 2001 appointed chairman of the management board
● 2006 chairman and chief executive
●Interests: theatre, music, skiing, travelling
Yet perhaps partly because of its steadiness, the company rarely hits the headlines – something Mr Potier finds frustrating. In another nod to the theatrical, he gives vent to mild agitation. “We’re an important company – but how often does the Financial Times write about what we do? We deserve to be a lot better known.”
He voices similar anxieties when pondering what he reckons is a big problem in tempting more young people in Europe and the US to study science and engineering and embark on careers in these areas – something he believes is vital to securing these regions’ future economic competitiveness. He mentions his three daughters. “They are all very bright – but none of them wants to be an engineer.”
One answer, he says, might be to encourage more television shows and drama about science and technology. “When did you last watch a soap opera that had a mathematician or a chemist as the central character?”
Mr Potier demonstrated an enthusiasm for maths and science at school, having first studied Einstein’s theories on relativity when he was just 14. The interest led to him gaining a degree in engineering at the Ecole Centrale des Arts et Manufactures in Paris, one of France’s top academic institutions.
Even after this, however, he was still tempted by a career on the stage, and embarked on a year-long stint as a professional actor in his early 20s, before reverting to technical subjects in 1981 when he joined the central research and development department of Air Liquide. He was promoted to chief executive in 2000, adding the post of chairman six years later.
His short spell in research and development was followed by a move into operational roles, working mainly from Paris but being put in charge of technical projects in different parts of the world. This, he says, added up to an intense and highly personal introduction to globalisation as he found out at close hand about the practicalities of working with a diverse range of people in countries around the world.
He remembers, for instance, one of his first jobs, which was to establish within a period of a few months a gas plant in South Africa, overseeing a small group of varying technical capabilities in which virtually everyone spoke only English – a language he barely understood. That the project succeeded taught him the benefits of “making the most of the skills of a wide-ranging group and of the overall benefits of teamwork”.
The way Air Liquide operates, he says, underlines the way advances in science and technology – even if they are barely understood by most people – gradually add value to industrial processes and as a result improve people’s lives. The company employs 500 scientists and engineers in technical centres around the world whose job involves devising new chemicals or variants of existing ones to increase the usefulness of a range of manufacturing disciplines or products. Examples include adding specific industrial gases to coal or oil to turn solid carbon-based fuels into gaseous ones and so provide “cleaner” energy forms. In the healthcare industry, Air Liquide is devising new types of gas-based anaesthetics or therapeutic remedies.
Other parts of what Air Liquide does might seem more mundane but, Mr Potier points out, they are vital in terms of their overall impact on customer operations. The plant-building and construction divisions of the company work on improving the efficiency of production processes inside Air Liquide’s network of 1,000 plants. “There’s a tendency to think that physical assets don’t matter and that industrial competitiveness is all about ideas,” says Mr Potier. “But our experience indicates this view is wrong.” He explains that every year the company ploughs roughly a sixth of its sales into capital investments.
As a result, Mr Potier says operating costs have fallen relentlessly, enabling the company to cut the average prices of the gases it makes by roughly 2 per cent a year over the past 30 years.
Data for energy use provides a further example of how this operating model works. “In the 1980s it would have required 0.7 kilowatt hour of energy to produce 1 cubic metre of oxygen in an Air Liquide plant,” he explains. “Now the figure is about 0.4 kWh – that’s thanks to the cumulative effect of improved technology and more attention paid to customer needs.”
In discussing Air Liquide’s plans, Mr Potier cannot resist another small burst of rhetoric. The company intends to recruit 30,000 more employees by 2015, mainly in emerging economies such as China and India, and build up to annual sales of about €20bn by 2020. Even though Europe is still highly important, providing about half the company’s revenues, Asia now accounts for approximately a quarter.
“When I joined Air Liquide 30 years ago there were really only about six countries that were important in terms of building up revenues,” he says. Now, that figure is about 85 – the number of countries in which the company has plants. “Every time we devise a new gas or a new application [for the gas] the number of places where we can use it to push up sales is almost 15 times higher than it used to be – that’s a good indication of how globalisation makes a difference.”
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