Araco International has been asserting itself on the toughly competed import market for the past 25 years. Their recipe for success: A focused line-up, their own printing shop in Romania and a wide portfolio of services.
“We are in principle a specialist, albeit a pretty big one,“ said Michel Hofsté, Sales and Marketing Director of Araco International. “Our core business is textile promotional products, but here the segments we sell have a strong focus.“ The headquarters of the company in Enschede, the Netherlands, which is located right next to the German border, proves not least that Araco has in the meantime become an important player in the European industry. The new premises that the company relocated to in 2009 span 4,500 m², comprising of 3,900 m² of warehousing space and 600 m² of offices. Including additionally rented warehousing space, the company boasts 5,000 palette storage places in the Netherlands alone. “Since the company was founded in the year 1990, it has continuously expanded,” commented Hofsté. “We even succeeded in achieving turnover growth every year during the crisis.“ In comparison, things started off modestly: “I began my entrepreneurial career selling number plate holders and other products for car drivers, such as document holders for instance, which I sold among other things at petrol stations and garages,” reported Henk Greftenhuis, founder, owner and Executive Director of the company. “As the business grew, I began to customise the items too and invested in several machines. Gradually, I imprinted more and more products including classical promotional products too. At some point in time, I decided to change my course of direction: I bought a printing shop and from then on started importing promotional products. At the beginning, it was mostly caps, but I soon added selected product groups like terry cloth and fleece items to my collection. That was the start of Araco in its present form. At the turn of the century, I hired several new employees and since then we have been constantly expanding.”
27 employees work in Enschede today, the company turned over around 15 mil. Euros in 2014. It still specialises in a manageably-sized range of products. Araco divides its line-up, which encompasses approx. 300 items, into four segments, each of which has its own brand name: Nilton’s stands for the core segment of caps, hats, woollen hats and other headwear as well as for textiles such as polo shirts, T-shirts and fleece jackets or scarves.
Sophie Muval comprises of terry cloth items such as towels or bathrobes. The two brands Brickstone (workwear such as aprons, kitchen items, safety vests and jackets as well as further safety items) and Seano (leather and travel accessories such as wallets, bags, sunglasses or saddle covers) were introduced in 2014. Individual product groups such as lanyards and seasonal items round off the line-up. “Our new brand structure reflects the specialisation of our portfolio,“ explained Stefan Rölver, Senior Account Manager. “Furthermore, it is a sales tool for the trade and offers their customers high recognition value, without the user coming across the name Araco.“
Far Eastern competence
The Araco office in Peking is the hub of the import business: Here, five employees are responsible for the entire procurement in the Far East. “Our Sales Director in Peking studied in the Netherlands and she speaks Dutch and English as well as her native language, Chinese. These language skills are indispensable, among other things when communicating with producers, who are located in the hinterland,” explained Hofsté. Araco relies on a comparably small circle of suppliers: “We know all of our manufacturers personally, we have long-standing relationships with our ten main suppliers,“ said Greftenhuis. “This gives us a decisive advantage over many generalists.“ Furthermore, thanks to its proximity to its manufacturers, Araco excels with its high competence in the field of project-related special designs. “Tailor-made products account for a considerable share of the turnover,” reported Rölver. “Almost nothing is impossible – we can produce some of the items as special designs for minimum order volumes of just 250 pieces, which can be delivered within six to seven weeks by air freight and within eleven to twelve weeks by sea freight.“ Last, but not least the relatively small pool of manufacturers enables product safety and ethical aspects to be monitored efficiently. “Quality assurance, corporate responsibility and environmental protection are matters close to our hearts,“ stated Greftenhuis. “We are a member of the BSCI and are certified in accordance with ISO 9001 (quality management) and ISO 14001 (environmental management).“
Printing centre in Romania
As a major shareholder, Araco has been relying on its subsidiary in Cluj, Romania to customise its products since 2011. Around 90% of the orders are individualised there. “We only customise last-minute orders in the Netherlands,” explained Hofsté. Ten embroidery machines with over one hundreds heads in total, two fully automatic screen-printing machines, two semi-automatic transfer printing machines, a lanyard transfer printing machine as well as pad-printing, laser and embossing machines are available on-site in Cluj. “We significantly expanded our machine fleet in 2014 again and in addition to the conventional printing and embroidery methods we can now also offer more unconventional techniques such as 3D embroidery, laser punching and material applications,” said Hofsté. The Romanian plant also includes approx. 1,500 m² of warehouse space, so that a certain amount of goods are always available from stock.
“Usually, a truck drives from Enschede to Cluj twice a week and in November and December three to four times a week,” said Rölver. “The embellished goods are already picked and packed in Romania, so that they can be dispatched from Enschede without any further delay. This means we can guarantee fast delivery: Non-customised items from stock can be delivered from Enschede within one to two days, for customised goods from Cluj we calculate two to three weeks depending on the order volume. Especially the German customers profit from this situation: Enschede is located just behind the German border and we also work together with DHL.“ The Romanian printing plant contributes towards our favourable prices: “For the amount it would cost the customers to have an item embroidered in the Netherlands, they can buy a whole cap from us including the embroidery,” underlined Hofsté.
Advice and service
Overall, Arco has evidently positioned itself with its alignment very successfully in this toughly competed market segment also against major full-range stockists. As a comparatively small firm with flat hierarchies and short routes, the company is also more flexible than many of the “Biggies”. Rölver: “Wherever possible, the customer has a fixed contact person for all areas. We have little fluctuation among the staff, most of the employees have been working for the company for years and are very familiar with the individual products – the latter is almost impossible for a full-range stockist. We keep the printing and delivery costs as transparent as possible and offer many additional services such as layout design, sample products, print approval including photos, neutral delivery, mailings as well as warehousing. The relationships to our distributors are very important to us. We are members of several national promotional products associations and intensively strive to uphold direct contact with the customers – at trade fairs or at their premises.“ “Our aim is to make sure that we are among the pool of main suppliers of as many distributors as possible,” added Hofsté. “And we are confident that the coming years will also bring continued stable growth.“ In spite of this, Araco International will in all likelihood always continue to be a specialist – albeit it a pretty big one.