At the beginning of 1989, Nordisk Solar Compagni is the leading electrical wholesaler in Denmark. The company taps into their cash pile, which in 1987 has an assessed net worth of 518 million DKK, as they make their first foreign acquisition; Westbo El Grossist AB in Sweden. This sets off the expected expansion abroad, which the group has been preparing for since the establishment of the subsidiary, Solar International A/S in October 1987.
The executive management states that the expansion will take place over the coming years in a calm and easy pace without any rushed acquisitions and the expansion will primarily target the near markets in Germany, Sweden and Norway.
The past years, the national electrical wholesaler has been investing heavily in the establishment of a modern central warehouse in Vejen. The procurement and inventory functions are centralised and with a ground breaking restructuring of the product distribution, Solar now offers day-to-day delivery to its many contractors and industry customers. A very useful service.
Since the beginning in 1919, Solar has grown into being Denmark’s leading wholesaler. For the first 70 years of the company’s history, it only focused its business on Denmark, Greenland and The Faroe Islands. But now, Solar looks at expanding its business and distribution concepts to the neighbouring markets by acquiring local companies. The increased area of operations is going to ensure Solar future growth. At the same time, the bigger volume will also strengthen the company in a world with increasing competition from international wholesalers.
From a Danish to a Northern European wholesaler
It quickly turns out that stating that the expansion would take place in a calm and peaceful manner, didn’t really fit the bill. A great deal of work and many months’ of negotiations suddenly pays off and the board of directors approves four additional acquisitions, already in the spring of 1989.
Besides Westbo El Grossist AB, the company also acquires Grosseliten AB in 1989. In the coming years, Solar acquires five additional Swedish companies; Elgrossisten Göran Arnesson AB, Elektro Mickie AB, Elektro Elco AB, Electrica AB and Direkt-El AB. Together they form the foundation of Solar Sverige AB, managed by VD Kjell Svensson.
As the Berlin wall fell in November 1989, Solar finishes a due diligence regarding the acquisition of the Northern German wholesaler Elektro Vertrieb Nord GmbH with headquarters in Neumünster. During the coming years, the purchase is followed by the additional acquisitions of the Berlin wholesaler Georg Herrchen Gmbh & Co KG and the company R. Janke GmbH in Lübeck. Together they form the basis of the then Solar Deutschland GmbH.
In 1996, Solar acquires the distinguished Dutch wholesaler Brinkman & Germeraad BV, plus associated companies in The Netherlands and Belgium. A new, modern central warehouse is established and as Solar later acquires all shares in Groothandel Electro Automatisering Smelt BV, they form the foundation for the national technical wholesaler that we know today as Solar Nederland B.V.
Parallel to the establishment of Solar Nederland, Solar succeeds in acquiring several smaller wholesalers in Poland in 1998. Solar embarks on the development and implementation of a new common IT platform in Poland, which is a big part of the merger. And as headquarters and a central warehouse is established in Lodz west of Warsaw, the company Solar Polska Sp. z o.o. is born.
Despite that the initial plan was to expand in the nearby markets, 10 years go by before Solar manages to plant its flag in Norway. In 2000, Siemens Elektroengros AS Norge becomes part of Solar. The additional acquisition of Elektrogrossisten Sør AS and the subsequent establishment of a central warehouse at Gardermoen, Solarians are quick and efficient at placing the corner stones of the Solar Norge A/S, which we know today.
Merely 6 months after the agreement with Siemens Elektroengros is signed in Norway, Solar manages to acquire the Finish company Viikinkikaapili OY in Helsinki. However, it turns out that it is not possible to make further acquisitions and keep up a sufficient volume that is needed to keep the company afloat. Therefore, after a few years, Solar sells the business activities in the Finish subsidiary to the electrical, heating and plumbing wholesaler Ahlsell.
Competence and concept development:
In order for the acquisitions to add the wanted synergy to Solar, the new companies abroad must focus on developing technical competences and introducing Solar’s concepts. It was an adopted principle and Solar demanded that the new subsidiaries established central warehouses, developed electronic business solutions and implemented night delivery, in order for them to live up to Solar’s wholesaler concept:
The customer must receive the right product, at the right time, in the right place and in the right amount and accompanied by the right technical and commercial support.
Industry change and a new business strategy
After about 10 years with an efficient horizontal market growth strategy and the acquisition of more than 30 companies, Solar holds the position as a Danish owned wholesaler with seven subsidiaries in the Northern European market, at the turn of the millennium.
In 2003, the executive management of the group decides to change and adapt the growth strategy so it matches the changing industry. The change is found in several markets where so-called technical entrepreneurs take on delivery and installation of complete technical solutions within electrical, heating and plumbing and ventilation.
Consequently, Solar’s business strategy is updated and rephrased in 2004: ”Wholesaler trade and distribution of electrical, heating and plumbing and ventilation components”
The message is clear and not to be mistaken. Solar’s former horizontal growth strategy needs to become more vertical. Now, growth should come from an increased market penetration in the existing market and based on a significantly expanded product assortment.
Already in September that same year, the executive management of Solar Danmark announces the establishment of a heating and plumbing division.
Back in the 90s, Solar International was an expanding business. This film takes us on a tour through the Solar countries, our offices and central warehouses. Back then, we were also situated in Finland and Germany.
In 1989, the first brick of the Berlin wall fell to the ground. The video shows a few images from that very historical period.