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Essilor, an industry leader in ophthalmic lens innovation and development, has set its sights on capturing a bigger share of the world market. Its new R&D centre will help pave the way for this.
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Xavier Fontanet, CEO and Chairman of Essilor International, comes across in person as soft-spoken and unflappable. But behind this equanimity is a man of great foresight and formidable business know-how - a man who has, in the past 13 years, transformed a previously very French company into a truly global entity, with international sales, manufacturing and R&D networks.
Just look at the figures. Essilor, which manufactures and develops ophthalmic products such as high-technology corrective lenses, has a 25 per cent share of the world market. Indeed, Essilor has risen to its undisputed market leader position in virtually every country it has penetrated. It is no surprise that with manufacturing operations in at least 40 countries, the company was ranked Number One globally by Business Week with annual sales three times that of its closest competitor, Japan's Hoya Corp. Last year, Essilor impressed with sales revenue of more than US$3 billion.
Since taking over the reins as CEO and Chairman in 1991, Fontanet has consolidated the company's business by doing away with on-the-fringe activities such as contact lens and eyeglass frames. This resulted in a leaner and more focussed company that was able to capitalise on its dominant strength - that of manufacturing and processing lenses in sophisticated prescription laboratories. More importantly, Fontanet saw the immense potential of the Asia-Pacific markets. Today, the region contributes around 10 per cent of the company's international revenue, with the possibility of upping to at least 30 per cent within the decade. With over 70 per cent of the Asia-Pacific population suffering from myopia - as recent research shows - this goal appears to be within reach.
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Essilor's presence in the Republic harks back to 1988, with the acquisition of Hilite, then a distributor of Essilor products for Singapore and Malaysia
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GROWING IN SINGAPORE
Essilor's presence in the Republic harks back to 1988, with the acquisition of Hilite, then a distributor of Essilor products for Singapore and Malaysia. The company's Asia-Pacific activities gained ground when Essilor made the strategic decision to locate its Asia-Pacifc headquarters in Singapore in 1996, to manage its regional technical and management operations.
"Since we moved into Singapore, we experienced how your country is connected with Asia," Fontanet marvelled. "Hilite was exporting in virtually every country of Asia...so Hilite and Singapore helped Essilor to build our network of companies in Asia and become number one in our industry today."
Essilor Singapore's HQ is in charge of regional finance, engineering, human resources, training and treasury functions. It is also home to the Essilor Technology Centre, the only local facility with a fully equipped laboratory offering the latest technology in ophthalmic lens processes, services and products. The company has reached another milestone with the opening of the new 900 square metre R&D centre - the largest private sector optometry R&D centre in Singapore.
Essilor has invested at least $12 million in Singapore, and with this R&D centre, which costs around $5 million to establish, the Singapore office is now in a stronger position to work in tandem with its existing local entities on market research, studies and new product launches. The R&D centre will follow the group's main research axis, which is Optics and Materials. The centre will also be integrated into the group's international R&D programmes, such that what is innovated and developed here will be shared with Essilor's other R&D centres, to fully harness the benefits of international competence and knowledge sharing. The R&D centre has a staff strength of eight professionals and the number is expected to increase to 25 by the year 2007.
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It is no secret that Essilor spends around four to five per cent of its annual sales on R&D
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It is no secret that Essilor spends around four to five per cent of its annual sales on R&D, and files almost 180 patents yearly. Half of Essilor's current revenues have, in fact, been generated by products developed only in the last five years. Take its high-tech, anti-reflection coatings for example, which effectively reduce smudging. Such offerings like these have been very well received across the industry, and contribute not only to Essilor's new proprietary product portfolio, but also to its overall bottomline.
VOTE OF CONFIDENCE
"Singapore is today known as a very sophisticated place in IT and electronic expertise," explained Fontanet on why the company is committed to strengthening its operational capacity here. "When operating in Singapore, you are impressed by the spirit of the Singaporean people, the business atmosphere, the efficiency of the public sector and the morale of the population. Of course, we are betting a lot on the ability and dedication of the Singapore people," Fontanet continued. "It is also clear that the proximity and good relationship with India have been key factors in choosing Singapore."
Patrick Cherrier, President of Essilor, Asia-Pacific, revealed that the company received support from EDB under its Innovation Development Scheme but added, "Other countries can also offer financial incentives, but not the technical know-how. EDB allowed us to tap into its huge database and experience."
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SYNERGISTIC RELATIONSHIP
While Singapore is offering multi-fold advantages to Essilor, the company is in turn being a good business citizen, based on the numerous collaborative initiatives it is embarking on within the country. For example, Essilor has teamed up with the Singapore Eye Research Institute to study myopia progression in children and how to solve this problem through the use of specially designed progressive lenses. It is also working closely with Singapore Polytechnic to set up a student attachment programme where interns are provided with valuable hands-on optometry experience. In addition, Essilor is exploring new projects with the Institute of Materials Research and Engineering as well as the Singapore Institute of Manufacturing Technology, to jointly introduce enhanced processes and products.
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"When operating in Singapore, you are impressed by the spirit of the Singaporean people, the business atmosphere, the efficiency of the public sector and the morale of the population."
- Xavier Fontanet, CEO and Chairman, Essilor International
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"Essilor is trying to build a truly international company where the talent of each country, the intelligence of every person equally participate in the growth of the company,"' Fontanet continued. "Essilor will work hard here to be sure we contribute to the success of Singapore and at the same time, construct a stronger Essilor."
And, like everything else Fontanet has set his heart and mind on to achieve, the possibility of this happening is almost assuredly set in stone.
For more information on Essilor, please visit: www.essilor.com.sg
On EDB's Innovation Development Schemes, please visit: Investors section of www.sedb.com
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Another Essilor World-First Innovation
As people age, they may be prone to presbyopia - a condition where the eye loses its ability to focus. Essilor has introduced a new progressive lens, the Varilux Ipseo, the first and only customisable progressive lens that is based on the visual behaviour of the individual wearer. Essilor has tapped into the unique characteristics of each person's physiological ''visual imprint'' to create a revolutionary made-to-measure lens. The result - a lens that the wearer can swiftly adjust to, and which offers exceptional clear distance vision. The Varilux Ipseo also clinched a prestigious Silmo d'Or Award at the ceremony which was held in conjunction at the Paris Silmo 2003 optical trade show.
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