A breed APart
Published: ASIA
The difficult financial times of the last 18 months have proved challenging for companies in all industries. But one manufacturer in the audio industry has been able to grow through the recession
Providing value for money is one factor that plays an important role in the design of APart equipment. ‘Through the entire production chain that is essential to us. From scratch we think about the price that we want to bring a product to market at,’ says director of sales and marketing, Kris Vermuyten. He feels this focus has meant the economic downturn hasn’t been an entirely bad experience for the company. ‘Last year the philosophy changed entirely; people wanted good value for money and the brand mattered less. For us that was good, we kept growing last year which, under the circumstances, was amazing.’ So can the experience of APart – a professional audio brand from the Audioprof Group – suggest a safe course through difficult financial waters?
Situated on the outskirts of the Belgian port city of Antwerp, the Audioprof Group produces and markets loudspeakers and electronics for use in various applications from bars and restaurants to public transport. It has been an interesting journey for the company to get to this point, and one that has included several different business models.
Audioprof was founded by CEO Tom Gheysens as a rental company and quickly became one of the biggest installers of bars and restaurants in Belgium. ‘After a couple of years we decided to move away from this area and try our luck in the fixed install public address market,’ explains Mr Vermuyten. ‘Pretty soon we became one of the leading install companies in Belgium.’
As the installer became involved with more projects, it decided to start importing some products of its own, such as ceiling speakers, from the Far East as a way of maximising potential revenue. ‘We were using a couple of thousand of these products a year and we had to give them a name. Basically that was the start of APart.’
At this point, the company was also distributing other brands, but it was not happy with the quality. ‘That was the main reason to bring APart to the next level,’ says Mr Vermuyten. The change in focus also spurred the company to move away from OEM equipment and start to build its own kit. ‘We said, from now on it’s our own brand, our own design and our own philosophy that we put into it.’
With this change in direction, in 2004 the company found it had become not only an installer and distributor, but also a manufacturer. ‘At that point we were a competitor of our own brand and of our customers, so we decided to stop being an installer and distributor and purely focus on APart. Every single development that has happened since then has focused on our own product developed in Belgium.’ The move away from OEM did not entirely cut Audioprof’s ties with the East, however - while the products are designed and developed in Belgium, manufacturing remains in Asia.
The company’s experience on the installation side of the business has given it an insight into the way manufacturers should design their products. It aims to create equipment that is different from what is already available on the market but with the principal idea of offering ease for the installer, alongside a competitive price. ‘We have been an installer ourselves; we know how hard it is,’ Mr Vermuyten reasons. ‘We are trying to be the installers’ friend. We try to make their jobs easier. Which product would you choose, the one that’s easy to install or the one that’s harder?’
This philosophy is clearly good for business and can be seen throughout Audioprof’s R&D strategy. The first stage of this process is simply listening to what the customer wants. This enables the company’s team of designers to produce the kinds of for-purpose products that have been essential to making the APart brand a success. ‘These are vital things, but it’s easier said than done,’ stresses the sales and marketing director. ‘We want to build products that are exactly what people want. They need to be different from what is on the market and have that extra feature that isn’t available on any of the others.’
Of course, one of the key points when attempting to provide value for money is how well the equipment performs once it has been installed. In an increasingly cost-aware market, installers are not only looking at the initial cost of a product when making their selections, but also its overall quality. It’s a delicate balance that Mr Vermuyten has been keen to find. ‘Reliability is extremely important to us,’ he agrees. ‘I’m not claiming that we never have a product that fails, because the indestructible product doesn’t exist. When a product does fail you need to take responsibility, and that is another thing that is a key value for the company – say what you do and do what you say.’ Nevertheless, the manufacturer believes that building reliable products starts with each model’s development. ‘If you develop a good product, reliability issues will be far less than when you start off with the wrong base.’
The production process is entirely outsourced to multiple suppliers in the Far East. This enables the company to make individual judgements based on quality thresholds, but always with the caveat of looking back to the essential point of the price at which the completed product will go to market. ‘The advantage of this is that for each development you can pick the preferred supplier. We know where good products are being made and who the bad manufacturers are, that’s quite clear. There is an ongoing process of evaluation for our suppliers.’
The APart products are aimed solely at the fixed install market. ‘We stick to what we are good at,’ says Mr Vermuyten. ‘You will not find us developing line arrays, no matter how tempting that is. We develop products for our niche, which means small- to mid-sized applications for fixed install.’ This policy has provided the business with steady growth and brought it respect in its sector, as well as arguably providing it with an invaluable position in these difficult economic times.
But perhaps the most significant reward for APart of focusing on a niche, listening to what customers want and finding that delicate balance between quality and cost has been the development of its biggest selling design thus far, the SDQ5P active stereo loudspeaker set. With this product the company approached the market in a different manner to its competitors, with the specific aim to providing some unique features in a crowded sector. Mr Vermuyten explains: ‘This is not the only product of its type on the market, and some may even be better, but they are two or three times the price.’
In an industry that tends to bracket brands into specific product groups, it’s no wonder that APart has become best known for its loudspeaker ranges, but it is keen to point out how deep its portfolio actually is. ‘We do the full install kit – loudspeakers, amplifiers, pre-amps and sound sources, such as CD and media players,’ agrees Mr Vermuyten. The manufacturer will continue to develop all of these products as to date this approach has created stable growth for the company.
Audioprof goes to market with a distributor model for its APart brand, working with an exclusive partner in each country. Currently its biggest market is Europe, but it is expanding towards theMiddle East and Africa. For the Asian market the company is still ‘hesitant’ because it feels it needs to be ready for it. ‘We want to do Europe in a proper way, then try the Middle East before taking it one step further. All markets are different and exploring a new market is not done overnight, you will not be instantly accepted.’
Clearly this approach is proving effective - while the company has been growing steadily, it recently reached a point where it needed further investment to take it to the next level. This came in 2009 in the shape of Belgian family owned investment company 3D-Participaties. ‘If we wanted the company to grow further then we needed know-how,’ explains Mr Vermuyten. ‘At first we were looking for a partner within the audio industry, but in order to stick to our company’s culture we decided it would be best to look for an external partner. The issue was to find a partner that would commit to the long-term view we had in mind.
‘3D is not a typical investment company, it believes in the growth potential of companies and invests with an open end,’ says Mr Vermuyten. ‘Its idea is to create stable growth and added value, that’s why it fits so well - it wants to grow this company big with respect to the values that we have.’
One of the results of the growth and investment is that the company has just moved to a new headquarters. While the move was necessary, Audioprof was determined that it would not be done at the expense of the growth of the company. ‘Just because we have a new building does not mean fewer products will be developed – this is essential to us.’ Mr Vermuyten sees the new location as ‘facilitating growth. We are very happy with the new building, it’s beautiful, but it is because of the growth of the company, not to show off. This is just what we needed.’
The HQ houses the R&D team, as well as all the administration, sales and marketing. It also acts as a warehousing facility for the Belgian market as well as the base for tech support. ‘Production and part of the QC is done in the Far East, and the warehousing is done at the port of Antwerp. All the rest is done from the new building.’
With the move to the new HQ complete, thoughts at Audioprof are now turning towards the future. For this, Mr Vermuyten sees the APart brand developing the company rather than the other way round. ‘We have an idea of where we want the brand to go to - we want to focus on the niche we are in, and do what we are good at better than our competitors.’
The long-term view is clearly in evidence with Audioprof. It has taken a realistic approach to its aims for growth and picked an area of the industry that it is entirely focused on. By sticking to its principles and showing good management, the company has built itself an enviable reputation. It has taken advantage of the shift in customer requirements through the recession to provide innovative equipment at a price point in tune with current needs. The challenge now is to build on this as it enters new markets around the world.