This article is taken from the book "Royo. A Family, a Company, a Legacy," written to mark our 50th anniversary in business.
Every month, from Invext Corporation, we share a snippet of our history, full of multiple learnings and values that help to understand where we come from, how far we have come, and what we want our next steps to be. We hope that sharing our vision can help or inspire other family businesses to believe that the best way to honour a legacy is to create a new future for it.
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On many occasions, when a company grows and becomes multinational, it abandons its original essence. As it grew in size and turnover, reaching over seventy countries, this loss of values might have occurred, but the Royo DNA was maintained thanks to an increasingly defined corporate spirit.
For Pascual, that culture with surname Royo is explained because “From the very beginning, I've looked after my team and my people. That close, family-like approach, of empathising with others, has always been a big part of who I am. The small workshop I built from practically nothing, with the help of my team, I was able to transform into a leading business group in Europe.
The growth and professionalisation of the company have not been obstacles to protecting its foundational values. This is the key to understanding how Royo has been able to endure and continue to grow despite the passage of time and economic circumstances.
In 2012, expansion into America took place with Royo Mexico and Royo USA. With the work well done and with investments underway across Europe, both from Spain and Poland, the company could set its sights on expansion into a new adventure: the American continent. During this period, collaborations with other Latin American companies were strengthened. The foundations for initiating Project America were laid. Commercial development began in the American market with the opening of commercial branches in various countries, the USA, Costa Rica, Chile, Colombia, and Peru, and the opening of the third factory in Mexico.
Highlighting the commitment to the world's most important market: the United States. A bold decision was made in 2012 to implement its own delegation, with a commercial office and warehouses in the country. Silvia Royo was tasked with leading this burgeoning project, relocating to the country for this purpose and linking it to her life's journey. Today, ten years later, the Royo family has a solid part of its business in the United States, and one of its components is growing and putting down roots on the continent, facilitating the consolidation of the initiative.
Innovation: a constant in the company
The year of expansion into America is also the year Royo Group received the National Innovation and Design Award 2012 from the then Prince Felipe. This award was due, among other factors, to the inauguration of the Royo Group Innovation Centre, a centre with over six hundred square metres dedicated to the design and improvement of products and processes. Through it, new technological systems and applications were developed and integrated into the company's industrial plan in order to make a significant qualitative leap towards standardisation and efficiency in the design, as well as the production and commercialisation of products.
Project management across the different production platforms was key, but before technology, there were the people. The incorporation of new technologies and new working processes did not change how we interact with the workers or our culture of closeness with them. Indeed, the employees were the first to benefit, as these technologies improved their way of working, adapting it to the new times.
The digitalisation of production processes has enabled Royo to increase both the efficiency of raw material consumption and the optimisation of working times and productivity.
Paradigm shift: the leap to European leadership and the start of the path to world leadership
In 2017, Royo once again leaped continents, this time towards Asia, opening up to the Indian market, the second most populous country on the planet. Royo Kothari India was born and is now a reality. The subsidiary's name, which began operating in September of that year from Bombay, derives from the local partner with whom the multinational allied. Royo continued to explore new opportunities that would allow it to continue growing and spread its efforts around the world.
Years earlier, in 2015, Raúl had reflected on all the years of crisis, change, and growth that had passed since 2008: “We have overcome the most significant global crisis of recent decades, we have opened factories in Poland and Mexico, as well as new commercial offices in America and India. What else do we need to do to take advantage of this important business boost we are experiencing? To be stronger, we need to surround ourselves with the strongest and have the necessary financial coverage that allows us to continue investing and growing without compromising family finances, which were badly hit after the 2008 crisis.”.
In 2016, H.I.G. Europe, the European subsidiary of private equity firm H.I.G. Capital, announced that it had made a significant investment in the share capital of Royo Group.“The objective with H's input. I. G. is to become the European leader in the manufacturing of bathroom furniture and to increase our presence in other areas of the bathroom products segment. The entry of H. I. The capital of Royo Group is part of our One 2020 Strategic Plan.”„, declared Raúl himself at the time.
For H.I.G. Europe, entering Royo was an opportunity to participate in a very interesting sector with many possibilities. The family's work ethic, the solidity of the management team and international presence, as well as sustained growth and financial crisis management, caught the attention of this private equity fund. Although the entry of an investor partner increased the chances of having more capital to expand into a larger number of countries, it also meant the loss of the autonomy enjoyed by a family business.
The family saw it clearly, as Raúl explains: “If we leveraged the financial potential of investment funds for four or five years, we could invest and achieve great results in the strategy. If that happened, we could take the step to look for an industrial partner who would value us as European leaders in the business and to whom we could contribute long-term value for the perpetual continuity of the company..”.
In 2021, Royo's story has a new ally and a new playerThe Roca Group. The Catalan company dedicated to the design, production and marketing of bathroom products acquires 75 percent of Royo Group through the purchase of the majority stake from the American fund H.I.G. The Royo family remains in the company's capital with a 25 percent stake, as well as retaining management, but will have to adopt a different way of doing things, with greater complexity in decision-making, but with more opportunities to carry out its global expansion.
This is how the Royo Bathroom Furniture Competence Centre was born within Roca Group, the global bathroom furniture division of the Roca Group, a collection of leading and prestigious brands that design, manufacture, and market bathroom furniture worldwide.
With this operation, Royo and Roca are joining forces to become global leaders in bathroom furniture. The global turnover exceeds 173 million euros and production is close to 2 million units per year. The new division created by the two firms includes nine production centres located in Spain, Portugal, Poland, the Czech Republic, Russia, China and Brazil, and more than 1800 employees.“The feeling we have with Roca's entry is not one of loss, but of future and long-term prospects for the company.”explains Raúl.
According to James, “Having the world leader in a sector take notice of us and place their trust in us, I see that as a success, the icing on the cake, the reward for the years of hard work by my father and Raúl..”.
From this stage, we can extrapolate several business lessons:
Innovation must permeate everything. Finding new and brave paths to continue growing is innovation. When the project is clear, there are no limits.
2Personas, personas, personas. A company's growth should never affect its relationships with people. For a family business, evolving in this sense is difficult, which is why it is necessary to forge a meaningful corporate culture that embodies the foundational values and relationships with early employees, allowing the founding spirit to be easily passed down through time.
3- Optimism. Never settle, the best is yet to come. Confidence and certainty in the strategies designed are key entrepreneurial skills and, although they must always be accompanied by rigour and professionalism, they become a driving force that leads the entrepreneur to break unimaginable boundaries.
Santiago Royo – CEO of Invext Corporation
