Philippe Pagès & Frédérick Réquier

AMD, the adult incontinence business start-up, has made a success of itself

How was AMD created?

Fréderick Réquier: On finishing my studies, I joined Hygiène et Diffusion, a company owned by Philippe Pagès specialising in diaper production. After moving to a company in a different field, I wanted to set up my own business in the hygiene sector. In 2007, I joined forces with Philippe Pagès - one of the leading specialists in France in the field - having worked with him for several years. After two years of structuring and production development, our Rouvroy plant in northern France began production in 2008 with four machines. Ten years later, we have 11 machines: eight in Rouvroy and three in Saragosse, our second plant opened in late 2018. We have annual production capacity of around 1 billion diapers.

What was the place for a new operator?

F.R.: In theory? None. It's a very capital-intensive industry in which there is no business creation. In Europe, the market is dominated by five groups, with the smallest generating revenues of €500 million, while AMD posted revenues of €85 million in 2018. However, we firmly believed that we were in a strong position with our in-depth knowledge of the sector and a targeted strategy: incontinence pads for adults in the healthcare market. We therefore excluded infant diapers and feminine care products. At the beginning, we focused on retirement homes, healthcare facilities and medical equipment resellers. This more fragmented market is harder for big groups to target. We now also work with nearly all of the supermarkets and hypermarket chains operating in France. To establish our position, we needed to have the best products with the best price-quality ratio. To do this, we worked closely with a machine manufacturer to design bespoke, highly efficient production equipment, while also taking an ingenious approach in terms of our products. We also have a lightweight structure and our experience of the sector means we know how to optimise costs.

How have you made yourselves stand out in this highly concentrated market?

F.R.: This is a business where you need to be close to your clients, in all senses of the word. In terms of logistics, we have implemented an unusual distribution structure with around 15 exclusive concession holders. These partners, which offer the full range of medical equipment, visit our end clients every day and can easily deliver a few boxes of pads. This agility and responsiveness are key. We also provide these clients with inventory and order management software in order to optimise their supplies. In terms of advice, we have a team of 12 nurses covering all of France to work with staff at healthcare facilities and listen to patients.

What are your main development focuses at present?

F.R.: We want to position ourselves in major calls for tenders, both public and private. In 2017, we won the AP-HP contract (Hôpitaux de Paris). This isn't easy as although we are the only 100%-French operator that has chosen to produce in France, buyers - for security or out of habit - still too often favour big international groups. We are also continuing with our international expansion. We currently generate half our revenues from exports but have a lot of room for improvement. For example, we currently represent just 1% of the German market.

We therefore remain modest but very optimistic. The European adult incontinence products market (€3 billion) is growing by 4 % a year.

Why did you get Crédit Mutuel Equity to invest in your company?

F.R.: We wanted the support of an international partner. I met a number of funds but chose Crédit Mutuel Equity for two reasons: the personality of the people we spoke to and the philosophy of this unusual investor, which takes a long-term view and gives us visibility in the implementation of our development projects.

  • 85m
    of revenue
  • 50%
    of revenue from exports
  • 150m
    of production capacity