Thomas Babacan is the chief executive of AHT, a leading commercial fridge and freezer group, which supplies food retailers from top German discounters to independent corner shops. A keen sportsman at school, competition is in Babacan’s blood. The motto: ‘As long as better is possible, good is not good enough’ hangs on his wall and drives his corporate philosophy. Having joined AHT less than a year ago, the business is already benefiting from the Babacan approach. ​

THE INTERVIEW

 

THE INTERVIEW

Striving for excellence​

When Thomas Babacan was 16 years old and still at school in Frankfurt, he was already earning money – as a tennis coach. A keen sportsman, he played tennis whenever he could and competed in tournaments across Germany. “I was a reasonably good tennis player so I earned money from coaching right through until my twenties,” he says. 

Babacan’s interest in sport was not just spurred by a desire to play but also by a desire to win. “I hate to lose. I am fiercely competitive and I really want to win. Even when I was practising tennis, I loved competing against someone else, rather than just against myself. Some people – and some companies – are afraid of comp-etition. I love it because it stretches you and encourages you to think of different solutions,” he explains. 

That spirit has carried Babacan through an 18-year career in industry, starting in 1999, when, aged 30, he joined the treasury department of Balzers & Leybold, an industrial vacuum business, which was part of the Swiss Exchange-listed conglomerate Oerlikon Group. 

A rank outsider

“I was approached while I was still finishing my master’s at Goethe University. I was at a tennis camp when my girlfriend called me to say the HR department had rung, asking if I would like to join the treasury division. I said: ‘That sounds very interesting but what’s treasury?’ They took me on anyway,” he says. 

Babacan rose through the ranks at speed, becoming CEO of Oerlikon Leybold Vacuum at the age of 35. “I was the youngest ever CEO of that business and the first person to lead it who was neither a PhD nor an engineer,” says Babacan.

Young and gifted

Despite his relative youth and lack of specialist knowledge, Babacan did well, ultimately becoming COO of Oerlikon Group, a company with thousands of employees worldwide. He was also CEO of Oerlikon Textile, Oerlikon’s largest subsidiary at the time and the biggest textile manufacturing business in the world. “I ran Oerlikon Textile for nearly three years. It was a global business with 30 manufacturing sites worldwide and 120 locations,” he explains.

Oerlikon Textile’s revenues almost doubled under Babacan’s leadership to nearly SFr2 billion but the parent company underwent many changes in the years following the financial crisis, and in 2011 he left to take up new challenges.  

Itchy feet 

The following year, he joined a family office, where he was tasked with building up its inter-national presence. The idea appealed, not least because Babacan was brought up in many different places around the world, a background that left him with a passion for travel and an ease with different cultures. 

“My father was an engineer and we travelled extensively. When I was a schoolboy, we spent holidays in countries across the world, such as South Africa, Singapore, Saudi Arabia, Botswana and India. It was both a pleasure and a privilege, and when I was older I would sometimes work in plants overseas while visiting my father. To this day, I love working with international businesses,” he says. 

Size matters

Babacan found his new life interesting, but after around 18 months he began to hanker for the industrial world once more. In 2014, he became CEO of valve manufacturer VAG Group, part of US-listed Rexnord. “I had two job offers, VAG and another one, which was a much bigger company. I could not decide between them but I was talking to my wife, who is much smarter than I am, and it became clear that I much preferred running a smaller business than a larger one. 

“When you are dealing with thousands of employees, you can’t really be close to the people; you can’t get your arms around the company. But with a smaller business, you know the people, you know the customers and when you make a decision, you see the impact,” he says. 

Passion over ego

“At that point, I realised my indecision was all about ego. So I decided to ignore the ego and go with what I really wanted to do,” he adds.

Leading VAG – and joining Reynord’s executive board – was fulfilling but, following some strategic changes at the parent company, Babacan decided to move on. In June 2016, he became CEO of AHT Cooling Systems. “I talked to Bridgepoint and the team was very compelling. I also did some external due diligence on AHT and the references were very favourable. People said it was a good company with a strong brand. The growth story is impressive too,” he says. 

Based in Rottenmann, a small town in Austria, AHT is a leading manufacturer of chilled and frozen cabinets for supermarkets and discount chains, making almost 300,000 units a year. With annual turnover of around €400 million, the group supplies major household names across the food retail sector, owns production sites in China and Brazil and works with sales affiliates worldwide.

Just chilling

Well known for its supermarket freezers and chilling cabinets, refrigerated shelves and bottle coolers, AHT is also the number one manufacturer of ice-cream chests, counting the world’s largest producers among its customers. These food manufacturers install branded ice-cream chests in a multitude of independent retailers, and AHT is a key supplier. “I have been involved in many different industries during my career but I have never had dealings with the retail industry and this was a big attraction for me. I thought it would be interesting and it really is. Of course, AHT is a B2B business but we are heavily influenced by the consumer – their buying habits have a direct impact on us,” says Babacan. “I really enjoy that aspect of the business. It’s very dynamic, it means you have to be flexible and change becomes part of your routine – which really means that there is no routine,” he adds. 

AHT traces its history back to 1442, when an ironworks was established in Rottenmann. But its modern incarnation dates to the beginning of this century, when AHT became increasingly well known as an industrial fridge and freezer specialist. 

When you are dealing with thousands of employees, you can’t really be close to the people; you can’t get your arms around the company. But with a smaller business, you know the people, you know the customers and when you make a decision, you see the impact”​

Environmental leader

In the vanguard of ecologically sound technology, AHT pioneered the introduction of environment-ally friendly cooler units, using propane as a refrigerant rather than harmful greenhouse gases. Some of its chilled cabinets channel the energy created by the cooling process to produce heat for retail sites as well, further reducing energy consumption.

“From the start, I was drawn to AHT’s focus on green technology, freshness and innovation. The amount of energy that the company’s environmentally sound solutions have saved over the past decade could power a medium-sized town for a year,” says Babacan. 

AHT is highly innovative in other spheres too, specialising in so-called “plug-in” fridges and freezers, which are easy to install, highly flexible and particularly in keeping with current food retailing trends. 

Plug it in and go

“Traditionally, fridges and freezers were built-in, particularly in hypermarkets. But today’s consumer increasingly prefers smaller, local shops and this is where plug-in systems come into their own. Retailers can just plug them in and get started and they can be moved around easily so they are much more flexible,” says Babacan. 

Having been at AHT for less than a year, Babacan is impressed with the business but ambitious to deliver further growth. “This is an excellent company with really good people. It’s one of the biggest employers in the region and many people have been here for years – some are even second generation. That breeds both loyalty and expertise. Also, it may sound slightly sentimental but being here in the middle of the mountains does, I believe, encourage our people to think about green technology and ecological solutions,” he says. 

Combating complacency

“However, given that my motto is ‘As long as better is possible, good is not good enough,’ I believe there is real room for improvement and expansion at AHT. I truly believe that great people are the most important asset of any business so we need to make sure that we have the right people on board in the right positions and then empower them. Some of these people are already here but it is also good to bring in external appointments to encourage business development,” he adds. 

To that end Babacan has made several new appointments - a group COO, a head of procurement, a head of product management and a head of customer service. New general managers have been appointed in Brazil and China, the US management team has been upgraded and an office has  been been opened in Charleston, South Carolina. “The US is our number one priority There are huge opportunities across the States, especially as consumer tastes veer from hypermarkets to smaller, local supermarkets,” says Babacan. 

Reassuringly, AHT’s initial expansion into the US will take place in partnership with one of its largest customers, a European discounter with strong trans-atlantic ambitions. “Our market share is reasonably high in Europe but it’s still very low in the US and our ‘plug-in’ solutions are pretty rare so we are already seeing interest from potential new customers over there,” Babacan explains. 

Physical expansion

The company is not seeing any great impact from online retailing either. “Everyone talks about online shopping, but at the end of the day retailers need cooling systems and that’s what we make. Also, discounters are our biggest customers and they’re expanding their physical networks, while some of the biggest food retailers are migrating from hypermarkets to smaller supermarkets and those are our sweet spot,” says Babacan. 

It has been many years since Babacan last held a racket, but the attitude that helped him win games as a youth remains an integral part of his personality and approach to business. 

“Our market is highly competitive but that’s a good thing. Nothing is more damaging than staying at the top of your game for too long. That encourages laziness and complacency. So far, we are the number one provider of plug-in solutions but others are following us so we have to stay ahead of the pack. That comes from investment in innovation and in people. And that’s what we intend to do,” he says. 

Babacan is particularly motivated to deliver results at AHT, as he has personally invested in the business. “I’ve always felt like an entrepreneur and tried to act like one in the past, behaving as if the company’s money is my money. Now it is – and other colleagues are invested too – and that creates a different spirit and drive,” he adds 

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Striving for excellence

AHT is a B2B business but we are heavily influenced by the consumer – their buying habits have a direct impact on us. I really enjoy that aspect of the business. It’s very dynamic”​

I hate to lose. I am fiercely competitive
and I really want to win”​

Great people are the most important asset of any business so we need to make sure that we have the right people on board in the right positions and then empower them”​

When you are dealing with thousands of employees, you can’t really be close to the people; you can’t get your arms around the company. But with a smaller business, you know the people, you know the customers and when you make a decision, you see the impact”​

AHT is a B2B business but we are heavily influenced by the consumer – their buying habits have a direct impact on us. I really enjoy that aspect of the business. It’s very dynamic”​

Great people are the most important asset of any business so we need to make sure that we have the right people on board in the right positions and then empower them”​

Itchy feet 

The following year, he joined a family office, where he was tasked with building up its inter-national presence. The idea appealed, not least because Babacan was brought up in many different places around the world, a background that left him with a passion for travel and an ease with different cultures. 

“My father was an engineer and we travelled extensively. When I was a schoolboy, we spent holidays in countries across the world, such as South Africa, Singapore, Saudi Arabia, Botswana and India. It was both a pleasure and a privilege, and when I was older I would sometimes work in plants overseas while visiting my father. To this day, I love working with international businesses,” he says. 

Size matters

Babacan found his new life interesting, but after around 18 months he began to hanker for the industrial world once more. In 2014, he became CEO of valve manufacturer VAG Group, part of US-listed Rexnord. “I had two job offers, VAG and another one, which was a much bigger company. I could not decide between them but I was talking to my wife, who is much smarter than I am, and it became clear that I much preferred running a smaller business than a larger one. 

“When you are dealing with thousands of employees, you can’t really be close to the people; you can’t get your arms around the company. But with a smaller business, you know the people, you know the customers and when you make a decision, you see the impact,” he says. 

Passion over ego

“At that point, I realised my indecision was all about ego. So I decided to ignore the ego and go with what I really wanted to do,” he adds.

Leading VAG – and joining Reynord’s executive board – was fulfilling but, following some strategic changes at the parent company, Babacan decided to move on. In June 2016, he became CEO of AHT Cooling Systems. “I talked to Bridgepoint and the team was very compelling. I also did some external due diligence on AHT and the references were very favourable. People said it was a good company with a strong brand. The growth story is impressive too,” he says. 

Based in Rottenmann, a small town in Austria, AHT is a leading manufacturer of chilled and frozen cabinets for supermarkets and discount chains, making almost 300,000 units a year. With annual turnover of around €400 million, the group supplies major household names across the food retail sector, owns production sites in China and Brazil and works with sales affiliates worldwide.

Just chilling

Well known for its supermarket freezers and chilling cabinets, refrigerated shelves and bottle coolers, AHT is also the number one manufacturer of ice-cream chests, counting the world’s largest producers among its customers. These food manufacturers install branded ice-cream chests in a multitude of independent retailers, and AHT is a key supplier. “I have been involved in many different industries during my career but I have never had dealings with the retail industry and this was a big attraction for me. I thought it would be interesting and it really is. Of course, AHT is a B2B business but we are heavily influenced by the consumer – their buying habits have a direct impact on us,” says Babacan. “I really enjoy that aspect of the business. It’s very dynamic, it means you have to be flexible and change becomes part of your routine – which really means that there is no routine,” he adds. 

AHT traces its history back to 1442, when an ironworks was established in Rottenmann. But its modern incarnation dates to the beginning of this century, when AHT became increasingly well known as an industrial fridge and freezer specialist. 

Environmental leader

In the vanguard of ecologically sound technology, AHT pioneered the introduction of environment-ally friendly cooler units, using propane as a refrigerant rather than harmful greenhouse gases. Some of its chilled cabinets channel the energy created by the cooling process to produce heat for retail sites as well, further reducing energy consumption.

“From the start, I was drawn to AHT’s focus on green technology, freshness and innovation. The amount of energy that the company’s environmentally sound solutions have saved over the past decade could power a medium-sized town for a year,” says Babacan. 

AHT is highly innovative in other spheres too, specialising in so-called “plug-in” fridges and freezers, which are easy to install, highly flexible and particularly in keeping with current food retailing trends. 

Plug it in and go

“Traditionally, fridges and freezers were built-in, particularly in hypermarkets. But today’s consumer increasingly prefers smaller, local shops and this is where plug-in systems come into their own. Retailers can just plug them in and get started and they can be moved around easily so they are much more flexible,” says Babacan. 

Having been at AHT for less than a year, Babacan is impressed with the business but ambitious to deliver further growth. “This is an excellent company with really good people. It’s one of the biggest employers in the region and many people have been here for years – some are even second generation. That breeds both loyalty and expertise. Also, it may sound slightly sentimental but being here in the middle of the mountains does, I believe, encourage our people to think about green technology and ecological solutions,” he says. 

Combating complacency

“However, given that my motto is ‘As long as better is possible, good is not good enough,’ I believe there is real room for improvement and expansion at AHT. I truly believe that great people are the most important asset of any business so we need to make sure that we have the right people on board in the right positions and then empower them. Some of these people are already here but it is also good to bring in external appointments to encourage business development,” he adds. 

To that end Babacan has made several new appointments - a group COO, a head of procurement, a head of product management and a head of customer service. New general managers have been appointed in Brazil and China, the US management team has been upgraded and an office has  been been opened in Charleston, South Carolina. “The US is our number one priority There are huge opportunities across the States, especially as consumer tastes veer from hypermarkets to smaller, local supermarkets,” says Babacan. 

Reassuringly, AHT’s initial expansion into the US will take place in partnership with one of its largest customers, a European discounter with strong trans-atlantic ambitions. “Our market share is reasonably high in Europe but it’s still very low in the US and our ‘plug-in’ solutions are pretty rare so we are already seeing interest from potential new customers over there,” Babacan explains. 

I hate to lose. I am fiercely competitive and I really want to win”​

Physical expansion

The company is not seeing any great impact from online retailing either. “Everyone talks about online shopping, but at the end of the day retailers need cooling systems and that’s what we make. Also, discounters are our biggest customers and they’re expanding their physical networks, while some of the biggest food retailers are migrating from hypermarkets to smaller supermarkets and those are our sweet spot,” says Babacan. 

It has been many years since Babacan last held a racket, but the attitude that helped him win games as a youth remains an integral part of his personality and approach to business. 

“Our market is highly competitive but that’s a good thing. Nothing is more damaging than staying at the top of your game for too long. That encourages laziness and complacency. So far, we are the number one provider of plug-in solutions but others are following us so we have to stay ahead of the pack. That comes from investment in innovation and in people. And that’s what we intend to do,” he says. 

Babacan is particularly motivated to deliver results at AHT, as he has personally invested in the business. “I’ve always felt like an entrepreneur and tried to act like one in the past, behaving as if the company’s money is my money. Now it is – and other colleagues are invested too – and that creates a different spirit and drive,” he adds 

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Bridgepoint  |  The Point  |  May 2017  |  Issue 31