SociéTé Bic S.A. Business Information, Profile, and History

Company Perspectives:

We offer simple, inventive and reliable choices for everyone, everywhere, every time.

Honor the past, invent the future.

Our vision and our philosophy are central elements of our culture, guided by our shared values: ethics, responsibility, teamwork, simplicity, and ingenuity.

Since its founding more than 50 years ago, BIC has built its success on a clear vision: to make top-quality, affordable BIC products available to everyone. While responding to the need for new product lines, the company continues to fulfill this mission by observing three fundamental values: A BIC product, above all, is designed to perform a specific function--draw a line, produce a flame, shave a hair. Design and technology reflect the efficiency with which each product carries out its function. BIC products make the consumer's life easier.

History of SociéTé Bic S.A.

Société BIC S.A. (Bic) is the world's leading manufacturer of ball-point pens, selling some 22 million pens and other stationery items every day. The company's ball-point pens--which revolutionized the writing world upon their introduction in the late 1940s--remain its core product, and sales of pens and stationery items, including the Wite-Out and Tipp-Ex brands of correction products, represented 52 percent of the group's sales of EUR 1.37 billion ($1.9 billion) in 2004. One of the world's best-known brands, Bic is almost equally recognized for its disposable lighters, launched in the mid-1970s, which continue to sell more than four million each day. Lighters account for 25 percent of group sales. Bic also is a top contender in the global disposable shaver market, selling 11 million razors daily, which contributes an additional 19 percent to sales. Bic also has acquired a strong stable of brands, including luxury pen maker Sheaffer, Conte pencils, Stypen and Tipp-Ex, both acquired in 2004, and Wite Out, as well as the new Bic Kids brand, launched in 2004. Beyond its core consumer products, Bic produces windsurf boards, kayaks, and similar sports equipment under its Bic Sports subsidiary. The company also operates Bic Graphic, which provides promotional products to the corporate market. Bic has been an international operation almost from its beginning; in 2005, the company included 23 factories worldwide, with sales and distribution to 160 countries. The North American and Oceania markets accounted for 46 percent of sales. Western Europe represented 33 percent of sales. Eastern Europe, the Middle East, Africa, and Asia added 8 percent to sales, and Latin America generated 13 percent of the group's sales. Listed on the Euronext Paris Stock Exchange, Bic is led by Bruno Bich, son of the company's founder.

Writing Revolution in the 1950s

The first "practical" writing pens, such as developed by Lewis Waterman in 1884, began to appear in the late 19th century. Yet these pens remained of the fountain pen variety, and retained many of their disadvantages, such as the need to refill frequently, and a tendency to leak. The first patents for a new type of "ball-point" pen were filed toward the end of the century. One of the earliest of these was filed by John Loud, a New York tanner, in 1888. Loud's pen featured a ball point, and was designed to write on leather. Yet Loud never launched production of his ball-point pen.

The next step forward in the development of the ball-point pen came in the 1930s, when Hungary's Ladislao (or Laszlo) Biro took up the cause. Biro had a gift for invention--at a young age, he had invented a manual washing machine that brought him some success. During the 1930s, while working as an editor for a cultural magazine, Biro became frustrated with his fountain pen, the sharp tip of which often tore at the paper. Yet on a visit to the printer, Biro recognized the potential for developing a pen capable of using a thicker ink such as used in a printing press. Biro and brother George, a chemist, began working on a prototype for a new type of ball-point pen, coming up with their first design by 1938.

In that year, however, the Biros fled Hungary for Paris. While on a vacation in Yugoslavia, the brothers had a chance meeting with the president of Argentina. Impressed by the Biros' ball-point pen design, the president invited them to immigrate to Argentina. Once set up in Buenos Aires, the Biros continued working on their ball-point pen. By 1943, the Biros had developed a workable design, filed for a patent, and set up a company to begin manufacturing the pens. The new type of pen proved a quick success in Argentina, and was then introduced in the United Kingdom, where it also became a quick seller. At the same time, Milton Reynolds launched a copy of the pen (which had not been patented in the United States) and was soon joined by others.

Yet the success of the early generation of ball-point pens was short-lived. By the late 1940s, as Biro's and other designs revealed their own flaws, including a propensity for leaking, sales of ball-point pens dropped off dramatically. New designs arrived to take their place, such as the Parker company's Jotter and the Frawley company's Papermate, both of which became popular sellers in the 1950s.

The true ball-point revolution, however, arrived from France in the 1950s. Baron Marcel Bich, whose family originated from Italy and had received their title from King Charles Albert of Savoy in 1848, had started his career as a door-to-door salesman in France. Bich later went to work as a production manager for an ink manufacturer, before gaining a background in working with plastics and using molding technology. When the first ball-point pens began to arrive in France in the mid-1940s, Bich was alarmed at their poor quality, and recognized the potential for developing an improved ball-point design.

In 1945, Bich and partner Edouard Buffard bought a pen factory in Clichy, near Paris, launching production of fountain pens and mechanical pencils. But Bich was determined to launch a new ball-point pen design, and in 1950 acquired the patent rights from the Biro brothers. Bich began studying the different ball-point pens then available, even using a microscope to examine their construction. By 1952, Bich had succeeded in creating his own design--a streamlined pen made of clear plastic that was far less prone to leaking than existing designs, was able to write upside down, and could reportedly draw a line more than two kilometers long. Of importance, Bich's design could be sold very inexpensively, with an initial price set at just 50 centimes, or about one cent.

Bich also recognized the need for a catchy name for his product and dropped the "h" from his name to create what was to become one of the world's best-known brands: BIC. The product was instantly successful; by 1954, the company had sold 21 million pens. Bic was an international success almost from the start, as the ball-point pen became a strong seller throughout Europe. By 1953, the company's sales topped more than 40 million pens per year.

Bic expanded beyond Europe in the mid-1950s, opening a subsidiary in Brazil in 1956, before expanding into nearly every South American market. That year, the company also launched a successful follow-up to the original Bic, a retractable ball-point called the M10 Clic, and later known as the Bic Clic. The company's international expansion continued, with an entry into the Middle East and Africa. In the meantime, Bic sought an entry into the vast U.S. market.

That entry came in 1958, when Bic paid $1 million to acquire a 60 percent stake in the Waterman Pen Company, based in Connecticut. Once the world's largest manufacturer of fountain pens, Waterman had fallen on hard times with the skyrocketing sales of ball-point pens in the 1950s. Following the acquisition, Bic discovered the full extent of Waterman's financial problems--and added the remaining 40 percent as part of the original purchase price. The U.S. operation then took on the name of Waterman-Bic Pen Corporation. The company's entry into the United States, where the Bic was launched as the Bic Stick, was backed by a highly successful advertising campaign based on the slogan, "writes first time, every time."

Consumables Innovator in the 1970s

Bic expanded again in the late 1950s, buying Sweden's Ballograf in 1959. The company entered the Japanese market in the mid-1960s. By the end of that decade, Bic had begun its first efforts to diversify beyond its ball-point pens. In 1969, Bic launched a division producing promotional items for corporations, which formed the basis for later subsidiary Bic Graphic.

Yet low-cost, consumable goods remained the company's bread and butter. After going public with a listing on the Paris Stock Exchange in 1972, Bic launched a new international success: a disposable cigarette lighter. The butane-filled Bic Lighter represented a new success in a market long dominated by refillable--and often leaky and unreliable--lighters. Yet again, Bic had not been the first to produce a disposable lighter--that distinction went to French luxury cigarette lighter company S.T. Dupont, which had developed its own disposable lighter, called Cricket. Dupont was acquired by Gillette, which launched the lighter in the United States a full year ahead of Bic. Once again, however, savvy advertising played a strong role in the Bic brand's success, as advertising campaigns exhorted consumers to "flick my Bic." By 1978, Bic had established itself as the market leader, and by 1983, Gillette sold off the Cricket brand.

The 1970s held one more product success in store for the company. In 1975, Bic became the first to introduce a one-piece disposable razor. The product helped spark a whole new razor market, bringing Bic into competition with market leaders Schick and Gillette; the latter even responded by launching its own disposable razor in the United States, called the Good News. Although Bic never captured a leading share in the overall razor market, it captured the lead in the disposable segment, and its razor sales nonetheless became an important part of its revenues, with sales of more than 11 million razors daily into the mid-2000s.

The company's U.S. subsidiary, which adopted the simplified name Bic Corporation in the early 1980s, later launched its own public offering, becoming nominally separate from its French parent. Bic Corp. quickly emerged as the group's most dynamic operation. This came in large part because of the buoyancy and intense competitiveness of the U.S. market. Joining the company in the early 1970s was Bich's son Bruno, who began his career as a salesman for the company. By 1982, however, the younger Bich had taken over as the U.S. subsidiary's CEO.

Bic expanded its writing materials operations in 1979 with the acquisition of fellow French company Conte, which specialized in pencils of all varieties. Conte had its origins in the late 18th century, when Nicolas Jacques Conte invented modern pencil lead with a mixture of graphite and clay. Conte received a patent--number 32 in France--and launched production of pencils in 1795.

The 1980s marked Marcel Bich's attempt to steer the company into new product categories. Bich, a yachting enthusiast who led France's entry in the America's Cup, set up Bic Sport in 1981. That subsidiary took up Bich's interests in water sports, launching production of windsurf equipment and sailboards. Although that operation achieved some success, other attempts by Bich to diversify the company did not. Among these was the group's attempt to enter the pantyhose market, with the launch of the "Fannyhose" in the late 1970s. That product failed to inspire consumers.

Instead, the company attempted to buy into the hosiery market, acquiring French market leader Dim in the mid-1980s. Bic continued to expand into the clothing market, acquiring Rosy, a lingerie maker, and the fashion house Guy La Roche. In the late 1980s, the company attempted to do for the perfume market what it had done for pens, launching a line of inexpensive "spritzers" under the Parfum Bic brand in 1989. Sales of the company's perfume were so dismal that the company pulled the product by the end of 1991.

In the meantime, the company found itself embattled by a growing number of lawsuits involving the safety of its disposable lighters. Although the company successfully defended itself against many of the claims, citing user negligence, a number of losses led the company to discontinue certain lighter models and to introduce new child-resistant lighters in the early 1990s.

New Acquisitions in the New Century

Marcel Bich died in 1994, and Bruno Bich took his place as company chairman. Under the younger Bich, Bic regrouped around its core product categories of writing materials, lighters, and razors, selling off its clothing and fashion holdings; that process was completed in 2001 with the sale of the Guy La Roche brand. Bic also moved to take firmer control of its flagship U.S. subsidiary, increasing its stake to nearly 90 percent in 1995, and removing its stock market listing.

Meanwhile, Bic had launched a new strategy designed to expand the Bic name beyond its writing business into a more extensive line of stationery. The company had taken a step in that direction when Bic Corp. acquired the Wite-Out brand of correction products in 1992. This acquisition led the company to launch a Wite-Out branded correction pen in 1996.

The following year, Bic made two more significant acquisitions, buying up Germany's Tipp-Ex, which produced its own line of correction and stationery products, and, in an extension into the luxury writing tools segment, Sheaffer.

Into the 2000s, Bic focused on rolling out new products within its core categories, such as the twin blade Softwin in 1999, the Megalighter in 2001, and the Exact Liner, branded under both the Tipp-Ex and Wite-Out names. In 2002, the company launched a new sporting goods product as well, the Bic Kayak.

In 2004, Bic relaunched part of Conte's range of children-oriented pens and stationery products as the Bic Kids brand. The company expected to convert the full range of Conte's coloring products to the Bic Kids brand through the middle of the decade.

In the meantime, Bic completed two more acquisitions, acquiring France's Stypens, which produced a range of pens under its own brand name, but also produced a wide range of licensed pens for brands including Kenzo, Harley Davidson, Harry Potter, and the like. Also in 2004, Bic signaled its intention to boost its presence in the Asian market with the purchase of its Japanese distributor. Bic by then had become one of the world's most recognized brand names.

Principal Subsidiaries: Ballograf BIC (Austria); BIC (NZ) Ltd.; BIC (South Africa) Pty. Ltd.; BIC Argentina S.A.; BIC Australia Pty. Ltd.; BIC Belgium SPRL; BIC Botswana Pty. Ltd.; BIC Brasil S.A. (Brazil); BIC Chile S.A.; BIC CIS; BIC Colombia S.A.; BIC Corporation (U.S.A.); BIC de Guatemala S.A.; BIC de Venezuela; BIC Ecuador S.A.; BIC GBA Sdn. Bhd. (Malaysia); BIC Graphic Europe S.A.; BIC Holdings Southern Africa Pty. Ltd.; BIC Iberia S.A. (Spain); BIC Inc. (Canada); BIC India Pvt. Ltd.; BIC International Co. (U.S.A.); BIC Italia S.p.A. (Italy); BIC Kosaido KK (Japan); BIC Malawi Pty. Ltd.; BIC Mozambique; BIC Netherlands B.V.; BIC Polska Sp. z.o.o. (Poland); BIC Portugal S.A.; BIC Product (Asia) Pte. Ltd. (Singapore); BIC Product (Korea) Ltd.; BIC Product (Singapore) Pte. Ltd.; BIC Product Thailand Ltd.; BIC Stationery (Shanghai) Co. Ltd. (China); BIC UK Ltd.; BIC Ukraine; BIC Uruguay S.A.; BIC Violex S.A. (Greece); BIC Zambia Ltd.; No Sabe Fallat S.A. de C.V. (Mexico); PT Buana Inti Cakrawala (Indonesia); Société BIC (Suisse) S.A. (Switzerland).

Principal Competitors: Schick Wilkinson Sword; Esselte Sverige AB; Gillette Group Italy S.p.A.; Mitsubishi Pencil Company Ltd.; Herlitz AG; Faber-Castell AG; Staedtler Mars GmbH und Company; Schreib- und Zeichengerate-Fabriken; KOH-I-NOOR HARDTMUTH A.S; China First Pencil Company Ltd.; Productos Pelikan S.A. de C.V.

Chronology

• Key Dates:
• 1945: Marcel Bich buys a factory in Clichy, France, producing fountain pens and mechanical pencils.
• 1950: The company acquires the patent rights for the Biro ballpoint pen and begins developing its own ballpoint pen.
• 1952: The launch of BIC pens is an immediate success.
• 1956: The company begins sales outside of Europe, launching a subsidiary in Brazil.
• 1958: The company acquires the Waterman pen company in the United States, which later becomes BIC Corp.
• 1972: BIC goes public on the Paris Stock Exchange.
• 1973: The BIC disposable lighter is launched.
• 1975: The BIC disposable razor is launched.
• 1979: The company acquires Conte, of France.
• 1981: The company creates BIC Sport and begins production of sailboards.
• 1989: Parfum BIC is launched (but discontinued in 1991).
• 1992: BIC Corp. acquires Wite-Out.
• 1994: Bruno Bich takes over the company.
• 1995: The company acquires full control of U.S. subsidiary BIC Corp.
• 1997: Tipp-Ex and Sheaffer are acquired.
• 2004: Stypen in France and Kosaido in Japan are acquired.