Philippe Guerret (EDHEC Master 1996), 2020 EDHEC of the Year : co-founder & CEO of M2i Life Sciences

Published on 07/10/2020
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If one were to sum up in a few words the unusual career of Philippe Guerret up to the creation of M2i Life Sciences in 2012, it would be a story of experimentation and a rapid rise to positions of responsibility: creation of PepsiCo in France, management of audiovisual rights with UGC as it was being bought out by Canal+ (with, in his own words, “absolutely astounding tax dossiers for a young graduate”), Vinci’s IPO and the launch of its airport contracts, all before he had even turned 30. Already in the deep end, Philippe Guerret was oscillating between Miami and Switzerland, excelling when it came to repositioning firms in difficulty and specialising in duty-free. Always one step ahead, he had an eye on the future and his next potential business sector, until he was thunderstruck by the world of industry.

Upon receiving the EDHEC Person of the Year award at the very first 100% online EDHEC Rendez-Vous, he recounted the rest of his fascinating story and spoke about his professional ecosystem, as well as his instant attraction to industry, in an exclusive interview with EDHEC Alumni.

 

Tell us how you started out in industry.

Working in duty-free, I gained insights into the sale of mass consumer items through multinationals like L’Oréal, Pernod-Ricard and the big jewellery manufacturers. Two of my acquaintances then suggested taking on a project in chemistry (manufacturing active pharmaceutical principles). It was my first proper industrial experience! It’s easy to fall in love with industry because it’s tangible and palpable, with real people. But working in the chemical industry in France in 2004 was far from straightforward. We bought a factory near Valenciennes and from the ground up created what is now known as Minakem, which I ran until late 2010. When I left Minakem, the firm was generating revenue of more than 110 million, with 600 staff worldwide (United States and several sites in Europe).

What made you want to set up your own company?

I was quite frustrated because industrial production was undervalued in terms of the finished product. It was quite a binary client–supplier relationship: “I’ve found someone cheaper than you abroad, so I’ll go there”. A strong country should have strong industry. Industrial professions need to be valued. In business school, we were told that there was no future outside of websites, applications or tech generally. Industry was not the future. It must be said things have changed since the public health crisis. But there are people for whom this is a profound conviction. When you do the work I do, you need a certain amount of luck. We just came up with an idea which, in hindsight, has become self-evident across society!

Have the values conveyed by EDHEC helped you in your career?

One thing we learned in particular is the value of teamwork. There is always strength in numbers. That’s something we discovered in structural terms. I jointly managed the sports office and the rugby team captained by Johann Fournil (now Director of communication and partnerships at M2i Life Sciences). It’s something we experienced first-hand in the School and rediscovered again later. It is only by working on the ensemble that the soloist can succeed.

Has your career been marked by a constant willingness to put yourself in danger?

No, not a willingness to put myself in danger, but the constant daring of an entrepreneur. It’s about the capacity to identify pitfalls while at the same time wanting to forge on, repair the puncture if necessary, and to continue on your journey. It’s the difference between being audacious and mindlessly ploughing on, the difference between measuring the danger and making calculated risks on the one hand, and not measuring them on the other. In any case, my priority has always been to maintain a stable work–family balance.

What advice would you have for young entrepreneurs starting out?

Don’t be afraid of failure, don’t be afraid full stop. Younger generations (especially in France) aren’t told often enough that they can learn from their failures. To fail is a right, it’s about recognising that all experiences are worth something. Anyone who has experienced failure is much stronger for it. The challenge is to build from that experience and ask yourself what you’ll do next. We all have our own ecosystem, our own balance to strike. The right responses are decisions we make ourselves. Life is just a succession of encounters and opportunities. It involves two things: being willing to take risks and seizing opportunities. Finally, there is one key to success: learning to celebrate. We have to seize every opportunity that arises to highlight collective success.

Did you choose to be an entrepreneur?

Honestly, it was really never a life goal of mine to become an entrepreneur, it didn’t necessarily interest me. For me, an entrepreneur was like an inventor. Becoming an entrepreneur was just one of the twists and turns of life. At some point, in a given situation, you become one, you either take an opportunity or you don’t. If you take it you become something else.

How did M2i Life Sciences come about?

I always had the idea of going back to industry, but doing it differently, putting manufacturing at the heart of a company. One day, a former associate from Minakem told me about a laboratory in Lacq (Pyrénées-Atlantiques) which he had invested in a few years earlier and was now in serious financial difficulty. We went there and realised they had significant expertise in terms of biocontrol products (biological protection for plants and crops), particularly in the synthesis of pheromones. And the idea took off from there. We took over the lab through the courts as part of a group of friends and family, then we bought a factory from Solvay in Salin-de-Giraud, in the middle of Camargue National Park. Later, we bought an old bottling cellar near Cahors that was due to close and we transformed it. We reinvented a business model using old assets. We told ourselves that was the direction history was moving in.

In early 2013 nobody believed in the project. For 3 or 4 years all I heard was that the firm would collapse, but we had trust in our model. We put science, communication and marketing into our products: I immediately understood that it was a matter of communicating in order to make agriculture receptive to a new way of doing things, against all odds. This is a project that was fully financed with private capital (mine and that of my associates). And some of my team had already worked with me at Minakem. When we started out there were just two of us, me and my associate Bruno Gény. And now, 7 years later, a little over 170 people work for the company. If you had told me back then that we would be where we are today, I’m not sure I would have believed you. The company’s organic growth, now generating tens of millions in revenue, that’s all down to our drive and our confidence, which is why we look for support from our loved ones because we don’t have any time to lose.

You refer to communication as an essential tool, but in what sense?

Communication is just a means to educate, to spread the word. To educate people in the positive sense of the word so they have a better understanding of the options available to them. You need to explain the products, detail what is at stake, set confidence in the products, clarify. This is how transition can take place.

It’s important to be proud of your successes. We tackled this project from the outset as a form of support for the company throughout its changes. It’s a fascinating project for the whole team who have been with me for a very long time, and everyone is keen to pursue this adventure. But we also all have certain imperatives, and you can’t take on projects like ours without having an eye on profitability.

What’s the business model for M2i Life Sciences?

It’s a model with 2 pillars: the production of molecules and biocontrol. Producing molecules was the traditional business of the factory I took over: active pharmaceutical principles specialized in niche markets, not in terms of “minor medication”, but rather local treatments like Synthol. We will be working on strategic products post-COVID, including a product for resuscitation, which requires us to handle controlled substances. This industrial pillar serves as the foundation of the company’s global business.

The second pillar is the sale of biocontrol products: organic pheromone-based insecticides. We sell these products on 3 markets: amateur gardeners (products sold at Jardiland and Gamm Vert in France or abroad, as well as in large supermarkets, either using our own brand name or retailers’ brands), local authorities (parks and gardens) and farming (the most strategic market).

Patents are also part of your business model, right?

Yes, because companies need a certain amount of grey matter internally to avoid dependence on their retailers, and instead offer them unique solutions that stand out from competitors and offer high value-added. We were able to quickly establish ourselves on the market because there is a lot of science behind what we do: we hold 22 patent families worldwide for different methods of application and treatments.

What does biocontrol involve?

Biocontrol covers methods for the protection of plants using natural mechanisms. It constitutes a credible and sustainable alternative to the use of conventional insecticides. Chemical mediators or semiochemicals (commonly known as pheromones) and their use to protect against crop-destroying pests fall under the term biocontrol.

A pheromone is a substance that is naturally secreted in tiny quantities by a particular species. When picked up by another individual of that species, it triggers a specific behaviour or reaction. It’s an olfactory signal that acts as a messenger between individuals from the same species. These harmless substances are reproduced in laboratories in a process called biomimetism. So it is possible to combat pests by attracting, disrupting or repelling them.

There are 2 ways to use pheromones as an organic insecticide:

- trapping: you attract the insect into a trap using a sexual pheromone or food odour. The target insect is not inoculated with any toxic substance; it is simply lured in so you can capture it, which means there is no resistance being developed.
- confusion: you saturate the zone you want to protect with the insect’s sexual pheromones to prevent the males from finding females. That way, they don’t meet, don’t reproduce and don’t destroy the crops. This technique is used more in agriculture because it’s applied to large surface areas. It’s an approach that allows farmers either to do away with insecticides or to use less than they used to.

Who “educates” farmers about all these techniques?

That’s our job. This is all very new, mentalities started to change in late 2018. People need to work together, and farmers are very open to change, contrary to what people think, because their health is affected too. There are people who just want product that work. And the science has evolved in the last 100 years!

People sometimes forget that the “environmental transition” is just that – a transition. Today, it would be wrong to say that science allows us to do without pesticides. But it does allow us to limit their use to extreme cases. The problem is not the danger posed by the product in itself, but the quantities we use and levels of concentration, and that’s where education comes in. The mindset used to be about profitability and productivity. The world has been changing: the world of tomorrow isn’t black or white, there are nuances, and people have to be informed about those nuances. The future of the eco-friendly farming transition will involve agriculture that combines solutions that are respectful of the environment with moderate use of conventional products when there is no alternative.

You spoke of the difficulty of launching a business in industry. What about environmental issues?

Punitive ecology does not work, people aren’t interested in it. And in the same way, we can’t feed the planet with organic produce alone. It’s not about pitting the baddies of the agrochemical industry against the goodies who produce organic food. I would like to see pragmatism more widely shared in France. At M2i, we quickly established links with both the WWF and FNSEA for that very reason – they are pragmatic. Our vision of the challenges we face involves bringing both organizations to the table to combine our positive goals and put in place more virtuous farming methods. The best proof of this capacity to pool talents is the FNSEA’s implementation of contract-based solutions.

What do you believe in, what are your values?

Optimism is a cardinal value, non-negotiable. You have to have a business project that people can really rally behind, because we are not talking about subsidies but the real economy. I’m not a very big fan of public financing systems, whose big experts explained to me that chemistry had no future in France and that the way forward was logistics with products manufactured in China. Factories create jobs both directly and indirectly. People no longer want to survive, they just want to live! And for that they need a job that offers them social recognition. You can make all the websites on earth (and I have nothing against that model), but it generates fewer jobs than factories. It is shocking that France, which boasts real expertise, has not really had any industrial policy like Germany. In this country we are close to the very best in terms of academia and fundamental research worldwide! If you want to set up a business in France, it’s not very hard to get some support initially, but to go on to achieve real growth there is nothing on offer.

But despite these difficulties, you were intent on staying in France.

France is a beautiful country and in my opinion you need to give something back to your country. At M2i we are doing what we set out to do: we had factories in good condition, we know about farming in this country, we have very high levels of academic ability, so why go elsewhere? Although if I had done all this in the United States, it would have been a thousand times simpler. The people entering the job market must want to shake things up. We can’t continue with a model that’s stuck in the mud, and it’s not for a lack of political will. Beyond any political judgement, the current government has developed something that didn’t previously exist: economic diplomacy. I can tell you, as someone who travels a lot and lived abroad for a long time, that being French at the moment is nothing to be unhappy about.

Have you spotted societal trends in recent years?

There was one societal change that could be observed some years back: priority access to medication. Now it’s access to better-quality food. It might seem simplistic but it’s a reality: people have realised that they suffer less from illness if they eat better. When animals are in better health, we give them fewer antibiotics, etc. We are once again creating a virtuous circle, and all of the business leaders I meet share that mindset. They have all understood that this evolution will take place naturally and gradually. In today’s new social movement, economic performance tends to remain a means that serves industry rather than become a goal in itself (ultra-short term, profitability and profits at all cost). That’s how we’re bringing regions back into the fold and creating a national factory in Salin-de-Giraud, it’s how we’ve managed to create 80 jobs with the knock-on effect of jobs indirectly created to support that factory, with a village that is coming back to life.

In the media we don’t hear anything about these initiatives, only about factories closing …

Of course, because once again we don’t know how to celebrate! I think it’s important to not only talk about problems, we also need to learn to celebrate successes, the adventures taken on by entrepreneurs. I often emphasise this when talking to staff, it helps people to bond. Obviously it might sell newspapers to say that Bridgestone is closing its plant in Béthune! Politicians can cry foul all they want, it’s too late… I’d like them to find a solution, and maybe they will, but action was needed earlier, a coherent industrial policy needed to be put in place. If you take the example of medication, there have never been as many shortages in pharmacies as there are now, and that predates COVID. When you demand ever-lower prices, at some point it’s no longer economically viable. As a result, French companies stop making the drugs. All COVID has done is open our eyes and make us realise that we depended on India and China.

Which brings us back to the importance of “Made in France”…

I’m convinced that if we displayed the words “Made in France” on medication packaging, French people would buy those products sooner than those bearing the words “Made in India”, even if it cost them €1 more! It might not seem like much, but consumers would get a sense that they were doing something useful. But we are not even able to achieve that much. We should be proud to consume products made at home! That’s behind the success of Hermès, who manufacture high-quality products in France. The success of Le Slip Français is also linked to that need to be useful: “I’ll make an effort and purchase it because it allows somebody somewhere in France to have a job”. People need to regain a sense of ownership. At M2i, we sell products in around 60 different countries and we’re proud to have French labels on them. France is recognised around the world as a guarantee of quality, and we need to capitalise on that.

What does that mean for the way your company is structured?

You can’t manage a company with an Excel file. Business is about achieving a balance between the people we have successfully put in place. And nothing is more fragile. Only benevolence and optimism allow you to move forward. So while it is true that you can probably move faster or earn more money, you can’t do so to the detriment of your people, as that would be destructive. Sooner or later, you end up losing out. In all of M2i’s projects, profitability is indeed a necessity, if only to pay our salaries. We are living in an ultra-financialised world in which ultra-short-termism is akin to a dogma. But the biggest French companies built themselves up over extensive periods! It’s important to accept that principle. And in a financial economy it’s very complex. Finance couldn’t exist without employees or industries. Finance must serve the rest, certainly not the other way round.

If each country realises that its national industry is important, how will we approach the international dimension?

Equilibria will be established, people will be happy to have effective and highly recommended products. All-Asian or all-African manufacturing will be a thing of the past. Nowadays if you explain to somebody that they can reduce their consumption of phytosanitary products in the long term, if you explain that it’s to improve the quality of their water, their environment, their food, their health and that of others, they’ll sign up. Industrial change and internationalisation must be underpinned by common sense. The more volumes increase, the more it makes sense to install a packaging plant in the country of the growth market. That’s precisely the rationale we have adopted in the industrial development of M2i. Changing mindsets are such that people are willing to pay more for quality. I don’t believe in the low-cost model or the Uberisation of society. And nobody wants that! We don’t want people to drive us from A to B if they don’t have any rights and are not paid enough. That’s how the kinds of social uprising movements we have seen emerge.

Should all educational programmes be adapted to the world we’re living in, to show students the tangible side of what they’re learning?

Of course, that’s what we need to explain to our children and younger generations. The current model is one in which making money for the sake of making money is no longer of any interest to the upcoming generations, while making money on tangible projects carries meaning. I’m very pleased to see EDHEC highlighting different profiles and showing that there are many different ways to be useful.

EDHEC’s 2020–2025 strategic plan “Impact Future Generations” includes a section entitled “Tech, AI and humanity”: how do you see this evolving in your sector?

An industry without innovation is not an industry. Innovation is at the heart of industry, and industry is at the heart of innovation. You have to look around you, be curious about what’s going on, what already exists and what other possibilities there are. You can’t just settle for concepts.

Have you got an idea of what will revolutionise industry?

The revolution in our industry has already taken place, and you might say we embody it at M2i. The relocation model, where everything is done in France, is already a revolution in itself! We took that risk in 2012, spent 7 years making it sustainable and it is now bearing fruit – even against the backdrop of COVID – so it is a gamble that is about to pay off. This is probably the model of tomorrow’s world. We can’t continue breaking up value chains, making a tin of peas that travels 4 times around the world before arriving in a store. The future is the integration model. It is not a declinist concept or a step backwards. The innovation here is transforming a traditional and truly historic industry of complex organic chemistry into a relocated high-tech factory. It’s about modifying the value chain by returning to industrial models in which both manufacturing and design are integrated, where distribution circuits are short and interdependencies between different stakeholders are reduced yet at the same time behaviours are internationalised. The advantage of our model is also that France has some of the most demanding criteria in the world when it comes to the chemical industry and managing agriculture.

Actually, we produce in France but we’re not Franco-centric because we integrate and reduce our interactions with stakeholders underpinned by a vision of global expectations. Society’s preoccupations regarding residue-free farming and an agro-environmental transition that is respectful of the climate and biodiversity are to be found all around the world. Our market – biocontrol pheromones – is currently worth 3 billion and is enjoying huge growth on all of the world’s continents. Central and Latin America are among the zones experiencing the fastest growth.

What are the human and institutional resources that M2i uses for its research activities?

Our researchers are mostly French or graduates of French universities, but we also collaborate with several international faculties: Columbia and Cornell in the US, Gembloux in Belgium, and we’ve had exchanges with Greiz in Germany as well as institutes in Tunisia, Morocco and Greece. We work with the Centre for agricultural research and international cooperation for development (CIRAD), which is the equivalent of Inrae for areas like the French overseas territories, Cambodia, Malaysia, Cameroon, Senegal, etc. We have a favourable ecosystem in France when it comes to research and industry. It is worth making the most of that while at the same time drawing on external resources to adapt to the local conditions and challenges in each country.

What is your relationship with EDHEC Alumni?

When I was a student, EDHEC wasn’t the same school it is today. It was more of an ecosystem of students than a school as such. The emergence of EDHEC Alumni has been essential: what better way to find meaning than to affiliate yourself with the things you experienced in your education and training? I attended the Campus Day for our 20-year class reunion in 2016. There were over 100 of us, people were really keen to meet up! Holding class reunions is one of the best ideas I’ve come across since leaving EDHEC. That’s what makes a network strong, whether you’re in an auditing firm, a multinational or an SME. It’s like everything else in life: as you get older, you look back and take an interest in what you did when you were younger.

I recently discovered the entrepreneur pitching sessions. They are a real driver of value, like the mentoring scheme. In my opinion, it doesn’t matter whether you have a specialisation or not: every experience is a good experience and must be transmitted to future generations.

 

Career change? Moving house?