Italian coatings firm targets U.S.
By Gary Evans -- Furniture Today, July 26, 2004
Bologna, Italy — With the wood furniture business stagnant in parts of Western Europe, Italian coatings producer Sayerlack is looking to expand into the United States, Eastern Europe and Asia.
The brand for Arch Coatings, a unit of the billion-dollar Norwalk, Conn.-based Arch Chemicals, Sayerlack saw overall sales grow 5% in the past year, even thought its Western European business declined by 10% to 15% in the face of recession and the movement of production to nations with cheaper labor.
Sayerlack, which recently celebrated its 50th anniversary, develops coatings for a number of industries, with 50% going to furniture, 10% to pictures frames, 25% to millwork and the rest to other industries.
Despite what one executive described as "a tough market," Sayerlack is looking for avenues to boost its output from 42,000 tons of coatings to 65,000 in the next four years, and to move beyond annual sales estimated at $150 million.
To do that, the company hopes to take advantage of global opportunities in places like Turkey, Poland, South America, the United States, China and other emerging markets. Over half of Sayerlack's business is now done outside Italy.
Although facing formidable competition in America, Phillip J. Crouchman, who moved to Georgia two years ago to develop U.S. sales, said the company could reach $20 million to $30 million in sales in the next five years.
Sayerlack could do that through internal growth and, since it is a cash-rich company, by acquisition, where it has plenty of experience, having acquired eight companies since 1999.
In fact, the company was on the verge of buying a California coatings company before the deal fell through. But future acquisitions are likely.
Sayerlack officials outlined their strategy to more than 100 international visitors it brought here for its anniversary celebration.
The main weapon in Sayerlack's arsenal is its water-based coatings, which Europeans regard as a satisfactory replacement for traditional solvent-based coatings. The first company to produce water-based products in Italy, Sayerlack has 25 years experience in the technology and expects to be a prime contender for business in a world becoming more environmentally conscious.
Crouchman said Sayerlack coatings cut emissions by 95% and reduce overspray by up to 25%.
The company says it's No. 1 in market share in Italy, France, Portugal, Romania and the Middle East and second or third in the United Kingdom.
Sayerlack intends to follow production wherever it goes. Sales are growing fast in Eastern Europe and in China, where Sayerlack has two facilities. It also has a plant in Singapore. America, with its offshore connections, is high on the list.
The anniversary celebration at its plant here gave the company a chance to showcase new products and services. That includes a new generation of water-based coatings, coatings with low TDI content and the company's new Wood Color Plus tintometric system.
In addition, it showed off a line of flame-resistant water-based coatings. A spokesman said flame-resistant finishes are now required in Italy's public places, including hotels, in new construction or when spaces are renovated.
The company also showed its Linea Blu line of household paints sold at retail. A Sayerlack executive said the line probably would be sold in one of America's home improvement stores, under the Linea Blu brand or as a private label.
Sayerlack is well aware of the decline of wood furniture production in the United States and has developed a strategy around it. "What we want to do is capitalize on the Chinese business (of U.S. manufacturers)," said Crouchman.
The company only recently entered the U.S. marketplace, establishing a facility two years ago in Bradenburg, Ky. The facility is equipped with machinery, applications and testing equipment for wood finishings, and is staffed by technicians to help customers develop custom coatings, adapt standard coatings and suggest equipment for the desired coating performance.
Shortly after that facility opened, Crouchman established the Georgia sales office. Sayerlack also has an office in High Point and warehouse facilities throughout the United States.
Some of the challenges the company said it must meet to ensure growth is to recruit knowledgeable people, continue to improve processes, including quality control and distribution, and to use computer-based technology for order processing, customer requests and other activities.
