Profit strategies

C.R. Laurence Co., Los Angeles, was among the exhibitors on the show floor in Atlanta, where attendees invested in new product lines as they looked to diversify their offerings.

To maintain profitability and attract new customers, glass companies are diversifying, be it in the form of products, services or new markets. This trend was evident at GlassBuild America: The Glass, Window & Door Expo, Atlanta, Sept. 30-Oct. 2, as attendees and exhibitors alike invested in new product lines, services and equipment. “Investing at the bottom of the economic cycle so that you have everything ready for growth is key,” said attendee Ira Endres, director of sales and marketing for Bonnell Aluminum, Newnan, Ga.

“We’re seeing people looking for companies to do more and more,” said Tom O’Malley, vice president of sales, Doralco, Alsip, Ill. “They want companies that can offer two to three products … so we’re staying in front of our customers and trying to give them new product offerings, so they can use them for more applications. We’re expanding some of our existing product line [with composite panels, plate panels and column covers] and trying to invest,” he said.

“We believe providing new architectural glazing solutions is one way to compete better for the reduced pool of building projects,” agreed Jerry Razwick, president, Technical Glass Products, Snoqualmie, Wash. “On the product front, we launched the Fireframes ClearFloor System--a fire-rated glazed floor --as well as a new fire-rated aluminum framing system-- Fireframes Aluminum Series-- that debuted at the Art Institute of Chicago’s Modern Wing this summer. We’re also coming out with a hurricane-rated version of the Pilkington Profilit channel glass system.”

It’s not just suppliers that are broadening their product lines. At Bacon and Van Buskirk, Champaign, Ill., officials are networking more closely with architects and expanding the number of products the company represents, said Rod Van Buskirk, president. “We’re in kind of a unique situation as we’re architectural representatives as well as contract glaziers,” he said. “We’re working at greater capacity as a wholesale distributor to distribute windows and doors in our region.” As a result, the company had minimal need for personnel layoffs, he said. “2008 was a banner year for us. We’re hoarding cash right now, holding on for better times.”

Ed Sieber, Glass Doctor Franchisee of the Year and president, Glass Doctor of Charlotte, N.C., experienced similar profitability after adding shower installation and window and sash replacement to his service offering. “We’re here looking at all of the different suppliers and opportunities out there to see if there are any other products that we may want to add to our line,” he said.

“It was shaky at the first of the year and we had to let go of some people because of industry conditions, but on the positive side, we’re going to have a very good year,” Sieber explained. “Gross volume will be down about 20 percent, but our bottom line will be the strongest it has been in the past few years.”

In addition to positioning themselves as one-stop shops with extensive product and service offerings, glass companies are investing in value-added products that offer multifunctional solutions. Standard Bent Glass, Butler, Pa., for example, purchased equipment this year to provide bent tempered glass with high-performance coatings. “The strategy is to have value-added products to have more things to offer the customer base,” explained Jeff Nichols, vice president, sales and marketing. “With the ability to do the high-performance coatings, we’re able to promote that product in the marketplace where previously it might have gotten eliminated from a project.”

Others are branching out even farther, exploring new markets. “It’s key to find new markets that aren’t getting hit right now,” said exhibitor Wayne Sharp, Midwest account manager, SAF Southern Aluminum Finishing Co., Atlanta, which promoted its aluminum extrusions at the show. “One avenue we’re looking at is solar panels, extrusions that are used in certain solar panels. We’re also looking at food service opportunities and decorative glass column covers--anything that doesn’t deal with just commercial.”

PPG Industries, Pittsburgh, also has turned its attention to the solar market. “[We’re] seeking to expand into adjacent markets, like solar power, and develop products that add value not only to our customers, but also to the end user,” said Scott Follett, director of new products and services, Performance Glazings strategic business unit. “In the first half of 2009 alone, we’ve launched five new products into the solar market.” Beyond the product development for the solar industry, PPG introduced two new tinted glass products as well: Solarblue glass and Pacifica glass. “Additionally, we’ve expanded the number of tinted glasses available with high-performing MSVD coatings, both double-silver and triple-silver, on the second surface,” Follett said. “This [provides] our customers and architects with a greater range of color and performance.”

For some, expanding into new markets has meant adding to their service offering. “To stay strong, at Trainor, we have expanded our geographic area. We’ve opened new divisions and expanded out from base locations, looking at out-of-town work,” said Paul Main, vice president, regional manager, Southwest region, Trainor Glass Co., Alsip, Ill. “We’re also looking at different types of work, such as remodeling—things we weren’t typically doing when we were focused on the office market.”

“I really think the glass business is becoming an enclosure business,” O’Malley said. “Guys that will do an interior job in addition to the skin of the building, those are the people that have done well and will make it through. If glaziers aren’t going to take the next step, there won’t be a lot of opportunities for them.”

Marketing
A comprehensive product and service offering is useless without proper marketing, however. And as customers focus on price in this tough economy, it is even more important to communicate the value-added benefits higher-priced products and services provide, attendees agreed.

“In almost all segments, glass companies have had to be more creative in how they market themselves,” Razwick said. “This is true for manufacturers and suppliers, as well as glaziers. Without business rolling up the door as it did before, there’s been more focus on selling value and performance. For many, this has meant having to show customers how their products go beyond being a commodity.”

To get the message across, glass companies are cultivating existing customer relationships, and creating new ones, through more face-to-face interaction.

“You may have to go and chase more, [and] you really have to market and sell,” Main said. “We’ve increased our marketing substantially. We’re also making more cold calls and visiting architects. We’re talking to as many people as possible.”

Don’t cut back your marketing budget, Sieber reinforced. “Marketing is one of the easiest things to cut in the short term, but it really hurts in the long term,” he said. “It’s about continuing to build relationships, focusing on customer service and letting customers know you’re out there.”

Personnel
While many companies have had to lay off employees this year, retention of key personnel is crucial to future success, GlassBuild attendees said.

“Keeping business going is the number one thing to do right now,” Main said. “Along with that is retaining key employees. We’ve spent an awful lot of time finding people and training them, and you don’t want to lose good people. They’re hard to find.”

Having “top-notch” people is critical, Razwick agreed. “We’ve made some key hires to build upon our existing team,” he said. “Chuck Knickerbocker is our new curtain wall manager and has led many notable installations throughout the country in his 25 years in the field. Even before the recession hit, we hired Ron Pitts to lead our Canadian sales. He’s worked in fire-rated glass and has given us an even stronger focus with architects and glaziers in Canada, which is an important market for us,” he reported.

In tough times, a solid staff can mean the difference between a negative and a positive bottom line, Sieber said. “For the first time, we had to let go of [some people] this year, and it was difficult. But [the remaining team] has done a really good job of adapting to handling more responsibility, and everyone has become more productive in terms of capacity. Everybody has really pulled together, and I think that’s why we’re a lot stronger this time this year than we were last.”

While the nonresidential construction market isn’t expected to return to growth until 2011, that hasn’t stopped glass companies from making the necessary investments to ensure they are ready for the economic rebound. “The recession has forced us to look at new ways and methods of doing things,” said Joe Pigliacampo, founder and president, Joseph Machine Co., Dillsburg, Pa. “I know we’re slow; I know we’re hurting; but we can’t sit here and wait for something to happen. We have been looking at new technology to come up with new kinds of machines, even though it’s expensive and there isn’t a return right away. But now, we’re ready for the future. When the industry starts up again, we’re going to be more prepared.”