No matter how you coat it, Sherwin-Williams is one of the largest paint manufacturers in the US and worldwide (along with Akzo-Nobel, PPG Industries, and Henkel). Sherwin-Williams' products include a variety of paints, finishes, coatings, applicators, and varnishes sold under brands such as Dutch Boy, Krylon, Sherwin-Williams, Thompson's WaterSeal, Ronseal, Sayerlack, and Minwax. The company operates more than 4,000 paint stores worldwide. It sells automotive finishing and refinishing products through wholesale branches throughout the Americas, as well as in Asia and Europe. Other outlets (and competitors) include mass merchandisers, home centers, independent dealers, and automotive retailers.
Sherwin-Williams expanded its operating segments from three to four in 2011 because of growth in sales, geographic reach, and product lines. It added a Latin American Coatings Group to its Global Finishes Group, Paint Stores Group, and Consumer Group segments.
The Paints Stores Group, it's largest segment, operates the biggest network of specialty paint stores in North America, serving painting contractors as well as do-it-yourself homeowners. In 2011 the company added 60 new stores and plans to add another 50 or 60 in 2012.
The Consumer Group supplies both branded and private-label products throughout North America and parts of Europe. It consists of a North American supply chain of 32 manufacturing plants and seven distribution centers, and also supports the company's Paint Stores Group with new product development and research, manufacturing, and distribution.
The Global Finishes Group manufactures and sells automotive finishes, industrial coatings, and marine coatings worldwide. Acquisitions are pivotal to the growth of this segment, bringing new technology in key areas.
Once operating within the Global Finishes Group is the newest segment, the Latin America Coatings Group. The segment develops and produces a variety of architectural paint and coatings and related products throughout Latin America. It distributes its products through some 265 company-operated specialty paint stores, as well as through direct and outside sales reps, dealers, and distributors.
In 2011 Sherwin-Williams realized record group sales of $8.77 billion, an increase of about 13% over 2010. Sales increased in all segments except the Consumer Group, whose new sales declined nearly 2% that year because of a decrease in architectural paint business with one of its large retail customers. Higher paint sales volumes, increased prices, and acquisitions all contributed to the hike in sales, offsetting the higher costs in raw materials. However, the company's net income decreased 5% in 2011, to $442 million from $462 million the previous year, because of costs associated with an IRS settlement that year.
Volume demand in the markets Sherwin-Williams serves has declined more than 20% since 2007, and raw material costs have spiked nearly 40%. To adjust to these conditions, the company focuses on streamlining operations and growing market share. As part of its strategy, Sherwin-Williams invests more than $100 million per year in research, development, and commercialization of new product technologies.
Acquisitions are also key to the company's strategy for growth and for addition of technologies. Among its acquisitions in 2011 was UK-based Leighs Paints, a leader in fire-protectant (intumescent) coatings. Because the intumescent technology prolongs the structural integrity of steel and concrete in a catastrophic fire, more people are able to evacuate. The company also is involved in developing more environmentally sustainable chemicals and processes. In 2012 it added another zero-VOC (Volatile Organic Compound) architectural paint line to its products.
In a major geographic expansion, in 2012 the company agreed to acquire Grupo Comex, a leader in the paint and coatings market in Mexico, for $2.34 billion. – less
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