Three years ago, executives at The Geon Co. were faced with a difficult decision.
It was obvious that the plastics industry the company had dominated for years under the B.F. Goodrich banner, and later on its own after a 1993 spin-off, was now in a highly competitive commodity market
Geon was still a leader, but the question was whether it wanted to concentrate on this industry rat race or take the company in a different direction, focusing on innovation rather than perpetual cost cutting.
“It’s always easier and less disruptive to keep on doing what you’re doing,” CEO Thomas Waltermire recently told a crowd at a Cleveland Engineering Society Breakfast forum, where he discussed his company’s transformation. “But, we knew if we succeeded, our rewards would justify the risks.”
Ultimately, company executives decided to take that road less traveled and today have impressive results to show for it. Geon’s revenue last year topped $1.4 billion. Add to that the sales generated by the company’s six joint ventures and that figure is boosted to about $2 billion.
“Revenue has doubled in three years,” says Waltermire. “Our goal is to more than double it again in the next few years.”
Those results, however, did not come without some critical decisions and capital investments to reposition the company. Here are some of the steps that Waltermire believes made a difference.
Focus your efforts
To escape from the commodity-based resins business, Geon executives struck a joint venture with Dallas-based Oxy Vinyl LLC, a company that also produces the same basic plastic material. The 1998 move allowed Geon workers to spend more time focusing on the creation of new and specialized plastic compounds.
“The strategy had become low-cost production,” Waltermire says, referring to Geon’s commodity-driven days before the Oxy Vinyl deal. “Innovation was secondary.”
Expand your reach
Geon acquired eight businesses during the past three years that have not only complemented its existing product line, but also expanded its geographic scope and doubled its size.
“We need to keep broadening our product lines and expand geographically,” says Waltermire. “We target companies that fit closely into our network.”
Invest in new technology
Geon executives not only moved their business to the Web, but positioned the company as an industry e-commerce leader. They launched www.getgeon.com, an Amazon.com of sorts for the plastic compounds industry, which allows Geon customers to order products day or night, receive instant confirmation on their requests and check the status of each purchase.
Www.pvcsupply.com is a separate site Geon launched in 1998 to link worldwide buyers to surplus PVC compounds.
Reward your work force
Waltermire understands the importance of taking care of his workers. The steady string of acquisitions the past three years has increased the company’s number of employees by two-thirds, but hasn’t kept Waltermire and his executive team from doling out financial incentives for employees from top to bottom who produce quality work.
“I believe everyone at every level who contributes in Geon’s success should share in the rewards,” he says.
How to reach: The Geon Co., www.geon.com
Jim Vickers ([email protected]) is an associate editor at SBN.
