Product Diversity

Emanating from the companies in RPM’s two segments is a diverse portfolio made up of more than 800 brand-name products. Many hold the primary position, in terms of sales and market share, in the markets they serve. When it comes to their businesses and homes, both industry and consumers rely upon RPM products for maintenance and repair, protection from the elements, improved energy efficiency and beautification.

Exemplifying the maintenance and repair nature of RPM’s many products is Carboline. Its coatings are heavily used to keep infrastructure items in service, such as bridges and highways. An increasingly important market for Carboline is water infrastructure, where expenditures on maintenance and repair are estimated to be $350 billion over the next 20 years.

When it comes to protection, Kop-Coat gets to the core with its environmentally responsible, patented Tru-Core wood treatment system. It completely permeates the wood, unlike conventional pressure treating, providing protection from decay, insects and mold.

With increasing costs for gas and oil, energy efficiency is becoming top of mind and many RPM companies are providing solutions to energy challenges. On the forefront is Tremco Roofing and Building Maintenance. It was selected as a cool roof supplier to the Clinton Climate Initiative, which is dedicated to combating global climate change. Other examples include ValvTect’s fuel additives that improve mileage on diesel-fueled trucks, Kemrock’s wind turbine blades and components, and DAP’s Living Green Building Green web site that offers tips for conserving energy.

Numerous RPM products also help to beautify homes and workplaces. Leading the charge is Rust-Oleum with new products including a water-based brushable paint, a dual-tone hammered metal paint and its EpoxyShield line of driveway coatings with a three-to-five year life. Varathane has introduced Foam Stain. Perfect for inside use, it eliminates mess, is low odor and can be quickly applied to doors, cabinets and trim.

Internal Growth

RPM sustains its continuous growth in two ways – internally and through acquisitions. RPM’s internal growth results from new or improved formulations, innovative delivery systems and packaging, marketing programs, ventures into service offerings and expansion into new markets.

One new product line now hitting the consumer market is DAP 3.0 advanced sealants, which provide superior adhesion and flexibility and addresses five distinct uses including kitchens and baths, gutters and flashing, blacktop and roofs, concrete and mortar, and all purpose. Formulated with Kwik Dry Technology, they are ready for exposure to moisture in just three hours, compared to 24 hours for conventional caulks. Professional and D-I-Y users are quickly embracing this product because it minimizes downtime.

Complementing RPM’s many new products are innovative delivery systems and packaging that improve the end-user experience. Rust-Oleum Universal, a new, all-surface spray paint, is a prime example of innovative delivery systems with its 360-degree spray, ergonomic design and unique drip guard.

RPM’s operating units are also expanding their reach into new markets, such as food and beverage. Mantrose-Haeuser’s NatureSeal product is now used by 200 food processors in 30 countries to extend the life of fresh-cut produce. In addition, Day-Glo’s GloPrill fluorescent colorants have been approved by the FDA for food applications and its thermochromatic colorants, which change color with the temperature, are being used on a leading beer producer’s bottle labels to indicate when the beer is properly chilled.

Acquisition Growth

Acquisitions also fuel RPM’s growth. Over the last 30 years, RPM has completed more than 100 acquisitions; nearly half of them made during the last decade. In its quest for acquisition candidates, RPM seeks three types of businesses: entrepreneurial, synergistic and strategic. Entrepreneurial targets are typically family-run with strong management teams and industry-leading brands. Synergistic acquisitions are of bolt-on product lines that can be assimilated into RPM’s existing operations. Strategic platforms are significant in size and geographic reach. All are expected to be earnings accretive and cash flow positive within one year as well as to bring leading brands and technologies to the family of RPM companies.

Domestic and International Expansion

RPM’s businesses operate from a position of strength in the markets they serve. Its consumer companies are leaders in North America. Rust-Oleum holds the number one position for brand recognition and market share in the U.S. and Canada in small-project paints, including the rustpreventative, decorative, specialty and professional segments. DAP is the leader in brand recognition and market share in North America for home improvement latex caulks and sealants, and patch and repair products. Zinsser is the brand recognition and market share leader in the U.S. for specialty primers and sealers, and wallcovering preparation and removal products.

RPM’s industrial businesses are also brand and market share leaders in both domestic and global markets. Tremco leads North America in high-end institutional roofing and is among the world’s leading suppliers of construction sealants and waterproofing products. Stonhard and Flowcrete combine to be the top supplier of high-performance polymer flooring in the world. Carboline is a global leader in corrosion control and fireproofing coatings. Day-Glo holds the top post in fluorescent colorants.

While RPM continues to grab share and enter new markets domestically, it is also focusing greater attention abroad. As borders disappear in today’s global economy, international expansion is vitally important to RPM. With an estimated $170 billion global market for its products, there are vast opportunities for growth. RPM is seizing these opportunities by rapidly growing its presence in established European economies and emerging markets such as China, India and Latin America. This international expansion is transforming RPM from being an American business with some international presence to becoming a more global company.

RPM’s business structure is well suited for such a transformation. Key is its ability to act globally, but think locally. This comes naturally, because it is how RPM has pursued acquisitions throughout its entire history. Its corporate office, small by design in number of personnel, is dependent upon strong management teams at its operating units that will stay in place and run their businesses as part of RPM. The corporate headquarters then works with them to build their businesses through investments, internal growth and product line acquisitions.

One such initiative is Rust-Oleum’s plan to expand into the European consumer market, starting with a line of consumer products in the United Kingdom. Outside the U.S., the Rust-Oleum brand has generally only served industrial markets. Providing the platform for the launch is its U.K.-based Tor Coatings business, which Rust-Oleum acquired in fiscal 2007. Tor has primarily served industrial markets, but has some experience on the consumer side of the business with its Blackfriars line of products and is getting added tactical and practical counsel from Rust-Oleum.

The Value of 168

The adhesive that holds together RPM’s balanced position for growth is its operating philosophy – The Value of 168. This number, often cited by its founder, Frank C. Sullivan, is literally the number of hours in the week. It was his reminder that time quickly passes and that each hour should be utilized to its fullest extent, because it can never be regained. By embracing this philosophy, more than 10,000 RPM employees around the world have created a growth culture that has sustained the company for six decades and will carry it into the future.