Duron Inc. does paint on an impressive scale.
In the next six years, the Beltsville company plans to double its $320 million revenue, expand to new territory west of the Mississippi and become a national force that will reckon with paint powerhouses such as Sherwin-Williams Co., the largest paint maker in the country. This year, Duron's two factories in Beltsville and Atlanta will churn out 17 million gallons of paint, and the company's 18 percent growth rate is outpacing its competitors'.
Despite its rapid growth, the closely held, family-owned company, which was founded 50 years ago by Harry Feinberg, still has the feel of the small operation it once was. Store managers run the show at their stores, store personnel wear casual khakis and brightly colored Duron shirts to work and address most of their customers by name.
Duron customers said the personal touch that the company has sustained during the half-century expansion is key to retaining a loyal customer base.
But rapid growth poses challenges: To find the 150 or so new employees Duron needs to staff the 20 to 30 new stores it opens each year from New Jersey to the southern tip of Florida, the company is tapping competitors' work forces. And knowing every face in the company--as the top bosses used to--becomes impossible.
Duron's success is due to the careful attention it has paid to customers since it was founded 50 years ago: The company serves almost exclusively professional painters and contractors who buy their five-gallon buckets of paint in large quantities for commercial jobs--including high-profile projects such as the White House and the Capitol. Unlike its principal competitor, Sherwin-Williams, which aims to serve painters of all types, Duron focuses on professionals, and only 5 percent of Duron's customers are small-scale retail customers who buy paint in gallon buckets for their homes. That means the company puts more effort into things such as prompt delivery to job sites, said Thomas K. Schwartzbeck, president of Duron.
"I think we do it better than anybody," he said, noting the company's 150 trucks, which run mostly up and down the East Coast and as far west as the Mississippi.
The vast majority of the company's customers are like Pete Conto, owner of Forestville-based Mid-Atlantic Interiors Inc. His 40-employee company paints commercial properties from Pennsylvania to North Carolina and spends $250,000 a year on paint. About 90 percent of that goes to Duron, he said, because of the company's service and accessibility.
"A bucket of paint's a bucket of paint, but their approach to contractors is what makes them number one to me," he said. Paint deliveries are rarely late, but when they are, Duron pays for lost time and wages, he said.
When Harry Feinberg started the company, other paint makers were focusing on the individual retail market, so instead of competing head-to-head, he decided to pour money into fashioning stores that serve professional painters with their particular needs, including a wide variety of specialized equipment such as sprayers, wallpaper-pasting machines, commercial-size products and many types of ladders.
The key to keeping those customers loyal is the company's bottom-up structure: Sales representatives make their own decisions, because they know what their customers want--and that differs from store to store, said Robert Feinberg, the founder's son and the company's chairman and chief executive.
"The rest of us are organized to meet their needs," whether that means a quick shipment of special products from the Beltsville warehouse or dispatching one of 11 certified technical services personnel from Duron's regional offices.
The company began its operations in 1949 in Northeast Washington, but Harry Feinberg moved the plant to Prince George's in 1957, for one main reason: topography. The land he picked in Beltsville was sloped so that paint could be processed as gravity moved the ingredients from the top of the hill to the plant's transport operation, 16 feet below. Now the company uses pumps to move the product through the processing line.
The company secured its place in the local economy by cultivating a sales force that has attracted many loyal customers in the Washington area and beyond. The good customer service is what keeps contractor Ray Armstrong coming back to Duron. Armstrong owns Sparkle Painting Co. Inc. in Lorton and spends $500,000 a year on paint for the parking decks and commercial buildings he paints. Duron delivers Armstrong's paint five days a week, often to his job sites. Many companies offer good paint and service; the difference is Duron is "a large company, but there's still personal feeling. They know you when you go in," Armstrong said.
One time, one of Armstrong's clients in Goldsburg, N.C., wanted to know whether he could get some paint to do a last-minute touch-up at 6 p.m. Armstrong called his Duron sales representative in Washington, who then called a Duron store in Raleigh, whose representative drove a can of paint to the site by 8 p.m., he said. "It's pretty hard to give [competitors] the sale when Duron has a record like that and you know they're going to be there for you," Armstrong said.
Schwartzbeck is typical of many employees who joined the company early in their careers and stuck around, helping develop and maintain the sense of continuity that customers find attractive.
Schwartzbeck started at Duron as a store clerk in Lanham in 1975, when he was in his early twenties. After working nine other jobs at the company, the Gaithersburg native is now the president and occupies one of the large corner offices in Duron's corporate headquarters. Everything in the business has changed, he said: The products are technologically more advanced, the industry is more environmentally conscious, and customers are sensitive to price and educated about paint quality, which means the business is more competitive.
The essential ingredients for paint haven't changed, though the complexity of the raw materials and the way they can be processed and packaged has, said James Capitano, the company's vice president of manufacturing and distribution. Technical advances have made it possible for Duron to recycle most of the water it uses, so it produces only 2,000 gallons of wastewater a day, he said. A machine acquired in the spring fills paint buckets at 125 gallons a minute, he said.
"We will force growth, no matter what," even if there is a downturn in the housing market that chips into sales, Schwartzbeck said. Duron wants to be on equal footing with national competitors, such as Sherwin-Williams, and will do that by continuing to lease new sites, looking for acquisitions or being acquired, he said.
In 1997, the company acquired 12 stores through Fancy Colours and Co. of Chicago, and in January, it bought a store with revenue of $6.5 million from Broward Paint & Wallpaper Co. of Fort Lauderdale, Fla. And the company expects to keep growing, through a combination of increased sales and possible acquisitions.
"It's unrealistic to expect them to [continue to] grow that fast unless they plan to make big acquisitions," said Andrew Cash, a chemicals analyst at investment firm PaineWebber Inc. in New York. In the $13 billion U.S. paint market, Duron is still a bit player, he said.
Despite Duron's ambitious plans, Feinberg--who owns the company with his two sisters, who do not hold titles at Duron and are not involved in the company's operations--says it will never go public.
"It's unsympathetic to the way we operate," he said, because that would mean relinquishing the reins of control to shareholders, instead of the sales representatives in the field who have built the company's success.