YORKSHIRE varnishings and coatings firm Ronseal is looking to buy companies in former Soviet states as it builds on growth in British and Irish sales.
The Sheffield firm is on the acquisition trail in central European nations such as the Ukraine, the Czech Republic, Slovakia, as well as the Baltic states and in southern Europe.
It has been buoyed by strong recent sales which mean turnover is on course for £75m this year, up from about £68m last year.
Ronseal bought Poland’s Altax in January 2009 and Paul Barrow, managing director of Ronseal, told the Yorkshire Post this will open the way for making more acquisitions or forming partnerships in Europe.
“We have been selling into a number of different markets for a number of years but we needed some critical mass and people in the region.
“An acquisition in Central Europe was a launchpad for us because it is such a booming part of the world and DIY is taking off. All the skills we have put into developing the brand we can do over there. We can build a brand across a region.
“We have been involved in a new market. It is exciting and they are very open people.”
Ronseal wants to tap into the growing middle class in the former Soviet states, which have not been hit by the financial crisis to the same extent as Western Europe.
Mr Barrow said its foreign advertising will continue the use of its famous “does exactly what it says on the tin” slogan, which has been in use in Britain since 1995, and a Polish-language commercial has already been filmed.
The firm sells a range of around 1,500 products in total, ranging from varnishes for wooden floors, specialist paints for tiles, kitchen cupboards and radiators to sprayable colour and protection coating for fences and sheds.
Last year sales reached about £60m in Britain and its Dublin-based Irish operation with a further coming £8m from the Polish business, based in Poznan.
Mr Barrow said they were on course to reach about £65m domestically and £10m in Poland this year.
“What drives DIY in our area is house moves. We are part of decoration projects. With the falling off in house moves we have seen some sort of decline but, because people are staying at home, there has been an upturn because more people are doing some work themselves.”
Mr Barrow said consumers used to be “time-poor and cash-rich” but the recession, Britain’s longest and deepest since 1945, has gone some way to changing that.
Ronseal makes 36 million litres a year with production peaking in March, when it reaches five million litres.
About 70 per cent of its sales are to multiple retailers and 25 per cent to wholesalers and merchants, with the remainder exported.
A period of warmer weather helped it achieve strong sales in the first four months of this year before slowing slightly in May.
It has also benefited from a series of product launches, which included exterior wood paints and wall fillers this year and speciality paints, coatings, radiator paints and tile and metal paints over the previous two years.
The firm has had several owners and was sold by its venture capital owner to American paint manufacturer the Sherwin-Williams Company in 1997.
Sherwin-Williams, based in Cleveland, Ohio, is one of the three largest coatings companies in the world and is listed on the New York Stock Exchange.
Four years ago Ronseal invested in a £10m distribution centre at its base in Chapeltown, north of Sheffield.
Its decking products have grown strongly since their launch 10 years ago and the firm has become the market leader in DIY woodcare, coatings for interiors and exterior woodcare, Mr Barrow said.
“We were the first (industry) brand on TV.
“The Ronseal brand was developing and came with the boom in DIY in the 1970s and the likes of B&Q and Homebase.
“There was a massive boom and we benefited on the back of that. We put household products into the DIY market.”
More women are buying Ronseal products and customers as a whole want to know more about coatings and DIY, Mr Barrow added.
The firm still has aspirations to be a major player in Western Europe but that is most likely to come through acquisitions, he said.
Straight talking doing the trick
Ronseal’s renowned advertising slogan is normally uttered by a plain-speaking DIY enthusiast but today that includes women as well as men as the firm seeks to soften its brand.
“We think it (the slogan) struck a chord,” said managing director Paul Barrow, a former marketing director.
“It is straight talking and to the point. We like to say that is the business – ‘do what you say you are going to do.’”
Mr Barrow said consumers typically take between five and 10 minutes to read the back of the tin before making a purchase.
“At the end of the day we are selling a solution for the coatings market. It is an infrequent purchase.”