Pinder comes prepared

Pilkington Building Products - UK & Ireland is pleased to announce the appointment of David Pinder to the role of Managing Director.

David, who has been with Pilkington since 1985, takes up the helm in the UK and Ireland after performing a similar role in Scandinavia, where he was Regional Director and also Director responsible for both the on-line and off-line coatings businesses.

Having joined Pilkington from Hull University. David has performed various sales functions in the UK and Europe. Prior to his departure to Scandinavia, David was the Market Planning Director of the then newly created Primary Products Europe, where he had the responsibility for establishing the strategic planning process within the business.

With a sales and marketing background, David has a strong track record of increasing sales based on building relationships and developing long-term partnerships with companies and customers.

Based at the St Helens HQ, David has two daughters, Emily and Rebecca. A keen sportsman, he plays tennis, football and golf and also enjoys travel, food, drink and live music.

DB: Last year I spoke to David Stoker, Sales Director for Pilkington Building Products and he was quite frank about Pilkington having conceded market share in the UK, and picking and choosing the key customers. Is that how you see it?

David Pinder: Absolutely. We were faced with quite a challenge when Guardian built their float plant. I think it was different when Saint Gobain built theirs because to some extent they were substituting for the glass they were already selling here, because they already had the downstream branches and customers here. When Guardian came here with additional tonnage to sell, we took the view that we would do some customer selection. We decided which customers we wanted long term partnerships with. That strategy is not changing.

How do you see the current situation with gas prices as they are?

Our float lines are predominantly gas fired so the hike in cost per therm of gas has been an extraordinary squeeze on our margins this year. The forecast for the year ahead is on average even worse. Although we have some flexibility to fire with oil we find little respite there as the dollar per barrel rate remains stubbornly high.

The problem we have is that this next round of ‘cost push' will take us beyond what the energy surcharge will give us, because it's not just fuel related - it's raw materials, it's transport cost, it's electricity in the downstream processing. Throughout all of our operations we're getting a ‘cost push'. We haven't increased prices yet but there will definitely come a point where will have to.

That's the biggest challenge now. For once it's external factors rather than internal factors that are getting most of our attention. I think we've got our house in order within Pilkington and we're in shape for whatever external factors are thrown at us.

Do you anticipate your customer structure changing?

In terms of our branch network, no change as far as merchants are concerned. It's a very good network, very well managed. One thing we all face is a long overdue consolidation in the industry. It's often the big processing businesses that struggle in a downturn, we know that ourselves. They have high fixed costs to cover but they also make strong returns when times are good. Smaller businesses tend to be more fleet of foot and can flex their costs more easily. In the end though it comes down to whether the business is well managed and in a soft market that is twice as a critical.

What sort of impact do you expect from the marketing campaign for Activ self-cleaning glass?

It was my first job to approve that campaign. I was around when we were promoting Pilkington K Glass before Document L so I've got experience of promoting to people outside our sector, and some personal views on the subject.

By and large, in the home improvement sector, people aren't prepared to spend very much on the glass in their windows. As a rule of thumb around five per cent are prepared to pay a real premium for extra functionality in their windows and the rest are driven by the need to replace.

If you think about the applications for Activ then it's places that are difficult to clean. Being value-added and difficult to clean, conservatories are a good fit for Activ. So I think there's real promise in that segment. In windows it might be a 5% penetration factor but in conservatories I think we're braced for something special.

Are you braced for any cases of passing off for self-cleaning glass?

We're always concerned with passing off, not just on our self-cleaning glasses but our Texture Glass too. There are genuine competitors to Activ and we accept that but what we want to avoid is grossly under-performing products.

We don't want people to be disappointed with their self-cleaning experience, and they won't be if they buy Activ. It's really important for the industry that self-cleaning grows and it would be a disaster if people were made to think that it doesn't work. What we would like to see is a European standard for self-cleaning with its own CE mark.

What about Window Energy Ratings?

We are still convinced about Pilkington K Glass being the product of choice for the industry. Window Energy Ratings are helpful because we have been banging the drum about the useful passive solar gain for years. This is a real opportunity for innovative companies that want to differentiate themselves.

Most of mainland Europe refers to U values. Denmark was probably the first country to adopt Window Energy Ratings and to achieve better ratings the industry changed to thermal spacer bar, almost overnight. So it will be interesting to see what happens here.

Will Pilkington try to win more landmark projects?

Of course that's part of our strategy and we want more landmark buildings. One of the things that will help our presence here is the launch of Activ Planar, which is a new version of our classic structural glazing system with Activ, and sealing compounds that don't mask the hydrophilicity of the glass. So now we can have self-cleaning facades, hopefully by the summer.

Tell us about your time in Pilkington's Nordic business.

Apart from cultural issues I guess the biggest challenge we had in Sweden was that we were next door to the Baltic States and Poland.

While I was there we began to experience this huge wave of processed product coming over from Poland. We were seeing high-quality units delivered at prices that we couldn't get anywhere near because their cost base was so much lower.

I took the decision to build a factory in Eastern Poland and restructured our processing operation in Denmark to provide 25% of our capacity.

We learned a great deal. When you become the low cost supplier you realise everything is turned round, and customers were then pushing us for shorter lead times, sometimes within 24 hours, and a wider and more complex product range. So the Danish factory made express deliveries, the complex IGUs and all the value-added stuff and we charged a bit more for it. We worked with the Polish operation to provide a complete offering.

Now I know how to deal with the threat coming in because I know how to position ourselves against it, and I also know what to look for in overseas partners. But I don't see the same thing happening in the UK as the distances significantly increase the time and the cost to serve the market.

Most sealed unit manufacturers here are worried about being undercut by UK manufacturers.

I can't speak for other manufacturers but Pilkington supplies the market through its branches and chosen independent customers.

I think the problem has been historically that there is a sector of companies that don't know their costs fully and reduce prices too far with inevitable results, often they then re-invent themselves as phoenix companies. Who knows how many more liquidations we'll see before we're through the winter, and frankly, I can't see this year being better than last year.

However, it is still possible to develop good business in a difficult period with the key being a greater emphasis on value. Quality and innovation will be crucial and there will be plenty of opportunities for those prepared to provide that.