Royal Sees New Financial Structure Positioning Company for Growth

December 8, 2009
Companies

Royal Group Inc. anticipates disciplined growth across its building products divisions following the completion of a debt-for-equity exchange by parent Georgia Gulf Corp., executives report. The new capital structure reduces Georgia Gulf’s long-term debt by $736 million, also reducing its annual interest expense by $69.7 million.

“We are immediately positioned to be a stronger competitor and to achieve strategic growth,” says Mark J. Orcutt, Georgia Gulf executive vice president for building products. “We are refocused on what we do best—innovating and providing the highest levels of service to our customers. Royal Group Inc. has been fortunate that even in the market’s downturn, we have introduced new products that are very well-received and that meet the needs of our customers. It’s an exciting time to move forward, expanding into new markets and growing in existing markets.”

Having recently brought in managers highly experienced in building products, Royal management teams are now developing and executing three-year strategic plans for each of its five divisions. “Costs are being closely aligned to volume, new processes are being put into place, our marketing is being strengthened and we are increasing our manufacturing utilization and expertise,” Orcutt explains. “We have the advantage of talented people and good assets–more than 20 plants in North America. Our goal is to grow faster than the market and leverage the strong Royal brand across divisions.”

Georgia Gulf is unique among vinyl building products manufacturers in that its operations include the manufacturing of its raw material, along with product design and extrusion. Georgia Gulf starts with salt and ends with cutting-edge vinyl building products.

As vinyl demand strengthens, Royal’s cross-divisional technologies are giving the company a competitive edge while continuing to build on a history of manufacturing leadership, offiicals note. “Innovative products such as decking, moulding and windows provide dealers, distributors and contractors a trusted single source for durable, low-maintenance products that continue to grow in popularity,” says Orcutt.

“To strengthen its marketing and leverage the Royal Group brand, the company is launching a new Web site to showcase all Royal products. Each division will have its own section with links to detailed information for distributors, contractors and homeowners,” adds Ashley Mendoza, Georgia Gulf manager of corporate communications. “It’s a great opportunity for the contractor to see a wide range of products from one source.”

“Royal Group will stay ahead of its competition by anticipating customer needs and exceeding them with quality products and a business structure in place to support exceptional delivery of those products and service after the sale,” says Orcutt. “Royal was built on selling to dedicated entrepreneurs and companies. We remain strongly committed to our relationships.

“Like any good business, we are developing a pipeline of ideas and projects, with the task of working on the right ones at the right time to create maximum profitability for the company, its investors and customers," he continues. "As we realize continuous improvements and the recession begins to recede, we have the expectation to grow faster than our competitors.”