Belron International Ltd.

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Belron International Ltd.

The King's Observatory
Old Deer Park
Richmond TW9 2AZ
United Kingdom
Telephone: 44 208 332 0099
Fax: +44 020 8948 7323
Web site: http://www.belron.com

Majority Owned Subsidiary of D'Ieteren N.V.
Incorporated: 1947 as Plate Glass & Shatterprufe Industries
Employees: 10,000
Sales: EUR 1.12 billion ($1.5 billion) (2004)
NAIC: 811122 Automotive Glass Replacement Shops

Belron International Ltd. is the world's leading provider of vehicle glass repair and replacement (VGRR) services. The company operates a network of more than 1,300 glass replacement service centers, backed up by a mobile repair fleet of nearly 4,000 vehicles. Belron is a holding company overseeing several brand names, including the company's flagship brand Carglass, present in some 20 countries, primarily in Europe. Other brands include Autoglass (United Kingdom, Ireland, and Poland); O'Brien (Australia); Hurtigruta (Norway); Smith & Smith (New Zealand); and, since 2005, the Elite Auto Glass, Auto Glass Specialists, and GlasPro brands in the United States. Altogether, Belron operates in 27 countries; the company directly oversees its operations in 19 countries and has put into place franchise networks in nine countries. Belron also supports its VGRR operations with its own research and development arm, which has been developing a new windshield removal system in the 2000s. Belron is a subsidiary of Belgian automotive distribution giant D'Ieteren N.V., which is also a major shareholder in Avis Europe. D'Ieteren holds nearly 75 percent of Belron, which is registered in Luxembourg and headquartered in the United Kingdom. In 2004, Belron's revenues reached EUR 1.12 billion ($1.5 billion).

South African Plate Glass Specialist in the Early 20th Century

The origins of Belron lay in the South African glass and furniture industries at the turn of the 20th century. The earliest part of the group was founded in 1896 by Ernest Beardmore, who emigrated to South Africa from England and set up the Plate Glass Bevelling & Silvering Company in Cape Town. Beardmore's company specialized in decorative glass work and in producing mirrored glass. Into the new century, however, Beardmore faced growing competition, particularly from City Glass. That company had been established by Adolph Brodie, a Lithuanian native who had emigrated to England in the 1880s, before coming to South Africa in 1903. Brodie launched City Glass in 1909.

City Glass grew quickly, and overtook Beardmore's Plate Glass company. From rivals, Brodie and Beardmore quickly became friends, and toward the end of World War I decided to merge their companies in 1917. Brodie then bought out Beardmore, and brought his three sons into the business. Following the merger, the Brodies changed the name of their own company to Plate Glass Bevelling & Silvering Company. The company then began to expand into other South African markets, establishing branches in several towns.

Each of the Brodie brothers was assigned a branch, with Emmanuel Brodie operating the Cape Town branch, and Harry Brodie placed in charge of a branch in Port Elizabeth. A third Brodie brother, Jackie, was sent to Johannesburg to open a company branch there. However, as Ronnie Lubner, future Belron chairman, told Business Times: "Jackie's heart was never in it and the brothers came to Johannesburg to find a replacement."

Instead, the company took on Morris Lubner as a part-time agent. Lubner quickly proved himself an industrious salesman, and by 1922 had been taken on as a partner in the Johannesburg branch. Lubner expanded the operation, moving it to new premises. Lubner also was responsible for the company's first diversification, adding plywood and lumber sales in the 1920s.

A more significant diversification for the later Belron company came in the late 1920s. The Ford and General Motors companies had come to South Africa and had set up their first factories in Port Elizabeth. Emmanuel Brodie recognized an opportunity to expand the company's glass business, and convinced both U.S. automakers to purchase their windshields from Plate Glass Bevelling & Silvering. In 1927, the company set up a division specialized in the production and sale of windshields and other automotive windows.

The company began producing its first safety glass in 1931, a move driven by Harry Brodie, who went to England to acquire the manufacturing rights to the new windshield type, called Shatterproof. As Ronnie Lubner recalled in Business Times: "It was an early example of built-in obsolescence, because the original design was a film of celluloid between two thin plates of glass which soon yellowed." The Brodies built their own factory in Port Elizabeth and began producing safety glass for the South African automotive industry, under the Afrikanerized name Shatterprufe.

Adolph Brodie died in 1934, and the company was taken over in a three-way partnership among Emmanuel and Harry Brodie and Morris Lubner. In 1940, the company decided to step up its plywood and lumber business, and bought up rival Plywoods of Parow, which became known as PG Bison. In 1947, the Brodies and Lubner took their company public, listing it on the Johannesburg Stock Exchange as Plate Glass & Shatterprufe Industries (PGSI). The company adapted to the change in safety glass technology, developing its own molding process for the new heat-toughened armorplate standard (which replaced laminated glass) in partnership with Triplex Safety Glass in England. The new glass type marked an important step into the windshield's emergence as an important structural element in modern automobile design. In 1953, the company acquired the rights to a new process for producing curved windshields.

Morris Lubner became chairman of the company after Emmanuel Brodie's death in 1961. Lubner had by then brought his own sons, Ronald and Bernard, into the business. Ronald Lubner became especially involved in PGSI's automotive glass arm. In 1958, the company developed its own laminated glass for rear windshields. In the early 1960s, the company spotted a new expansion opportunity: the vehicle glass repair and replacement, known as VGRR in the trade, the basis of the later Belron company.

In 1962, Ronald Lubner convinced his father to buy up a fast-growing glass company, Express Glass. That company posed an increasing threat to PGSI's own operation, especially in that it had established a nationally operating chain of 67 vehicle glass replacement shops. Disputes among the family owners, however, had slowed Express Glass's growth into the early 1960s. PGSI took advantage of the disagreement over the company's management direction to step in with a buyout offer in 1962.

International Focus in the 1980s

Through the 1960s, PGSI solidified its position as South Africa's leading VGRR company. By the beginning of the 1970s, the company then turned its interest toward the international market. PGSI took a first step in 1971, when it bought up the Australia VGGR group, O'Brien. Over the next decades, that brand emerged as the leader in Australia's vehicle glass market. Another early international market for the company was the United States. Rather than establishing a direct presence in the United States, however, the company entry came as an export supplier of windshields and vehicle glass for the Japanese auto industry, as it began its push into the U.S. market in the 1970s.

PGSI restructured its operations at the beginning of the 1980s, separating its plywood/wood and vehicle glass operations into two core divisions. The company then renamed its vehicle glass interests outside of South Africa as Solaglass in 1982. The following year, however, PGSI's international vehicle glass business took a big step forward when the company acquired two VGGR specialists in the United Kingdom, Windshields and Autoglass. The company kept the Autoglass brand name, developing it into the leader in the United Kingdom and in Ireland.

An important milestone for the company came in 1983, when PGSI agreed to merge its vehicle glass manufacturing operations with that of its primary glass supplier, Pilkington Glass, forming Glass South Africa. PGSI's next major growth move came in 1988, when it acquired Carglass. That business provided the company with a springboard for expansion into the Benelux market, as well as in France and Germany. In addition to its own network of VGRR service shops, Carglass had launched a mobile repair and replacement service, building up a fleet of vehicles. Carglass became the most international of the later Belron group's brands, serving as its primary brand on the European continent.

PGSI acquired full control of Glass South Africa in 1992. In that same year, South African Breweries (SAB) acquired a majority stake in PGSI itself. The Lubner family retained some 22 percent of the company as well as directional control, while the financial backing of SAB enabled PGSI to step up its expansion efforts. In 1994, the company regrouped its international VGRR businesses under a new holding company, Belron International.

The company's expansion hopes focused on the United States in the 1990s. In 1990, the company made its first effort to penetrate that market directly, founding a new subsidiary, Windshields, starting with 25 service shops. In the mid-1990s, however, the newly named Belron sought a different approach to achieving scale in the United States. In 1996, the company agreed to merge its Windshields operation into the VGRR business owned by Vistar Inc., in exchange for a 51 percent share of Vistar. The merged entity now boasted a network of more than 250 VGRR shops, and a 12 percent market share.

Company Perspectives:

Our vision is to be the world's No. 1 choice for vehicle glass.

Belron appeared to have hit the big time in the United States by the end of the decade. In 1998, the company convinced rival U.S. autoglass group Safelite to merge the two companies' operations. Belron's stake in the newly enlarged Safelite stood at nearly 45 percent, while Safelite, with a 25 percent share of the U.S. VGRR market and sales of nearly $1 billion, emerged as the clear market leader.

In the meantime, Belron had been expanding its business elsewhere, too, buying operations in Spain and New Zealand at a total cost of $71 million. The company also entered Canada, buying up two of that country's leading VGRR specialists for $98 million.

SAB's decision to refocus its operations around a core of beverage production and hotel and leisure operations placed Belron on the market in the late 1990s. Belgium's D'Ieteren, the country's leading automobile distributor and a major shareholder in Avis Europe, bought PGSI in 1999, and then shed the group's non-auto glass operations, keeping only the Belron International business.

World Leader in the 21st Century

Soon after the D'Ieteren purchase, Belron sold off its stake in Safelite, which had begun to experience financial problems at the dawn of the 21st century. Instead, Belron turned its focus toward expanding its European presence, particularly under its Carglass flagship. As part of that effort, the company launched a series of acquisitions, such as the purchase of GTC Glaslinien A/S in Denmark in 2001. The following year, the company acquired Darma SpA in Italy, as well as a VGRR specialist in Sweden. Then, in 2003, the company acquired Norway's Hurtigruta.

Another significant part of the group's expansion was the launch of a new Carglass franchise operation for selected markets. Greece became the first country targeted for Carglass franchises in 2001, followed by the Czech Republic, Israel, and Slovenia in 2002. By 2003, the company had added franchises in Poland (under the Autoglass name) and Serbia-Montenegro.

Belron's ambitions continued to grow toward the mid-2000s. The company added a new acquisition in Italy, buying up that country's second largest VGRR group. Belron also added to its Norwegian business that year. In 2005, the company entered the Hungarian market, forming a franchise agreement with that country's Pneutrade Service, a specialist in tire replacement.

The year 2005 marked Belron's return to the United States, and the expansion of its North American operations in general. In March 2005, Belron reached an agreement to acquire two Colorado-based companies, Elite Auto Glass Inc. and Glaspro Inc., giving the company a combined 31 branches operating in the western regions of the United States. The company next turned to Canada, buying TCG International, based in British Columbia in September 2005. In that month, as well, Belron boosted its new U.S. position with an agreement to purchase Wisconsin's Auto Glass Specialists. One month later, Belron added new operations in California through the acquisition of Windshield Pros there. By then, Belron's international network boasted more than 1,300 shops in 28 countries. With revenues of more than EUR 1.3 billion ($1.5 billion), Belron remained the world's leading VGRR specialist.

Principal Subsidiaries

Elite Auto Glass Inc. (United States); GlasPro Inc. (United States); Hurtigruta (Norway); Lebeau (Canada); O'Brien (Australia); Smith & Smith (New Zealand).

Principal Competitors

Automotive Products Ltd.; Auto Glass Specialists Inc.; Safelite Glass Corporation; Saint Gobain Sekurit Deutschland GmbH and Company KG; Glassworks Plus Inc.; Botzaris Automobiles; Highway Emergency Services Ltd.; MidAmerican Auto Glass.

Key Dates:

1897:: Ernest Beardmore founds Plate Glass Bevelling & Silvering Company in Cape Town, South Africa.
1909:: Adolph Brodie founds City Glass in Capetown.
1917:: Beardmore and Brodie merge their companies as Plate Glass Bevelling & Silvering Company.
1921:: Morris Lubner becomes a partner with Brodie and opens a branch in Johannesburg.
1927:: The company launches vehicle glass manufacturing for Ford and General Motors in Port Elizabeth.
1931:: Laminated safety glass production is launched.
1947:: The company goes public as Plate Glass & Shatterprufe Industries (PGSI).
1962:: The company acquires Express Glass and becomes the leading South African VGRR group.
1971:: The first international expansion, into Australia, is initiated.
1983:: The company acquires the Windshields and Autoglass brands in the United Kingdom.
1988:: The company acquires the Carglass brand in France and Benelux.
1990:: The company establishes Windshields in the United States.
1992:: South African Brewers acquire control of PGSI.
1994:: VGRR operations are regrouped under the Belron holding company.
1996:: The company merges Windshields into Vistar Inc.
1997:: Vistar is merged into Safelite, which becomes the VGRR market leader in the United States.
1999:: D'Ieteren, of Belgium, acquires a majority stake in PGSI; Belron sells its stake in Safelite.