Nevamar Company

8339 Telegraph Road
Odenton, Maryland 21113-1397
U.S.A.
Telephone: (410) 551-5000
Toll Free: (800) 638-4380
Fax: (410) 519-2072
Web site: http://www.nevamar.com

Wholly Owned Subsidiary of Panolam Industries International, Inc.
Founded: 1939 as National Plastic Products Company
Employees: 1,600
Sales: $378 million (2003)
NAIC: 326130 Laminated Plastics, Plate, Sheet, and Shape Manufacturing

A subsidiary of Panolam Industries International, Inc., Nevamar Company is an Odenton, Maryland-based manufacturer of decorative, protective laminate products. They are used for countertops, tabletops, wall panels, interior doors, furniture, and other applications. Nevamar offers high pressure laminates, featuring a plastic substrate molded at pressures as high as 2,000 pounds per square inch; specialty laminates that may be chemical resistant or fire resistant, offer static dissipation, are suitable for signage, or engineered to meet other specific needs, such as a special grade for rail cars and buses; thermofused melamine panels, for use in furniture, cabinets, and doors; and metal laminates to provide a polished and brushed color finish and other distinctive looks in furniture and interiors. Navamar products are manufactured at four plants. The company maintains six distribution centers in the United States and sells its products around the world through a network of independent distributors.

COMPANY FOUNDED: 1939

Nevamar was founded in 1939 as the National Plastic Products Company by the Winer family in Baltimore, Maryland, owners of a cabinetmaking business who were one of the first to make use of high-pressure, plastic-based laminating technology to produce veneers for cabinet surfaces. In 1943, they moved their fledgling operation to Odenton, in central Maryland, a town that had been built around the Washington, Baltimore and Annapolis Railroad. Odenton had enjoyed its heyday during World War I when the railroad's owners convinced the government to establish Camp Meade in the area. With the end of the war and the rise of the automobile, WB&A struggled, as did Odenton, which fared even worse during the Great Depression of the 1930s when the railroad went bankrupt. The Winers were able to move the National Plastic operation into the abandoned WB&A car shops, revitalize the area economy, and in effect turn Odenton into a company town. During the war years, National Plastic focused on the production of war materials, but with the end of hostilities in 1945 the company turned its attention to consumer products.

National Plastic trademarked the Nevamar name for its laminates in 1946, but it also became involved in other forms of plastic production, including filaments made from such polymers as polyolefin and nylon, as well as molded products and extrusions. In addition to Nevamar laminates, the company made paint brush bristles, doll hair, textiles, and even hula hoops. By the start of the 1960s National Plastic was doing about $20 million in annual sales.

WINER FAMILY SELLS: 1961

In August 1961 the Winer family sold the business to a 50-50 joint venture formed by textile producer J.P. Stevens and Enjay Chemical Co., a division of Humble Oil & Refining, which a decade later would become known as Exxon. The oil company was interested in National Plastic's extruded fiber technology, but by the end of the 1960s all of National Plastic's assets were sold, save the Nevamar business. National Plastic was one of about 15 companies competing in laminates and was hardly a major force in the field, barely breaking even and very much directionless. Exxon managers were assigned to the company on a two-year basis and, as a result, the business stagnated.

Permanent members of National Plastic's management team decided to take matters into their own hands in 1969, forming a study group to develop a ten-year plan. It soon became apparent that the company was devoting too many resources on commodity items that were price dependent. Larger rivals could simply use their scale to produce laminates at a price National Plastic could not hope to match. The group decided that the company needed to play to its strength: product design. Instead of producing cheap laminates for the residential market, the plan was to focus on more expensive, better designed laminates for the commercial market. Not only would the company gain a competitive edge, one not dependent on size, it would also improve profit margins.

In the 1960s and early 1970s, National Plastic developed a number of dimensional finishes. Some of the most innovative designs were Fossil, which offered a look similar to fossilized artifacts; a Fresco Finish that had a natural wood grain look; Glaze, reminiscent of vitreous china; Slate Finish, the industry's first sculptured laminate, which gave the appearance of quarried slate; and Leather, a pattern that offered a three-dimensional leather appearance. In the mid-1970s National Plastic introduced a number of natural patterns, including Butcher Block; Registered Cane and Classic Cane, providing a woven look; Natural Cork; Registered Leather; Blue Denim; and Natural Finish Woods.

National Plastic was enjoying success with its ten-year plan when Exxon decided to focus on its core business and sell the laminate business. Three National Plastic executives—Herb Scher, Charles Jackson, and Norman Roux—decided to make their bid for the company and tried to drum up financial backing from Goldman Sachs & Co. Instead, another backer emerged in Chagrin Valley Corporation (CVC), a new Cleveland investment group on the lookout for a company to buy. Their offer of $12 million was accepted by Exxon, but the man they wanted to run the company, which would assume the Nevamar name, was Roux, who decided to stay with Exxon. Instead, a CVC partner, John W. Cullen, was dispatched to run Nevamar on a temporary basis. He would act as the company's chief executive for more than a dozen years.

A graduate of both Duke University and Harvard University, Cullen brought a rich and varied business background to Nevamar. He had worked for a pair of innovative companies: the famous consulting firm of McKinsey & Co., and International Management Group, the pioneering sports management business founded by visionary Mark H. McCormack. Cullen was experienced in promoting team work and problem solving, skills that would be put to the test. Nine of Nevamar's executives had been given a piece of the business by CVC, including Scher and Jackson. Rather than come in and insist on putting his stamp on the company, Cullen was content to promote a group effort in building the business.

A little more than a year after breaking away from Exxon, Nevamar found itself short of cash due to the $5 million purchase of a new laminate press and $3 million spent to acquire a General Electric laminate unit, Textalite. Nevamar was able to secure a loan from the Farmers Home Administration, the mandate of which was to help rural companies of less than 500 employees. However, in terms of employment, Nevamar barely qualified. According to Warfield's magazine, "To convince Farm's Home officials that Nevamar was suitably bucolic, Vice President for Finance C. Gordon McBee drove them from the airport to Odenton by every back road and cow pasture he could find."

COMPANY PERSPECTIVES

With a widely respected brand for high style, durability and customized solutions, Nevamar is firmly positioned as a one of the top manufacturers of decorative laminates, specialty laminates and TFM panels in North America.

Nevamar resumed its efforts to build up its commercial business. To do this the company courted designers, forging relationships that over the long-term would allow Nevamar to anticipate the kind of patterns the commercial market would want, highly important because a year or two lead time was necessary in introducing a new pattern. It was from talking to designers that Nevamar began to understand their customers wanted something they could not quite put into words. The company distilled it down to the idea of "visual texture," a laminate that was smooth to the touch yet looked textured and could be produced in a range of colors.

Nevamar technicians went to school on the way the brain perceives texture and then used computers to generate laminate patterns that met the need for visual textures, resulting in what it call the Matrix Pattern. It was a true breakthrough that would result in a standard category for all laminate manufacturers. First, Nevamar had to iron out the engraving process, creating a proprietary process to accomplish the task, and find the right protective overlay to protect the pattern from abrasion. The standard paper overlay resulted in a milky appearance, but this problem was solved with the development of a patented coating, ARP Surface, that relied on microscopic particles of aluminum oxide.

The Matrix line secured Nevamar's place in the laminate industry as a true innovator. Moreover, the product was a hit, and basic laminates soon accounted for 80 percent of the company's revenues. The rest of the business came from specialty products, "thick sheets." Not content with being overly dependent on basic laminates, Nevamar began looking for new products and in 1981 decided there was an opportunity to challenge DuPont and its Corian product, which since the 1960s had enjoyed a virtual monopoly. It was a moldable material that was ideal for kitchen and bathroom countertops as well as shower surrounds. It was an attractive business for Nevamar because it was high-end and it could be sold to the same customers that bought the company's laminates. Corian's main drawbacks were that it came in just one width and offered little more than white as a color. Nevamar devoted four years and spent as much as $20 million to develop its own product, which it introduced in 1985 as Fountainhead. Priced similarly to Corian, it came in a variety of widths, patterns, and colors. As it turned out, many fabricators remained committed to Corian, forcing Nevamar to develop its own fabricator network.

INTERNATIONAL PAPER ACQUIRES BUSINESS: 1990

CVC had cashed out in 1984, selling the business to the New York venture capital firm of Clayton & Dublier Inc., which by 1988 was ready to take its profit. Cullen and his management team thought about engineering another buyout, backed by Kohlberg & Co., but in the end decided against the move. Three suitors came calling, and in May 1990 the offer made by International Paper was accepted. International Paper picked up a company with $140 million in annual sales and brand name recognition—overall, a nice complement to International Paper's Masonite and Polrey subsidiaries. For its part, Nevamar hoped to take advantage of International Paper's deep pockets and marketing reach to grow its business overseas. In addition to its lone manufacturing plant, Nevamar operated 20 distribution centers.

Under new ownership, Nevamar continued to develop innovative products. The company introduced Hallmark Laminates, which offered a unique luminescent effect and could be applied both horizontally and vertically. Nevamar also brought out its LamMates line of thermalfused melamine panels.

KEY DATES

1939:

The company is founded as National Plastic Products Company by the Winer family.

1943:

Production is moved to Odenton, Maryland.

1946:

The Nevamar name is trademarked.

1961:

The Winers sell their company to a partnership of the J.P. Stevens company and a division of Humble Oil & Refining.

1978:

Chagrin Valley Corporation acquires the company.

1990:

International Paper acquires Nevamar.

1995:

Micarta business is acquired by Nevamar.

2003:

The Odenton plant closes.

2006:

Nevamar is acquired by Panolam Industries International, Inc.

In 1995 Nevamar benefitted from the resources of its parent company, when International Paper acquired the Special Materials Division of Westinghouse Electric Company, known as Micarta, a Nevamar rival in the high-pressure laminate field and a company with its own rich history. Micarta was founded in 1905 by George Westinghouse, an inventor who had made his reputation and fortune on the railcar air brake, but had also became involved in electric power and other fields, and developed into one of America's great industrialists. In his search for electrical insulating materials, Westinghouse purchased the rights to an insulating sheet that used shellac to fuse mica to paper, and trademarked the product as Micarta. While Micarta would serve its purpose as an electrical insulating material, still used today in such applications as the space shuttle, the Westinghouse company would soon take the business in new directions. In the 1910s it developed a way to bond a decorative sheet to regular paper, creating an early decorative laminate. The engineer responsible for the product was quick to leave Westinghouse to become a competitor. He founded the Formica Corporation, and was so successful that Formica became, to the general public, a generic term for laminate countertops. The Micarta division, meanwhile, continued to be a force in the laminate field and after World War II focused on decorative laminates for use in furniture and housing.

International Paper folded Micarta into the Nevamar operations. By this point Nevamar's Maryland plant was operating at full capacity, and it welcomed the addition of Micarta's plant located in Hampton, South Carolina, which was able to take on more work.

International Paper decided to exit the laminates field in 2002, selling its entire Decorative Products Division to Kohlberg & Co. The assets were packaged into a new corporate entity called Nevamar Company. They included ten manufacturing sites that produced laminates as well as particleboard, man-made veneer, and foam-based graphics, and insulation products. Kohlberg sold the non-laminate assets and in 2003, after 60 years in operation, the Odenton, Maryland, plant was closed, although the company would continue to maintain its corporate headquarters in Odenton. The high-pressure laminate production done in Maryland was moved to Hampton, South Carolina, where Nevamar was able to negotiate a package of tax reductions, wage concession, and other concessions that Odenton and the State of Maryland were unable to match.

Ownership of Nevamar changed hands again in 2006 when Panolam Industries International, Inc., the North American market leader in the decorative laminate panel industry, acquired the business. Nevamar was an ideal fit for Panolam, which added a strong brand name to its stable and beefed up its distribution network. For Nevamar it marked the beginning of a new chapter in its history, as it looked to find its place with a new corporate parent.

PRINCIPAL COMPETITORS

Armstrong Holdings, Inc.; Formica Corporation; Pergo AB.

FURTHER READING

Goldstein, Stephen, "Paper Firm Buys Nevamar Corp.," Washington Times, March 27, 1990, p. 3.

Hopkins, Jamie Smith, "Odenton, Md., Laminate Maker Nevamar to Close Plant," Baltimore Sun, October 3, 2003.

Keiger, Dale, "Surface Tension," Warfield's, December 1, 1990, p. 51.

Wachter, Paul, "Laminate Manufacturer Chooses Hampton, S.C. Plant Over Odenton, Md., Plant," State (Columbia, S.C.), November 30, 2003.