"We have doubled our paint business over the past three years to approximately $100 million and now command 32% of Central America's paint volume," said Yara Argueta, CEO of the Guatemala City-based company, which is controlled by the Ascoli family.
The company is planning to grow in "four dimensions" and spending approximately $10 million over the near term, with expectations that manufacturing capacity at a new plant at Estuintla, near Puerto Quetzal on the Pacific coast, will increase the current capacity of 15 million liters to 20 million, then 25 million liters and beyond, according to Argueta. A second pillar of growth support will be continued strengthening of the company's position within Central America; Grupo Solid now has offices in Costa Rica, El Salvador, Honduras, Panama and Nicaragua, apart from the Guatemalan base.
The third pillar of growth will be to expand segment activity from architectural line dominance to a greater presence in automotive and wood coatings. This expansion will also include greater sales of paint-related products including brushes, solvents and other hardware. And the fourth pillar of the plan is to vertically integrate into the manufacture of more raw materials; while the company currently produces alkyd resins, it does not yet produce latex resins. Such vertical integration may also include greater packaging capabilities with plastics.
"It's very aggressive, but we are going to more than double our capacity and sales," Argueta said. Among new country markets the company is targeting are Puerto Rico and Cuba, southern Mexico, Colombia and Peru. Colombia will serve as a sub-regional distribution center for the company as Panama does.
A critical tool of growth is intense marketing, Argueta said. Lower expenditures on oil this year will permit more marketing, she suggested. The company's lines already are distributed by Home Depot in some parts of Mexico, and it expects to begin sales through Nacional in Puerto Rico. The company operates its own hardware distribution chain, called DeFerret, and has a network of retail sales stores under the Sytec brand and franchises under the Corona brand. Overall, more than 6,000 points of sale are in the company system.
While the Central American region has suffered economically from the global slowdown, the rising per capita gross domestic product (GDP) is encouraging household paint sales, Argueta said. The country's estimated $68 billion economy translates into per capita GDP of $5,200, according to varying U.S. government estimates. Still the distribution of wealth is highly skewed in Guatemala.
Among leading brands, Grupo Solid produces La Paleta, Corona and Nova brands, as well as specialty brands Cromatic and Clasica. In 2004, the company began exclusive regional distribution of AkzoNobel's International line, and in 2005 added distribution of the Wanda and Sikkens brands.