Surgey paints a brighter future for Plascon
PETER Surgey, CE of leading paint group Plascon, left a career in law in 1983 to join Barlows in industrial relations and human resources. In 1990, he joined Plascon and was appointed to the helm in 1992.
"As was typical with SA companies, especially Barlows' companies, Plascon was trying to be all things to all people," recounts Surgey, also a director of Barlows. "Each region had its own company, its own board of directors and it was not sustainable. Two things were happening: SA was coming out of isolation and the world's paint industry was undergoing accelerated concentration of ownership. We undertook a 'what if?' exercise looking five years ahead and concluded that to stay ahead in every aspect, there would need to be significant expenditure on research and development.
"As a single company, Plascon could not have done it all, so a decision was taken to split manufacturing from sales, to exit those areas where we were not a long-term player, and to seek joint ventures where we did have competence."
Surgey says it was a choice of either controlling one's own destiny, or being controlled by it. "It was very non-Barlows at the time to joint-venture, but the board supported my proposal for Plascon because it made sense."
A long association with British group Courtaulds gave rise to a joint venture in respect of powder-coating technology as well as the opportunity for Plascon to buy two paint businesses in Australia. Akzo Nobel, the world's biggest paint company, later bought Courtaulds.
In automotive original equipment the partner was Herberts of Germany, a Hoechst subsidiary now owned by Du Pont, and a third joint venture with Valspar-owned Dexter of the US is under discussion in respect of packaging coatings. Surgey says some luck has given Plascon three great partners.
"Joint ventures suited all the partners provided they had 51% as they did not want total exposure. It suited us too: instead of us absorbing 100% of a loss, we now get 49% of substantial profit-makers." Plascon turns over more than R1.7-billion a year and contributed 7% or R43-million to the Barlow group's earnings in the year to September 1998.
Surgey sees little room for technological improvement in Plascon Paints SA. "We are good in that, and we are part of the international group Nova, in which the 15 paint manufacturing members can benchmark their products against the Nova standards. We share technology, raw material information and so on."
But for Surgey, the most satisfying aspect of Plascon's development has been the international expansion. "We have expanded our core competence into the UK, where specialist paint is made for us. There is overcapacity in the UK and it is ideal to use an existing producer. One aspect has been on paint for use on both wall and lino floor tiles, which has been very successful."
Plascon has also ventured into Australia, where it bought Taubman's - the oldest manufacturer - and Lane's Bristol Paints to become the joint No 2 in decorative paints in less than two years.
"Now we have a presence overseas, we can expand from there," says Surgey, who visited Australia 11 times in six months last year negotiating the deal.
Raised in Zimbabwe, Surgey studied law at the University of Cape Town and practised in the legal profession before joining Plascon. So, was a career watching paint dry more inviting than one in law? "It must be said that working in labour law and human resources during the 1980s was very interesting as so much was going on. But when I was offered a job in general management at Plascon and made the move into business, that was it."
Surgey lives with his daughter and son, and spends his free time with the family. He enjoys a bit of golf (Plascon is a major sponsor at this weekend's Million Dollar golf tournament), fishing, cricket and "all sorts of other things".