PM Profile: Viega Sets Stage For Future Growth
Plumbing & Mechanical last month interviewed Dan Schmierer, CEO of Viega’s North American operations. He joined Viega in 2000 when the German-based plumbing-and-heating manufacturer of pipe-joining systems entered this market. Viega now employs about 500 people, with its headquarters in Wichita, Kan.
Before coming to Viega, Schmierer held positions with Uponor, DuPont and Kurt Salmon Associates. He has more than 38 years of management experience.
PM: What signal did you send to the industry last year when Viega opened its new manufacturing facility in McPherson, Kan., during the recession?
DS: Two signals. First, Viega is a very strategically minded company. Decisions Viega makes in the United States and Germany are five- and 10-year decisions. Building the factory to set the stage for further dramatic growth was critical. Not much attention was paid at all to if the country were in a recession or in growth mode. It was essential to show that Viega is serious about North America as well as establish a base for future growth.
The second signal is that, financially, Viega is a very strong enterprise on a worldwide basis. Viega is a fourth-generation, family-owned business that wants to invest in an aggressive investment climate.
PM: Has Viega seen the start of the economic recovery and, if so, in what markets?
DS: Yes, but not in all markets. We segment our business into three areas: PureFlow is residential; ProPress is commercial; ProPress Stainless is primarily industrial. We see PureFlow growth with a definite uptick in our PEX-related business. We’ve seen signs of turnaround in the residential market and we’re encouraged by the uptick in housing starts. Our proprietary fitting systems, particularly our bronze press-connection system, are selling well at expense of brass crimp fittings.
In the commercial and industrial segments, a large number of projects are on hold due to a delay in financing. The market is there. The main problem is that the factory and commercial projects that can be delayed have been delayed. We’re optimistic, but it will be a slow recovery. 2010 is the year the recovery begins. In 2011, we are expecting to be back to double-digit sales levels growth in all our segments.
PM: What opportunities does the green building movement offer to plumbing and mechanical contractors?
DS: There are two ways we look at green: flameless technology for safety, and radiant heating and cooling applications for energy-saving applications. Safety and environmental considerations have always been strong selling points for our flameless technology. The safety, cleanliness and specification aspects are significant advantages for ProPress systems competing against welded or soldered products, especially in applications involving schools and hospitals.
On the energy-saving side, radiant systems are a more efficient way to transmit heating and cooling through water compared with forced air. Our ProRadiant systems will be growth systems.
PM: What differentiates Viega’s new fire sprinkler system?
DS: The market leader now is a CPVC system. Our systems offer two advantages: They’re much easier to install vs. a rigid system that needs to be glued together. Second, as soon as you introduce glue, the system is not as green. Our systems are faster and flameless vs. any welded metal or glued system.
Compared with other fire sprinkler systems, we offer a range of fitting options. The preferred joining system would be a PureFlow bronze PEX Press system and the ProPress copper systems. So, we have more joining options for more application types.
We also have a large factory sales force. Our competitors sell through agent networks. We have more people who can assist with sales and technical information.
PM: What can plumbing and mechanical contractors expect to see from Viega in the second half of 2010?
DS: First, we’re hiring again. We have 150 people in our sales department; 30 or so are inside sales or customer service, all of whom directly interact with customers. We have 120 people in outside sales. We’re adding 10 more people in the second half. That’s a change in trend in the last 18 months. The new people will sell ProPress Stainless and ProPress. We’ll be very strong in pull-through marketing - selling to engineers, contractors, architects and other decision-makers. Viega 200 is a program where the goal is to have 200 factory-employed salespeople. When introducing new product, you need a strong, committed sales force to generate value for your product. That’s just good business to increase face time with your customers.
Second, we’re very active in fire sprinkler systems. We’ve just had the formal rollout of Viega’s fire sprinkler offering. We’re in the process of training our sales organization and getting them more involved.
There are two routes to market for fire sprinklers. The first is with separate stand-alone systems represented by entrenched sprinkler manufacturers. We’re very likely to partner with one of these companies in a more formal way. We’re not in the sprinkler head business.
The other avenue into the fire sprinkler market is through the plumbing channel. This is more of a plumbing orientation than stand-alone systems.
As soon as everyone gets comfortable with fire sprinkler code changes, there will be a gold rush, which will include large wholesalers and buying groups. Contractors will see a lot more sprinkler activity from Viega.
PM: What other changes in product technology and materials can contractors expect from Viega?
DS: We have worked very hard on our strategic plan in last three to four months. Our mission states, “We enhance lives by providing quality, safe and innovative piping systems.” The key words are piping systems. We’ll introduce systems that will employ ProPress-style technology with other materials, particularly for industrial and commercial markets. We won’t come out too far from our knitting.
PM: What do you see as Viega’s greatest accomplishment or most distinguishing feature?
DS: Without question, it’s the ProPress success story. In the last 10 years, we’ve changed the way that a pretty conservative industry like plumbing thinks about joining copper. We’ve offered new and better technology. ProPress went from being an unknown to the brand leader for press technology with an army of people pulling it through.
I’m most proud of the ProPress story and, more broadly, our growth. We’ve taken a company no one heard of to a recognized player in the plumbing-and-heating industry. We came from nowhere to having a place at the table. About half has been organic growth with new products we’ve introduced; the other half has been from acquisitions. The development of the Viega brand is an ongoing saga. We’ve had fantastic marketing communications.
PM: In what ways does Viega connect with contractors?
DS: If you’re going to get serious about pull-through marketing, you better have a couple hundred people involved. It takes a lot of shoe leather because it’s incredible how many places you have to go and how often you have to go there for you to make an impact. The big and small mechanical contractors make the decisions in the commercial market. In the residential market, more of what the building community thinks comes into play. In the industrial market, the facility staff people get involved. The market doesn’t develop itself; you have to do it yourself.
PM: If you had one message to give to contractors, what would it be?
DS: We understand who the boss is, and it’s not us. We have no illusion about who the quarterback is. We’re just trying to play a role here. We recognize who’s at the top of the food chain and who’s calling the shots. It’s the contractors, engineers, builders, school authorities and other decision-makers. We’re committed to interacting with them to understand what their needs are and offer solutions and education to better meet their needs. Our solutions are high-quality, technically innovative systems. We want to be part of the solution, not part of the problem.