Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
November 24, 2003 01:00 AM

Vic De Zen's Royal exit will herald change

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    For building products giant Royal Group Technologies Ltd., the end of 2003 means colossal changes, including the retirement of Vic De Zen, its iconoclastic founder, and a repositioning of its strategy.

    It's a highly significant transformation for the profile extruder, as the De Zen name fades from day-to-day involvement and a realigned management team takes the helm.

    Officials even explored a possible sale, but they now say that process has ended.

    ``As far as I'm concerned, that has been abandoned,'' President Doug Dunsmuir told analysts and shareholders during the firm's Nov. 19 conference call announcing fourth-quarter results.

    ``It's difficult to really say whether or not it was generated externally or internally. It was just something that happened.''

    While the company said there was a lot of interest expressed in a sale, the four-month process resulted in no formal offer.

    Royal Group officials announced De Zen's retirement Nov. 17. Now in his 60s, De Zen still will be involved as a nonexecutive chairman. He will maintain his ownership of 80 percent of the voting shares.

    ``After 33 years, it's hard for me to say I'm going to retire,'' De Zen said during the conference call. ``Doug is now your chief executive officer.''

    De Zen said in a statement that he is looking forward to spending more time with his family and friends, but days of rest and relaxation seem unlikely for a man who has built a reputation for being a workaholic, highly involved in the operations of his company.

    Under De Zen, Royal became a vertically integrated, international force in polymer-related building and construction products, ranking No. 1 for 10 consecutive years in Plastics News' sales-based survey of pipe, profile and tubing makers.

    But 2003 has been less than favorable for Royal, which struggled under substantial losses in its window coverings operations; low capacity-utilization rates that hovered just above 60 percent; and high raw material prices.

    Under pressure from shareholders, the firm in July announced changes to Dunsmuir and De Zen's 2002 bonuses. Royal's directors revised the salary structure and replaced the bonus program with one based on return on invested capital.

    Like other Canadian manufacturers, Royal has been hurt by the surge in the Canadian dollar.

    ``I don't know how retired he'll really be, but he's likely to give them more free rein now,'' said Jay McKinnell, an industrial products analyst with Raymond James Ltd. in Toronto.

    Under Dunsmuir's leadership, the company will develop core businesses while emphasizing aggressive sales and marketing. The core businesses include custom profiles and exterior cladding. Dunsmuir said Royal will step up participation in trade shows and targeted ad campaigns.

    Royal will add sales staff and analyze ways to accelerate introduction of new products. The company will anchor it all with a new corporate identity campaign, targeted to boost consumer awareness of Royal.

    Royal Building Systems and Foreign Operations are being restructured, as the company will focus on operations in Mexico, China and Poland, and divest operations in the Philippines.

    ``These initiatives will not result in quantum leaps in sales overnight,'' Dunsmuir said. ``But they will help us in securing an increasing share of profitable target markets.''

    The firm has named Tony DiGinisa senior vice president of custom profiles and appointed two new independent directors, giving the board a majority of independent directors.

    The firm had announced several management changes in September, naming Angelo Bitondo senior vice president of operations. Ron Goegan became a senior vice president, in addition to his role as chief financial officer. At that time, the firm announced that De Zen and Dunsmuir would share the CEO title.

    ``It takes a crisis sometimes to get a change, and now we've got the change,'' McKinnell said. ``It's going to be a fascinating process to watch over the next couple years.''

    Royal already has started closing plants. By the first half of 2004, an injection molding plant in Cornwall, Ontario, will be consolidated into a window coverings extrusion plant in Quebec. Metal-stamping operations will be consolidated into an Ontario facility where Royal produces storage sheds, fencing, decking and railing.

    ``No stone will be left unturned,'' Dunsmuir said. ``By locating these operations in the same facilities, we will increase efficiencies and reduce direct overhead costs. We will continue to pursue all practical opportunities to consolidate other operations as well.''

    It was under De Zen that Royal built its massive industrial complex in Woodbridge, Ontario: a 205-acre, 14-plant site. Officials said no plants in the United States will be affected; in fact, they said they plan to expand one extrusion site near Pittsburgh.

    ``We will use some of our underutilized manufacturing plants to produce products for those plants that are constrained,'' Dunsmuir said. ``We are now producing cellular foam moldings at our Houston window coverings plant and are presently converting additional lines to those products.''

    Still, despite the problems, others believe De Zen should be the man in charge.

    ``We are somewhat surprised by the timing of this announcement on a couple of fronts,'' Merrill Lynch senior analyst Pat Chiefalo stated in a Nov. 17 report.

    ``First, the succession time frame is very quick, with Dunsmuir only receiving the co-reins two months ago. Further, the actual departure as CEO for De Zen will occur in a month from the current initial announcement, which is also somewhat hastier than is the norm.

    ``Vic De Zen has been the main force behind Royal Group Tech since the company's inception, driving tremendous sales growth,'' Chiefalo said.

    ``We view this loss of expertise as a negative for the company,'' he added.

    But others think De Zen's departure is not coincidental, timed after an unsuccessful sale process where potential buyers could not meet his minimum price.

    ``It all started to make sense,'' McKinnell said. ``He's turned a big page here, and I agree with their story about how there was lots of interest.''

    Now, analysts said, Dunsmuir and his team can make substantial changes that are necessary in the current market.

    What is necessary and practical does not necessarily jibe with a founder's favorites, and the new management team can move ahead without the intrusion of an entrepreneur's personality, typically a stubborn, driven style.

    ``There are no sacred cows, no sacred protection for the founder's pet projects,'' said McKinnell, who theorized that the new team may prep the company for a possible sale in a few years.

    ``The plant consolidations are just a beginning. I would speculate that there would be sales of entire divisions, like window coverings.''

    In the fourth quarter, the lagging window coverings division did achieve positive earnings before interest, taxes, depreciation, amortization and minority interest, officials said.

    The firm reported total sales of C$527 million (US$390 million) compared with C$547 million (US$347 million) for the same period in 2002, which officials attributed to U.S. dollar denominated sales being recorded at a lesser exchange rate.

    RECOMMENDED FOR YOU
    Tennessee-based insulation maker adding equipment, jobs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    National bottle bill ‘could make sense,' senator says
    2
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    3
    PS resin prices continue their climb
    4
    Play Mart expanding in Kentucky, adding jobs
    5
    Resin Prices - North America
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified