Though supply chain woes have slowed recent growth, VP of Manufacturing Clay Fenstermaker says the interior and exterior coatings company is in a “great position.”
Founded in 1925 as a Los Angeles wallpaper store, the company began manufacturing paint after Frank Dunn brought on Arthur Edwards as a partner in 1938. In the years since, Dunn-Edwards Paints has grown to employ 1,900 workers and manufacture 15 million gallons of paint and primer annually.
Fenstermaker, who previously worked in the automotive industry, joined the Dunn-Edwards team around 12 years ago as the company was building the world’s first LEED gold-certified paint manufacturing facility in anticipation of moving production to Phoenix, Arizona.
“It was a fun challenge for me,” Fenstermaker says of the 336,000-square-foot facility. “In building this plant, we had a real focus on new automation and technology in what otherwise had been a relatively stagnant industry.”
Once opened, the Phoenix plant replaced Dunn-Edwards Paints’ previous World War II era manufacturing facility in California, another in Tempe, Arizona, built in the 1970s, and a third in Albuquerque, New Mexico.
The company’s headquarters and research and development lab remain in Los Angeles. In addition to manufacturing operations, the Arizona facility houses Dunn-Edwards Paints’ warehousing and distribution operations. “We have plenty of room for growth,” Fenstermaker adds. “When we combined our facilities, we set up this operation to cover future growth in a highly automated fashion.”
Why consolidate in Arizona? Fenstermaker says several factors drove the decision, with the first being a desire to avoid potential manufacturing disruptions caused by earthquakes. “Arizona does not have earthquakes,” he explains. “That’s a big plus over California.”
Secondly, the company’s primary markets are Southern California and Arizona, and the Phoenix location enables them to access convenient shipping routes back into California. “All the trucks leaving the Port of Los Angeles full are heading back there for their next loads,” he continues. “You get pretty good rates going west back into LA.”
While the outbound shipping situation has been advantageous, receipt of inbound raw materials has been snarled by storms as well as COVID since March of 2020. As a result, Dunn-Edwards Paints’ recent growth has been “severely limited by supply chain concerns,” Fenstermaker says.
“The Texas freeze hit a lot of the petrochemical industry that builds a lot of the precursors for raw materials that we use,” he explains. “That had a huge impact. Then Hurricane Ida put another damper on that recovery. It’s fair to say that for the last seven months, we’ve had a variety of vendors that have been under force majeure allocations. However, we’ve continued to do everything we can do to keep our customers supplied through all of this.”
Fenstermaker says that 90 percent of the company’s volume goes to professional painters, with the remaining 10 percent split between homeowner DIY and an extensive dealer network. “We export out to 13 countries around the world,” he adds. “A lot of that is going over to Asia where there is demand for high-end products.”
Not only are Dunn-Edwards’ primers, undercoaters, paints, and sealers high-end and high-performance, they’re also “greener by design.” The company’s website explains this focus on manufacturing products that protect and preserve the built environment — and thereby help to conserve natural resources — as well as protect human health and safety. Dunn-Edwards Paints’ formulations are all water-based and never include harmful chemicals such as asbestos, benzene, cadmium or chromium pigments, chlorinated solvents, dioxin, ethylene glycol, formaldehyde, lead, mercury, methylene chloride, or phthalates.
Employee safety is also important to the organization. “In building the new plant, we wanted to obtain a VPP certification from OSHA,” Fenstermaker says, “which is their Voluntary Protection Program, kind of their top tier of recognition for safety. After working on that for 10 years, we finally went through our audit earlier [in October] and received a positive recommendation. We expect to receive that VPP certification shortly.”
Challenges: “Raw material supply,” Fenstermaker says. “It seems like a lot of it started off with facility issues tied to storms and now logistics and transportation. Beyond that, hiring has been tough this past year as we look to keep getting talented, team-focused employees who are ready to grow with us. We raised our wages to try to attract some more talent. That has helped some, but we still have open positions that we’re working to fill.”
Opportunities: Dunn-Edwards Paints merged with Nippon Paint Holdings Co. Ltd. (NPCPF) in 2017. The top paint manufacturer in Japan, Asia, Australia, and Turkey, Nippon Paint previously lacked a consumer coatings presence in the United States.
“Throughout our history, we’ve always looked for growth,” Fenstermaker says, “and we’re in a great position with a great company and product and now the backing of a major global player to work on that.”
Needs: “We’re completely limited on what we can make by [the raw materials] we can get in the door,” Fenstermaker says. “But if we can take care of that challenge, I feel like we’re in a great position for successful growth.”