Most home cooks are familiar with household brands like Calphalon, Oster, Crock-Pot and Sunbeam. What they don’t know is that the makers of these products all share the same nonstick coating technology from GMM Nonstick Coatings, a privately held midsize company with global distribution. GMM CEO and Co-Founder Ravin Gandhi started the business in 2007 after helping to run and later sell off an earlier nonstick coatings business run by his family. Middle Market Growth talked to Gandhi about the influences that shaped his strategy.
MMG: How did you learn about the nonstick coatings business?
Ravin Gandhi: My family came to Chicago in 1969 from India. My dad was the classic poor immigrant. He was a chemist working in a factory up in Waukegan, Illinois, which is where I was born. He always had this goal to start a business. So my dad basically got a job at this company (Coatings & Chemical Corp.). Over the next 10 years, he and a partner turned that company into a manufacturer of nonstick coatings. My dad went to my sister and me who had finished undergrad and said, “Look, you guys were born in America, you’re very American, you could be great salespeople.”
There was no training program—just do whatever you want to do and just try to learn the business. It was a small business, we were probably doing $7 million or $8 million in sales, we probably had 25 employees, and it was fun, very much like a big family. I threw myself into the lab and so I learned the product.
MMG: What were some important takeaways from your time at CCC?
RG: You can’t be a sales guy unless you know your product. You will never have the technical skills needed. I was able to become a pretty good sales guy—I learned that sales is not only a business tool, it’s a life skill. It’s getting people to do something they don’t need to do when there are a lot of other people whispering in their ears.
I guess far and away my biggest accomplishment was selling CCC to AkzoNobel, the largest coatings company in the world. I put the deal together—I did all the negotiations, I handled it 100 percent from our family’s side. The new entity was called AkzoNobel Non-Stick Coatings. We had a facility in Chicago and a facility in Italy and (one) in India. I was 28 years old and it was great being a corporate president at that age. There was a lot of educational opportunity.
MMG: How was that business able to compete against Teflon and other big players?
RG: We actually took the biggest weakness and turned it into a strength. Teflon was a very iconic brand, and (its parent) DuPont is a great company. We couldn’t beat them at their own game, so we went to clients and said, obviously you can put a Teflon sticker on your pots, but you’ll be the same as everyone else in the market because they effectively have a monopoly position. We were able to craft a message: When it comes to nonstick coating, we believe the best brand name is your own.
“WHEN IT COMES TO NONSTICK COATING, WE BELIEVE THE BEST BRAND NAME IS YOUR OWN.”
MMG: Why did you start your own business?
RG: Unfortunately AkzoNobel didn’t manage the (CCC) business probably as well as they wanted to. The sales diminished over time—it’s a very classic tale—corporate culture not working with entrepreneurial culture. I left AkzoNobel in 2002 and I had a five-year non-compete agreement. In 2007 I decided to get back into the nonstick coatings business because I could. I partnered with CCC’s Asia sales manager, Raymond Chung. I had known Raymond since I was 22 years old. We had no clients, we had no people. We started the business with our own money. Raymond and I were both in positions through the CCC AkzoNobel (buyout) to have capital.
Raymond and I, having the reputation that we had in the industry, were able to hire back a lot of our key people who had worked for us at CCC and AkzoNobel and actually attract a lot of new people in the industry who worked in many other nonstick coatings companies. Today GMM has about 200-plus employees; we have a facility in Hong Kong and one in India, and we have an office in Chicago. We’re one of the largest companies in the world that makes nonstick coatings. And we sell to basically everybody that is a major player in the housewares space—there are about 40 million products per year that are coated with GMM coating.
MMG: What type of growth has GMM experienced?
RG: We are definitely a decent size. We have grown (sales) at 20 to 30 percent a year for the last three to four years. We are seeing that level of growth this year as well. We take a lot of business from our competition. It’s also a phenomenal industry—it’s growing —people need to cook. So GMM sells to most of the important people in this industry. We just hitch our wagons to these great clients and they grow. They buy their weaker competitors, expand their brand, and we continue growing with them. For us, it’s a very good strategy.
MMG: How does your company’s decentralized strategy work?
RG: I am sitting here in Chicago and I am the CEO of a company that has facilities in China and India. How is that possible? It’s possible because we’ve got technology. I do a lot of Skype and a lot of video conferencing, etc. We have good people who do their jobs. My focus at GMM is setting the company strategy and hiring our key people. I am obsessed with building a good sales and technical team. My time with the family business taught me that micromanaging makes scaling impossible. I set a lot of targets for performance.
Raymond is very much my counterpart in the business. He makes the trains run on time in China; he is a master of the Asian manufacturing footprint. He knows all of our key clients. But like me, he has also built a good team underneath him. Raymond and I speak every week to talk about strategy. But we have a lot of technology inside the company where we see a lot of reports, how things are going.
MMG: How do you describe the GMM culture?
RG: I think I have built a culture where we really let our people do their jobs. The sales people are all over our clients in the United States, Asia, Europe, the Middle East, Central America, they’re ginning up all of these sales opportunities. Our laboratory formulates products, ships them out, and in my industry you will not survive if you don’t innovate. This industry is all about innovation. We have a technical team that is absolutely second to none in this industry. We may not be the largest company in the world in nonstick coatings, but I would be willing to say that we far and away have the best people in sales and technology.
We have a lot of superstars today. As an example, we built a factory in India about three years ago and let our local general manager handle the entire project. He had lived in China for three years working for GMM, and then we sent him back to India with this mission. I have only been to this factory two times in three years. That factory today has 70 people working in it, all reporting to our local GM who is a very key employee. That plant ships millions of dollars of product all over the world with a 99.9 percent quality rate and it’s fantastic.
We do a lot of leadership training, we do a lot of internal education, we do a lot of culture stuff, and I think that the evidence is that I can’t even recall somebody who has quit our business. Most of the people who start with us, they stay with us. A lot of people have known us for years and years.
MMG: Is the nonstick coatings business recession-proof?
RG: I would never ever say the words recession-proof, but I will say GMM has never had a down year. I think you have to distinguish between secular and cyclical problems that happen in businesses. Any business is going to have some cyclical aspects. But you can’t obsolete cooking. The other giant secular trend that we love is healthy cooking, healthy eating. People don’t like slathering butter all over their foods. When you use coating, food cooks better; you don’t have to put all that stuff on there. Going after a market that isn’t going away—that’s something that I think we have going for us at GMM.