The colour of success Flügger Group

THE COLOUR OF SUCCESS

The Flügger group is one of Scandinavia’s largest producers and suppliers of paint products. Abigail Saltmarsh looks at its growing operation.

CEO of Flügger, Søren P. Olesen, is looking for growth within the group’s existing markets by strengthening its operation where it already has a presence. The group, which produces and markets a full range of architectural paint, wood stain, wallpaper and painting tools, is one of Scandinavia’s largest producers and suppliers of paint products.

Danish owned, and with some 1500 employees, the group has its own production facilities and a chain of 300 retail stores. It also supplies more than 300 franchise operations.

“We are looking for growth in our existing markets – Scandinavia, the north Atlantic, Poland, the Czech Republic and China,” he says. “We are looking for organic growth through the optimisation of our markets, which means opening more stores.”

Flügger was established in 1783, by Johan Daniel Flügger. It remained in the Flügger family through four generations until 1973. In 1975, the Flügger chain of shops was founded and in 1983 the group went public. Between 1984 and 1985, it then bought Fiona, Denmark’s largest wallpaper factory, and Dansk Smergelfabrik, Denmark’s only manufacturer of abrasive materials.

Both factories later merged with Flügger A/S. In Sweden, the company bought Stiwex AB and Forsbergs Børstefabrik, paint brush and paint roller factories, which later merged under the name Stiwex AB.

A market leader

In the 1990s, the Swedish platform was expanded. Flügger bought HP Färg & Kemi, Sweden’s third-largest paint and varnish factory that later changed its name to Flügger AB, and it established a new central warehouse in Gothenburg with room for 11,500 pallets, in order to serve the Swedish and Norwegian markets.

In 2004, Flügger bought HarpaSjöfn in Iceland – making Flügger the market leader in the North Atlantic region. The acquisition was made to follow the strategy of development in the Nordic countries.

Since then, Flügger has grown as an international business. In 2010, it opened Scandinavia’s largest online paint shop and established its chain of shops in the Czech Republic.

“Today, approximately two-thirds of our production goes to professional painters and the remaining one-third to end users,” explains Mr Olesen. “Our core business is to

distribute and market a wide range of paints, decorative products and tools.”

Flügger produces a range of brands but its own is its largest. Now the extensive range of products includes paint, wood stain, filler, wallpaper adhesive, wall coverings, abrasive materials, brushes, tools and cleaning products.

“We have seven production sites in total and we still have plenty of capacity. All the sites produce for their local markets,” he adds.

A variety of specialist areas

In Denmark, the factory in Kolding manufactures around 20 billion litres of water-based paint, wood preservation and wall paper adhesive every year. When this factory was modernised, it was also decorated by artist Poul Gernes, who is famous for his systematic work with colour. Also in Denmark, in Fåborg, some 10,000km of wallpaper and wallcoverings are manufactured annually.

In Sweden, there are factories in Bollebygd, Bankeryd and Bodafors. The factory in Bollebygd manufactures water-based and solvent-based paint, wood preservation, cleaning products, and filler while at Bankeryd brushes and rollers are made. At the factory in Bodafors, plastic handles for brushes, rollers and filling knives, as well as

other plastic components, such as lids and packaging, are manufactured.

The newest Flügger factory is situated in Gdansk. This is the most modern wallpaper factory in Europe. “We also have a factory in Shanghai, China, where we manufacture water-based paint, primer and wallpaper adhesive. Here, production, which began in 2009, has nearly doubled since the first year,” he says.

A better understanding

The group’s retail chain, Flügger Décor, has approximately 600 shops across Scandinavia, eastern Europe and China. Flügger owns about half of these stores.

The shops have maintained their core focus on professional quality, and this concept has proved its viability in a wide array of markets, says Mr Olesen.

“As opposed to traditional retail shop chains, we develop, produce and sell our own products. This provides us with an important knowledge about our customers,” he adds. We believe we have seen such success because we have this distribution network that allows us to be close to our customers. This also means we understand them very well.” n