McPherson's Ltd.

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McPherson's Ltd.

5 Dunlop Road
Mulgrave 3170
Australia
Telephone: 03395663300
Fax: 0395749075
Web site: http://www.mcphersons.com.au

Public Company
Incorporated: 1913
Employees: 935
Sales: AUD 333.32 million ($242.65 million) (2004)
Stock Exchanges: Australian
Ticker Symbol: MCP
NAIC: 332211 Cutlery and Flatware (Except Precious) Manufacturing; 339912 Silverware and Plated Ware Manufacturing

McPherson's Ltd. is a holding company encompassing three strategic activities: housewares, printing, and, since 2003, health and beauty care products. Housewares represents the company's closest link to its origins as an 1880s Melbourne-based pig iron trader, with the company's extensive range of silverware and kitchenware brands. McPherson's markets and distributes cutlery, kitchen tools, glassware, bakeware, dinnerware, cookware, knives, and other kitchen and tableware, as well as household goods including scissors, scales, barbecue accessories, door mats, garden tools, bathroom accessories, and the like. The company's range of brand names includes Crown, Strachan, Wiltshire, Grosvenor, Staysharp, and Eterna, among its own brands, as well as distribution agreements for international brands such as Oxo, Chef'n, and Selfix in the United States, Salter in the United Kingdom, Kinox/Kin Hip in Hong Kong, and Trudeau in Canada. Although formerly itself a diver-sified manufacturer, McPherson's now sources its housewares products from manufacturers through its Hong Kong office. McPherson's holds leading positions in many of its markets, such as the hospitality market, where it supplies some 80 percent of all beer mugs in Australia. Printing is the company's largest division, under McPherson's Printing Group, and is Australia's largest commercial printer, leading both the book printing and catalogue and commercial printing segments, with two book printing plants and a third dedicated commercial printing facility. McPherson's also controls a major segment of the country's telephone directory business, with long-term contracts with Telstra to print its white and yellow pages directories. That division, formerly known as William Brooks & Co., was renamed under the McPherson's name in 2003. In that year, McPherson's acquired Cork Asia Pacific for AUD 101 million in order to add a third division, Health and Beauty products, under such brands as Lady Jane and Manicare. Listed on the Australian Stock Exchange, McPherson's Ltd. posted sales of AUD 333 million (US $254 million) in 2004.

Pig Iron Origins in the 19th Century

Thomas McPherson was born in 1822 in Kingussie, in Inverness, Scotland. Like many Scotsmen of the period, McPherson decided to emigrate to Australia to try his luck in the newly established colony. McPherson arrived in Melbourne in 1852. McPherson launched his own business on Collins Street West, acting as a supplier for pig iron to the local foundry industry. The pig iron stock was brought in by trading ships coming to Australia to bring back wool and wheat to the United Kingdom.

McPherson's dealings with foundries led him to develop other trade streams, such as supplying equipment and machinery and parts for workshops, machine tools, steam engines, and the like. By 1860, McPherson's business had evolved into a general hardware wholesaler and retailer. In that year, McPherson renamed his business as Thomas McPherson & Sons.

McPherson continued building the business into the latter half of the century, while becoming a prominent citizen in his own right—becoming an alderman in the 1860s, and even serving a brief stint as mayor in 1870 before going on to become a member of the Australian parliament. The company grew in stature as well, and in 1881, son Hunter McPherson opened the company's first branch in Sydney.

Thomas McPherson died in 1888 and the business was taken over by Hunter McPherson and his brothers. The company continued to operate as a wholesale and retail merchant to the hardware, building, and industrial trade. But the company also began a transition into becoming an industrial company in its own right. Indeed, McPherson's willingness to reinvent itself remained a company hallmark into the 21st century. The company marked this change by reincorporating in 1913 as a proprietary company, McPherson's Pty. Ltd. The company remained based in the state of Victoria, but increasingly began to focus on sales throughout Australia.

By the early years of the 20th century, McPherson's had emerged as leading manufacturer and supplier of metal fasteners, fittings, and components. As such, the company participated in a number of landmark public works projects, including the building of the Transcontinental Railway—the company produced all of the dog spikes needed for the 1,200-mile railroad, completed in 1917, which connected the country's coasts and made possible the formation of the Australian Commonwealth. McPherson's also manufactured the five million rivets needed to build the Sydney Harbor Bridge, a project launched in 1926 and completed in 1932.

McPherson's also became an important contributor to the Australian war effort in World War II, converting much of its production to the manufacture of machine tools. In 1944, the company went public and, with the end of the war, began seeking new directions.

Printing and Housewares in the 1980s

Although McPherson's developed a variety of activities over the next two decades—the company became, for example, the largest manufacturer and distributor of nuts, bolts, and screws in Australia—its interests narrowed more specifically to two fields, printing and tableware, in the 1980s.

McPherson's involvement in printing started back in the 1940s, when it acquired a stake in Maryborough, Victoria-based Hedges & Bell. In 1956, McPherson's acquired full control of Hedges & Bell, which remained the focus of its printing division through the 1970s. In the early 1980s, however, the company began building its print division, buying Dominion Press in 1981. That company, based in Blackburn, also in Victoria, was then merged with Hedges & Bell in 1983. The larger company continued operating under the name Dominion Press Hedges & Bell until 1986, when it changed its name to The Book Printer.

McPherson's continued adding printing business as its focus narrowed. In 1988, the company bought Mulgrave, Victoria's Owen King Printers Pty. Ltd., which then moved to a new printing plant the following year. At the beginning of the next decade, McPherson's boosted its book printing operation again, acquiring Globe Press in 1991. Following that purchase, McPherson's restructured its book and commercial printing division, merging Globe, Owen King, and The Book Printer into a single subsidiary, McPherson's Printing Pty. Ltd. in 1992.

At the same time, McPherson's also had begun to explore other printing areas. In 1982, the company acquired William Brooks & Co. Founded in 1887 as a printer of invitations and similar items, William Brooks began printing telephone directories in the early part of the 19th century.

By 1917, the company had been awarded a significant contract with the Postmaster General's Office to print some of the company's earliest telephone directories. William Brooks maintained that relationship over the course of the century, even as the Postmaster General's telecommunications wing evolved as Telstra. In 1992, William Brooks began a major investment program, building a new state-of-the-art printing plant. Completed in 1994, the new plant was capable of producing the entire run of Telstra directories in just three months. This investment enabled William Brooks to retain its position as Telstra's largest supplier into the 2000s, with a long-term contract to supply 50 percent of Telstra's directories.

New Horizons for a New Century

McPherson's had meanwhile been building another division, more closely related to its longstanding manufacturing wing. In 1980, McPherson's made its first step into developing itself as one of Australia's leading supplier of housewares, tableware, and kitchenware when it purchased the Wiltshire File Company. That company specialized in kitchen knives and cutlery, as well as other cookware, emerging as a leader in there categories in Australia. Two years later, McPherson's added a significant silverware brand, Strachan Silverware.

By the early 1990s, McPherson's began seeking to extend its tableware offerings, and in 1991 the company acquired the Grosvenor and Rodd brands from Mytton Rodd. Other brands in the McPherson's stable by the end of the 1990s included Staysharp, Deco, Ai-de-Chef, Kitchen Class, Richardson, and Gripi, among others. Hit hard by the recession of the early 1990s, and by what some observers considered a lack of direction, McPherson's began a new transformation at mid-decade. Led by new managing director David Allman, the company shed its manufacturing operations and instead fixed its focus on its Printing and Housewares division.

Housewares took on greater focus for McPherson's into the new century. In 1999, the division took a significant step forward with the acquisition of CPS Housewares Pty. Ltd., which boosted McPherson's range of kitchen utensils, as well as kitchen equipment and household cleaning products.

Company Perspectives:

Vision: To be a superior performing and internationally competitive company. Mission: To achieve long-term superior growth in the value of each share and its attendant dividends.

McPherson's Housewares division expanded again the following year, now through the acquisition of Crown Glassware. Among other products, Crown was a major supplier to the Australian and New Zealand hospitality markets, including an 80 percent of the commercial beer glass segment. Crown itself had been established in 1926 by a group of Sydney glassmakers, who originally produced crystal and flint glass. Crown Crystal later merged with Corning in 1961, then split off from Crown Corning and became part of ACI Packaging, becoming known as ACI Crown in 1988.

McPherson's continued to add to its housewares division into the 2000s, notably with the purchase of NBL Business, based in Sydney, in 2003. That company enabled McPherson's to come full circle, as it were, adding a range of hardware products such as the Primeline brand of lawn mower blades and trimmer accessories; Mastertool, a maker of soldering irons and glue guns; and Unibilt, which sold hinges and brackets.

Yet McPherson's also began seeking out new growth opportunities. The company launched a new direction in June 2003 when it purchased Cork Asia Pacific for AUD 101 million. That purchase brought McPherson's into the health and beauty care market for the first time, forming the basis for a new division. The purchase also gave the company a strong logistics and distribution operation, as an added benefit. With nearly 150 years of corporate evolution behind it, McPherson's remained a mainstay in Australia's business community.

Principal Subsidiaries

Domenica Pty. Ltd.; Owen King Holdings Pty. Ltd.; McPherson's Printing Pty. Ltd.; Yevad Products Pty. Ltd.; Wiltshire (NZ) Ltd. (New Zealand); 947413 Ltd.; 718932 Pty. Ltd.; Regent-Sheffield (Canada) Ltd.; McPherson's Housewares Pty. Limited; McPherson's America, Inc.; McPherson's Publishing, Inc. (U.S.); Regent-Sheffield Ltd. (U.S.); McPherson's (Hong Kong) Ltd.; McPherson's CPG Limited (Hong Kong); McPherson's (U.K.) Ltd.; Richardson Sheffield Ltd. (U.K.); V. Sabatier Ltd. (U.K.); Revlect Pty. Ltd.; McPherson's Enterprises Pty. Ltd.

Principal Competitors

Gillette Co.; Wella AG; Kenwood Silver Company Inc.; Union Industries Inc.; BIC S.A.; Fiskars Oy Ab; IMBEL; Lord Precision Industries; Tefal S.A.S.

Key Dates:

1852:: Thomas McPherson, a native of Scotland, emigrates to Australia and sets up business as a merchant for pig iron in Melbourne.
1860:: McPherson incorporates the company as McPherson & Sons.
1882:: McPherson's son Hunter opens a branch in Sydney.
1913:: The company incorporates as McPherson's Pty. Ltd.
1944:: McPherson's goes public and acquires a stake in Bell & Hedges printing company.
1956:: The company acquires full control of Bell & Hedges.
1980:: The company acquires Wiltshire File Company as part of its entry into the housewares sector.
1981:: The company acquires Dominion Press.
1982:: The company acquires William Brooks & Co., telephone directory printer; the Strachan tableware brand is acquired.
1983:: Dominion Press and Bell & Hedges are merged.
1986:: Dominion Press Bell & Hedges changes its name to The Bell Printer.
1988:: The company acquires Owen King Printers Pty. Ltd.
1991:: The company acquires Globe Press, based in Brunswick; the Grosvenor and Rodd tableware brands are acquired from Mytton Rodd.
1992:: Globe, Owen King, and Dominion are merged to form McPherson's Printing Pty. Ltd.
1999:: The company acquires CPS Housewares Pty. Ltd.
2000:: Crown Glassware is acquired.
2003:: William Brooks is merged into McPherson's Printing Group; the company acquires NBL Business and Cork Asia Pacific.