Whatman plc

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Whatman plc

Whatman House
St Leonard’s Road
20/20 Maidstone
Kent ME16 OLS
United Kingdom
Telephone: ( + 44) 1622 676670
Fax: ( + 44) 1622 677011
Web site: http://www.whatman.co.uk

Public Company Incorporated: 1740
Employees: 1,064
Sales: £98.66 million ($147.3 million)(2000)
Stock Exchanges: London
Ticker Symbol: WHM
NAIC: 541710 Research and Development in the Physical, Engineering, and Life Sciences

Formerly a renowned maker of fine papers, Whatman pic has consistently reinvented itself to meet the emerging needs of its times. The Whatman pic entering the 21st century has redirected itself to become a specialist in separation and filtration media for the healthcare, life science, and biomedical research markets, with a particular emphasis on DNA filtration technologies. As part of its reorientation, Whatman sold off its industrial filtration arm—which represented one-third of its revenues—in 2000 and has been actively expanding its biomedical and DNA technology, notably through acquisitions such as the purchase of the United States’ HemaSure Inc. and the DNA apparatus product line from Invitrogen (formerly known as Life Technologies Inc.), both in 2001. Despite the company’s transformation, paper-making remains at the heart of the company’s products: Whatman’s research efforts have developed a number of technologies for the production of multi-layer and chemically active papers used in such applications as paper chromatography, diagnostic test kits, and DNA storage. The company also produces a range of filtration products for the healthcare and laboratory and biomedical markets, including microfiltration products, nucleopore membranes, and other filtration products and systems. More than half of Whatman’s sales come from the United States and Canada; Europe, including the United Kingdom, is the company’s second-largest market, generating some 33 percent of its sales, while the Asia-Pacific region accounts for 12 percent of sales. The company posted revenues of nearly £100 million in 2000. David Smith, chief architect of the company’s transformation at the end of the 1990s, was replaced as CEO by Tim Coombs at the end of 2001.

Paper Making Innovator in the 18th Century

James Whatman was born into a family of tanners based around Kent, England in 1907. Whatman learned the tanners trade, but, as the tanning process produced a gelatin by-product used by paper makers, Whatman was in close contact with paper makers, and notably the Harris family. In 1733, Whatman built a paper mill for his friend, Richard Harris. Harris then began building a new, larger mill, Turkey Mill, near Maidstone. When Harris died in 1739, Whatman married his widow, and took over paper-making operations at Turkey Mill.

Whatman quickly distinguished himself a maker of quality paper. As with most of the European paper industry, Whatman’s early production was of so-called “laid” paper, which had a somewhat coarse feature. Printer John Baskerville approached Whatman with the request for a paper with a finer finish in order to show off his new serif font. Whatman complied, developing a new wire mesh to produce what become known as “wove” paper (because it was similar in appearance to woven linen). Whatman is commonly credited with producing the first wove paper in 1756, and Baskerville became the first to print on the new paper type in 1757. The technique eventually became a standard in the paper-making industry, representing some 99 percent of all paper.

The Whatman paper—the Whatman name was to become synonymous with wove paper—retained a monopoly for some 30 years on the technique, and was instrumental in enabling the British papermaking industry to compete against larger rivals in France and Holland. Yet Whatman himself did not live to see the results of his innovation. Whatman died in 1759, stipulating that his business be turned over to his son, James II, then 17 years old, when the younger Whatman reached 23 years of age. By the time of Whatman’s death, Turkey Mill had become England’s largest paper mill.

James Whatman II proved a ready businessman, however, and by the age of 21 his mother had turned the family business over to him. The younger Whatman inherited his father’s gift for innovation as well. In 1765, Whatman discovered a means of whitening paper by adding laundry blue to the typically yellowed paper pulp. The resulting paper and further improvements in the wove process helped the Whatman name become world-renowned, especially among the world’s watercolor artists, but also among such personalities as Napoleon, who used Whatman paper to compose his will in 1821. Whatman success led him to expand, building a second mill and producing, in addition to wove paper, marbled paper, and paper for copper plate engravings.

Whatman, who also had a son named James, began instead to groom protegé William Balston, who had entered the Whatman household as a schoolboy, to take over his business. When Whatman suffered a stroke in 1790, Balton, then 31 years old, took over running the family’s paper mills. In 1794, however, Whatman sold off his business for £20,000. Balston remained a partner in the business, however. James Whatman II died in 1798.

The partnership dissolved in 1805, and Balston struck out on his own. While his partners kept Turkey Mill, and continued production of Whatman-branded watercolor papers until the mid-nineteenth century, Balston built his own mill, the Springfield Mill, nearby. Balston had inherited his mentor’s gift for innovation. Despite its location on the River Medway, the Springfield Mill became the first in the world to install the steam-powered Fourdrinier machine. That machine remained in operation on the site for more than 90 years.

Balston’s interest in chemistry led him to establish a small research laboratory on the Springfield Mill site, and the Balston company quickly became one of the country’s largest. By 1835, Balston’s operation had grown to ten vats and employed more than 100 people. Balston himself became a prominent personality in British paper-making world. By the 1850s, Balston was joined by two of his ten children, sons William and Richard. In 1959, the Balstons bought out the original Whatman partners and acquired all rights to the use of the Whatman name. By then, Whatman was often listed in dictionaries and reference books as a generic term for wove paper.

William and Richard Balston took over the paper company’s operation after their father’s death and changed the company’s name to W&R Balston in 1861. By then the company had grown to more than 250 employees. In 1862, a fire destroyed nearly all of the Springfield Mill, sparing only the Fourdrinier steam engine. The Balston brothers quickly rebuilt the business and were back in operations after only three months. The Balstons continued to expand, and by the end of the century the Springfield site operated 18 vats, while the company had built a second mill, with an additional four vats, nearby. By then, Richard Balston had become the sole leader of the family business.

Following the Trends in the 20th Century

W&R Balston remained true to the Whatman tradition of innovation as it moved into the twentieth century. The outbreak of World War I gave the company a new opportunity—and a new direction. Until then, much of the filter papers used by the British arms and steel industries had been imported from Germany. With the two countries in conflict, the British government sought a new source for the important material and approached W&R Balston.

The company quickly realized that the coming years were to see a huge increase in the demand for paper-based filtration products, not only for industrial applications but for the scientific community as well. The company turned more and more of its production and research efforts toward developing filter papers for the health care, research, schools, and other industries. With much of trade in continental Europe disrupted by the war years, W&R Balston also began seeking out new markets, and particularly North America. In 1914, the company contracted with fellow British firm Harry Reeve Angel, which had opened an office in New York, to serve as its North American sales agent.

W&R Balston was hard hit by the depression years, and by the 1930s was forced to cut back its production to just three days per week during a period lasting some five years. That decade nonetheless saw vast advances in scientific and medical research, which in turn stepped up demand for Balston’s filter paper products. The company’s flair for innovation made history again in 1944 when its Whatman No. 1 filter paper was used in experiments that led to the development of paper chromatography—a ground-breaking technique for separating compounds that was to revolutionize the medical research community. W&R Balston’s role in that development encouraged the company to expand its production in that field and the company quickly became one of the world’s leading makers of analytical papers.

By the 1950s, W&R Balston’s production had turned almost entirely toward its filter and analytical paper production. The company began phasing out its remaining fine quality papers production. In 1955, it ended its line of handmade watercolor paper, and, in 1962, shut down production of mold-made papers as well. The company meanwhile expanded its range of filter products beyond paper to incorporate the variety of new materials then being produced, such as glass and quartz microfibers. The company’s filters became as successful as its fine papers had been, and by the end of the 1960s the Whatman brand name was once again known throughout the world.

Company Perspectives:

Whatman is an international leader in separations technology. Focused on life sciences, we provide solutions to the laboratory and healthcare markets, including DNA storage, isolation and purification. Our enviable brand strength, built up over 250 years, coupled with our technology portfolio, gives us the platform to deliver our true potential.

Facing new economic challenges in the 1970s, as the world slumped into a recession following the Arab Oil Embargo of 1973, Whatman turned toward long-time North American sales agent and publicly listed Reeve Angel International, which by then had built up its own successful filtration materials business. The two companies merged, becoming Whatman Reeve Angel Ltd. The new, larger company retained the former Reeve Angel’s listing on the London stock exchange.

New Directions in the 21st Century

The company continued to market under both Whatman and Balston brand names. Yet it was the Whatman name that proved the most durable. The company expanded quickly during the 1980s, moving into new international markets. In 1984, the company created subsidiaries in France and Singapore. Elsewhere, the company expanded its industrial filters operations to the point where it was said that, in some countries, Whatman had become considered a synonym for certain filter types. The company’s industrial park expanded to include manufacturing sites in the United Kingdom, the United States, Germany, and elsewhere. Whatman Reeve Angel also flirted with a return to paper production, reintroducing Whatman’s mold-made paper in 1982.

The company restructured its operations in 1990 and renamed itself Whatman Plc. The decade to come was to see the company transform itself once again. Whatman’s filtration products were now at the forefront of emerging technologies in the health care and scientific research fields. More and more emphasis was being placed, on the one hand, on sophisticated blood filtration techniques—particularly given the AIDS epidemic of the 1980s and 1990s—and, on the other, on the rapid and ongoing breakthroughs in DNA and genetic technologies. While the company’s industrial filtration business continued to play a prominent role on its books—accounting for as much as one-third of the company’s revenues—Whatman’s interests increasingly turned toward the new technologies.

The company began making a series of acquisitions boosting its strengths in analytical filtration and separation technologies, including the 1993 purchase of Belgium’s Cyclopore, a filter membrane specialist, and the 1997 acquisition of Polyfiltronics, based in the United States. Leading the company’s charge was David Smith, who joined Whatman in 1994 and became its CEO. In 1997, Smith led Whatman on a small but significant acquisition, that of Fitzco, a company based in the United States that had patented a process for storing DNA on paper.

The match seemed a perfect meeting of Whatman’s historical background as a paper innovator and its new role as a research industry specialist. Yet when Whatman attempted to sell the paper based on Fitzco’s research, it met with market resistance: while storing DNA on paper eliminated the costly need to maintain stocks of refrigerated blood samples, analyzing the paper-based DNA was extremely difficult.

Whatman once again revealed its heritage for innovation. After two years of development, the company brought out a new and revolutionary product. By adapting the composition of the paper itself, the company had found a way to separate the stored DNA from the paper. The launch of the product heralded the beginning of a new era for Whatman as a leading filtrations and separations technology company. In that year, the company boosted its DNA-oriented business with the acquisition of DNA filtration specialist Cambridge Molecular Technologies, paying £4 million.

The rise of Whatman’s high-tech genetics component led it to restructure again in 2000. As part of that restructuring the company sold off its industrial filtration business—which accounted for one-third of the company’s revenues—to Parker Hannifin, telling the Financial Times: “We had to bite the bullet and sell [the industrial unit]. For a small company that’s quite a brave move—to sell a third of its business.” Soon after, the company set up a strategic marketing alliance with U.S.-based HemaSure, a blood filtration specialist, to market Whatman’s DNA filtration, purification, storage, and related technology for blood-transfusion and blood bank applications in the United States. The companies were also collaborating on an improved leucocyte blood filter product.

Key Dates:

1733:: James Whatman sets up a paper mill.
1756:: Whatman is credited with inventing “wove“paper-making process.
1765:: Whatman son, James II, who took over after his father’s death, invents paper whitening process using laundry blue.
1790:: William Balston takes over mill operations after Whatman has a stroke.
1805:: Balston establishes a new mill, which is the first paper mill to be powered by a steam engine.
1859:: Balston and sons acquire full rights to Whatman brand name
1861:: Balston’s sons William and Richard Balston take over mill and company is renamed W&R Balston.
1914:: Balston begins supply filter paper to British military and steel industry, causing company to phase out papermaking to focus on filters for scientific and industrial applications.
1955:: Balston ends production of watercolor paper.
1974:: W&R Balston merges with Angel Reeve International to form Whatman Angel Reeve, listing on the London Stock Exchange.
1984:: The company establishes subsidiaries in France and Singapore as part of international expansion during the 1980s.
1990:: The company changes its name to Whatman PLC and restructures operations.
1993:: Whatman acquires Cyclopore, based in Belgium, as the company begins focus on filtration and purification technologies for health care research and related industries
1999:: Whatman launches improved paper-based DNA storage and retrieval product and acquires DNA filtration specialist Cambridge Molecular Technologies, paying £4 million.
2002:: Whatman begins consolidation of manufacturing sites, with plans to shut down eight plants by 2003.

Whatman’s alliance with HemaSure proved merely a step toward acquiring the Massachusetts-based company the following year. Despite shareholder protests—because HemaSure was hamstrung by a patent lawsuit and was losing money—the acquisition went through for a total price of $25 million. The acquisition, proposed in February 2001, was completed by May of that year. Less controversial for the company was its agreement to purchase the DNA Apparatus Product Line from In-vitrogen Corporation (formerly Life Technologies Inc.) for $1.5 million. That acquisition was added to Whatman’s Germany-based Biometra molecular biology subsidiary.

Whatman’s newest transformation had not gone as smoothly as the company had hoped, however. By September 2001, the company was being criticized for what some considered a “botched” reorganization. Hit hard by the worldwide economic slowdown of that year, and particularly in its key U.S. market, which had come to account for 53 percent of company revenues by 2000, Whatman was forced to issue a profits warning. The fallout from the reorganization came to bear on CEO David Smith, who tendered his resignation and was replaced as CEO by Tim Coombs.

Coombs immediately led Whatman on a strategic review of its business. In December 2001, the company enacted a reorganization of its business structure, replacing its formerly separated business units of Laboratory, Healthcare Components, Process Filtration, and BioScience with a single unified structure. The company also announced a consolidation of its manufacturing park, including the shutting down of eight of its manufacturing facilities by 2003. Upon completion, the company expected to have just four main production facilities and four specialized production facilities. These moves were expected to begin generating extra profits by the end of 2002. Meanwhile, the strategic review included a commitment to the company’s shift toward DNA extraction, purification and storage, along with the creation of a new division, Filtration and Separations Technology, which was to focus on such biotechnology areas as multiwells and proteomics. Whatman had come a long way from its origins as a papermaker, yet, after more than 250 years, continued its founder’s flair for innovation.

Principal Subsidiaries

Aquilo Gas Separations BV (Netherlands); Arbor Technologies Inc. (United States); Biometra Biomedizinische Analytik GmbH (Germany); Cambridge Molecular Technologies Limited; Fitzco Inc. (57%; United States); Gerbermembrane GmbH (Germany); Polyfiltronics Inc. (United States); Wex Filtertechnik GmbH (Germany); Whatman Asia Pacific Pte Limited (Singapore); Whatman BioScience Inc. (United States); Whatman Bioscience Ltd; Whatman Canada Limited; Whatman Finance Limited (Ireland); Whatman GmbH (Germany); Whatman Inc. (United States); Whatman International Limited; Whatman Japan KK; Whatman Nucleopore Canada Limited; Whatman Reeve Angel Inc. (United States); Whatman SA (Belgium); Whatman Sari (France).

Principal Competitors

Qiagen Corporation; APBiotech Inc.; Beckman Coulter, Inc.; Bio-Rad Laboratories, Inc.; Celltech Plc; Cepheid; Ciphergen Biosystems, Inc.; Genometrix Incorporated; Genset S.A.; Innogenetics S.A.; Invitrogen Corporation; Neurosearch AB; Millipore Corporation; Packard BioScience Company; Stratagene Holding Corporation; Visible Genetics Inc.