Neue Westfälische newspaper, 30 May 2008 | Strong partners in the region

How Peter-Lacke sets up factories in three continents, safeguarding German jobs.

From an old village schoolhouse, a medium-sized paints manufacturer from the Herford district opens up new markets all over the world. Peter-Lacke follows its customers to new sites, gains buyers in this way and becomes a global player with production sites in Europe, Asia and America. In the late 90s, the family-run company with a hundred employees was forced to change its strategy. Up to then Peter-Lacke had mainly supplied the furniture industry with high-gloss paints.

Due to the growing demand for alternative (film) coatings and the disappearance of several large manufacturers this market was declining. The company based in Hiddenhausen thus developed into a specialist mainly catering to the automotive, household appliances and electronics market.

Today, there is hardly any household in Germany without objects coated with Peter-Lacke paints.
Whether spectacles or coffee makers, TVs or cupboards, microwaves or ski bindings: they all gleam with paints from Hiddenhausen. At the beginning, Germany and its neighbours remained the core market. But when more and more manufacturing companies relocated their production abroad, the Hiddenhausen company was once again placed on the spot:
If it wanted to succeed as a gloss supplier in the automotive, electronics or household appliances sector in the long run it would have to move itself. "Remote markets like the Asian market cannot be supplied from Germany in view of transport times and local barriers", Peter realised.

On the other hand, he saw a great potential for his special paints – mainly in countries where local manufacturers did not yet exist. "German quality products are sought-after more than ever before", is his experience. This is why, after due consideration, he decided in favour of "globalisation“.

It all began with Shanghai. Here, Peter-Lacke was swept along by the breathtaking economic dynamics. Today, one hundred employees generate over a quarter of the turnover of about € 40 million.
From here Peter also managed to become listed as a supplier by Japanese car manufacturers - an extraordinary success for a German producer. Success fires the imagination: Peter-Lacke sites were set up in Malaysia, Poland, Hungary, Russia, Mexico and India.

Andreas Peter distinguishes six development phases of the expansion:

• At first you supply customers from Germany.
• If sustainable marketing potential is on the horizon, you set up a showroom on-site and provide for a permanent contact.
• The next step is the foundation of a sales company which already operates its own warehouse on-site.
• A local laboratory for mixing colour samples and experimental "snap decisions" is a good idea. This way the foundations of a service centre are laid.
• The next stage is the establishment of a local production site which initially processes primary products supplied from Germany into ready-to-use paints.
• In the final phase the entire production takes place in the local factory – the necessary raw materials are also purchased on-site.

Currently Peter is operating such factories in Poland, Malaysia and Shanghai. In Hungary, a factory is presently being set up with an investment of over € 3 million - with the support of the European Union.

The other sites have not come as far yet. There are two sales companies in Russia and Mexico, and a representation office has just been established in India. Export to Turkey, currently a particularly interesting market, is still controlled from Hiddenhausen.
Peter followed some self-formulated rules when selecting the sites:

• They must be low cost countries.
• There must be enough industrial customers on site.
• There must be a know-how advantage over local manufacturers.

The parent plant in Hiddenhausen above all supplies the German market. It also provides the sites abroad with formulations and part products. Moreover, the head office is located here. "We are also preparing the establishment of a holding.“
By 2011, over € 7 million are to be invested in a new shop floor for water-based paints, break rooms, offices and a new laboratory at the parent plant.

"We will probably also supply the strongly growing Russian market from Hiddenhausen in the long term." The second focus of investment is Shanghai. Peter is just setting up a new plant with a laboratory for € 6 million. "There we will also increasingly experiment with Japanese raw materials." Peter-Lacke proves that outsourcing of production abroad does not cost jobs but actually safeguards jobs (and of course the existence of the company as such). German expertise is being sought after more than ever: "The only real obstacle to further growth“, says CEO Andreas Peter, "is the current lack of qualified experts".