O.C.’s Fluidmaster Is Flush With Success : Competition: With 65% of the U.S. market, the maker of water inlet and valve replacements is poised for serious foreign expansion.
The flush toilets of the world share a common ancestry that can be traced to English inventors of the 1800s. Exactly how they work today varies from nation to nation, but they all still use that same basic technology involving a pair of valves.
That gives Fluidmaster, an Anaheim company that is the top U.S. maker of water inlet and flush valve replacements, the potential to become a plumbing superpower. The 36-year-old company already controls 65% of the domestic market and is now poised for a serious international expansion.
Fluidmaster’s foreign sales began in Canada a decade ago. In 1988, the company reached south into Mexico, Central and South America with its one-kind-fits-all valve kits, and it has since added nearly a dozen European and Asian markets.
International sales accounted for just 5% of privately owned Fluidmaster’s $60 million in 1993 revenue, but they are growing rapidly. Robert Connell, vice president for marketing and sales, said he expects foreign sales to bring in about 9% of the company’s 1994 revenue, projected at $75 million, and to make up as much as 30% of the total by the end of the decade.
Fluidmaster, which will make about 13 million valve kits this year, credits its success to automation. The assembly plant that shares space with Fluidmaster’s offices near the Riverside Freeway in Anaheim operates three shifts a day with an average of just 40 workers each shift. The rest of the people on the company’s payroll of 200--up from 60 in 1985--are in sales, marketing and administration.
“They say, ‘Come to China, we have cheap labor,’ but they really can’t compete,” Connell said, with the fully automated Fluidmaster factory.
“We have one person who operates a 16-cavity mold” that produces 16 plastic valve bodies at a time, Connell said. “Compare that to the guy in China or Mexico who has one person operating a one-cavity mold. Our costs are substantially less.”
Even packaging is automated, with a hypersensitive scale at the end of the assembly line that rejects any of the machine-packed cartons that have parts missing. It can tell if a washer weighing less than a tenth of an ounce has been omitted.
So, for the foreseeable future, Fluidmaster valves will continue to sport a “Made in the U.S.A.” label--no matter what the language on the packaging and the instruction sheet.
Language brings its own special challenge for exporters. Fluidmaster’s biggest contretemps occurred in its early days of packaging its product for sale in Spain. “We tried to have our instructions translated into Spanish by someone who worked here,” Connell said, “but he was from Mexico, and there are differences.”
The Spanish distributor called and asked why the instructions called for the customer to attach “tennis shoes” at a certain point. The Mexican wording referred to a small plastic washer--but it didn’t translate to that in Spain.
Even in English there are cultural differences. Fluidmaster’s package in American English says the kit fits most toilet tanks, but new packages had to be printed for Britain, where the word “tank” is reserved for the military vehicle. The British box says the kit fits most “toilet cisterns.”
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Some problems are more serious.
In Japan, where Fluidmaster has spent years negotiating, a plumbing fixtures council requires all threaded water inlet pipes on toilet valves to be made of a special type of brass that, until now, was made only in Japan.
“Now we’ve found an American company that will make the brass” to Japanese specifications, Connell said. Fluidmaster expects to start marketing in Japan next year.
Import duties are a bigger blockade than local codes, he said.
The company sells in China only to Western-style hotels because it cannot compete in a broader market because of a duty of nearly 60% on consumer goods. It doesn’t sell at all in India, where it would have to pay a 90% duty.
In Mexico, which had a duty on plumbing equipment before the implementation of the North American Free Trade Agreement, sales were slow for years.
“We were at a 25% disadvantage from the word ‘go,’ ” Connell said.
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NAFTA abolished the tariff this year, and Fluidmaster adjusted its price to reflect the 25% saving. For the first seven months of 1994, Connell said, Fluidmaster’s sales in Mexico are up 63%.
“Give us a level playing field,” Connell said, “and we can compete anywhere.”
To that end, Fluidmaster is not only boosting marketing efforts in countries where it already has a presence, it is also moving into new areas. Sales in Germany, where special recyclable packaging is required, are slated by begin late in 1995 or early in 1996.
Beyond that, Connell said, “there’s always Eastern Europe. There are a lot of toilets there.”
There still are stumbling blocks.
“One of the most important lessons we have learned,” Connell said, “is that you shouldn’t expect your values to prevail when you walk into someone else’s living room.”
Sales meetings that would be short and to the point in the United States, for instance, proceed at a much slower pace in some countries. And Fluidmaster changed the color of its standard gray and black plastic product to adapt to buyers’ tastes in Europe, where plumbing supplies usually come in blue and white.
Fluidmaster has learned enough about the politics of protectionism and the oddities of plumbing and marketing overseas, Connell said, to mount a serious expansion.
“The secret to success, in addition to having a good product to sell,” he said, “is to get the right distributor.”
Sales directors of U.S. companies who are shopping overseas for distributors typically feel most comfortable with people whose English is impeccable, Connell said.
“But I’d rather have to deal through an interpreter,” he said, “and have a distributor who can talk to the store owners than have a distributor I can go out to dinner with and then find out he can’t sell because he doesn’t have the language and cultural background.”
Global Success Fluidmaster, an Anaheim company that makes toilet flush valve replacements, is steadily expanding into foreign markets. Locations entered and market share now:
Location Date entered Market share Canada 1984 40% Mexico 1988 20 Central America 1988 10 South America 1988 10 United Kingdom 1991 10 Australia, New Zealand 1991 50 Italy 1991 10 Turkey 1991 30 Sweden 1991 25 France 1993 1 Taiwan 1993 * Belgium 1994 * Japan 1995** n/a Germany 1995-96** n/a
* Less than 1% ** Proposed Source: Fluidmaster; Researched by JANICE L. JONES/Los Angeles Times
