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CPAC evolving during chemical photo slump

Development of an historic brand and a keen eye toward new technologies keeps Leicester company in the black

By Mark Gillespie
Livingston County News

July 29, 2004


When photography industry leader Kodak began hiring electronic engineers instead of chemical engineers in the early 1990s, the board of the Leicester-based CPAC, Inc. took it as a sign of the times.

    According to company president and founder Thomas Hendrickson, the digital revolution was on the horizon and CPAC needed to change or be left behind.
    "We've been an historically strong manufacturer of chemical products, particularly imaging chemicals," said Hendrickson. "We forsaw the potential in digital imaging to eliminate chemicals by the year 2010 or 2015."
    Hendrickson founded CPAC in 1969 under the name "Computerized Pollution Abatement Corporation."
    Photographic labs realized added revenue when they used CPAC's equipment to extract silver from depleted darkroom chemicals.
    On the cusp of the environmental movement, the company marketed its products as earth-friendly, while helping broker silver recovered by its customers.
    In the 1980s, after a series of acquisitions in the U.S. and Europe, CPAC began manufacturing chemicals for its own equipment, adding an important revenue stream from existing customers, said Hendrickson.
    But in the 1990s, demand for CPAC imaging products in the medical, graphic arts and photographic industries shrank shrunk the company¹s traditional customer base.
    "There has been a transition away from large labs," said Hendrickson. "When we started, there must have been over 500 major wholesale photofinishers. Today, there's less than 75, most owned by major companies like Kodak."
    The company continues to be a strong player in the imaging business, especially in Africa, Asia and Latin America, where photo development technology still requires a strong supply of chemicals.
    Meanwhile, many of the company's predictions about the chemical photography market have come true.
    Kodak continues a three-year decline in profits, slashing its annual dividend last year by 72 percent to pay for a transition away from its conventional film business. Sales in the company's photography business fell by $1.01 billion while digital camera sales rose 117 percent.
    CPAC recognizes a window of opportunity in providing user-friendly chemical supplies to "mini-labs" — large automated print processors popular at supermarkets and department stores, said Hendrickson.
    CPAC has begun to package chemical supplies in a convenient cartridge form popular with modern manufacturers.
    Digital printing remains a growth market for CPAC. While film camera sales are declining, chemical-based paper printers still yield much higher quality than inkjet printers, said Hendrickson.
    The company's equipment division has realized some success in finding niche medical markets — such as PerfectView X-ray and mammography viewers — and Steri-Dent dentist office equipment, which produces sterilizers and the small vacuum pumps that help whisk away patient's saliva.
    The boldest move taken by CPAC was in 1994, when the company bought the Fuller Brush Company of Great Bend, Kansas.
    In the 1930s and 1940s, door-to-door Fuller Brush salesmen were as iconic as those who sold Singer sewing machines or the Encyclopedia Britannica.
    "We have the right indicators that the Fuller Brush name is still strong. We see tremendous opportunities in the sale of shampoos, floor waxes and other chemical products for as far as we see into the future," said Hendrickson.
    In fact, the brand was once so popular that two movies, The Fuller Brush Man (1948) and The Fuller Brush Woman (1950) starred Red Skelton and Lucille Ball as salespeople.
    While sales in CPAC's imaging segment has declined — from $46 million in 1995 to $38 million in 2004, the Fuller Brush buyout has been a lifering.
    Fuller Brush sales — including its line of Stanley Home Products cleaning supplies — have grown from $12 million in 1995 to $52 million this year. Fuller Brush now accounts for 60- percent of CPAC's total sales.
    While Fuller Brush salespeople still knock on doors nationwide, the company has also expanded into Internet sales, mail order catalogs, and direct-marketing on the QVC cable shopping network.
    "We're trying capitalize on nostalgia and the fact that we are a wholly U.S. manufactured, high-quality product," Hendrickson said.
    CPAC celebrated its 35th anniversary in March. Fuller Brush turns 100 in 2006.




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