In a culture where bigger is generally considered better, you would imagine rapid expansion to be the first thing on the mind of a corporate president. For Richard Loomis, president and CEO of WM Barr & Co., fiscal growth is not the center of attention. Instead, the employee-owned company focuses on safety and cost efficiency.

The company began in 1945 when founder William Barr invented the first non-flammable paint remover, Klean-Strip. Years later, Klean-Strip still holds a dominant position in the heavy-duty solvent market. The evolution of Klean-Strip to Citri-Strip, an orange-scented cleaner, diversified the company’s product mix and moved it one step further in its mission.

“We see two different breaks in the user market for removers,” said Loomis. “One is people who want instantaneous results. That is our Klean-Strip product. The other group still wants a very good job done, but is concerned about a more natural, safer alternative. That’s the Citri-Strip product.”

Today, the company’s biggest challenge is the price of gas. The price of the raw materials needed to make the company’s heavy-duty cleaning products is based on wholesale gas prices. Recent price increases have meant a need for the company to pass along those costs to consumers.

“We’ve done a number of things, including price increases and finding alternative strains of materials, and what we’re doing right now is setting index pricing for our customers,” Loomis said.

Each month, the price customers pay is indexed against the price the company is paying for materials. Loomis said that although the company could be expanding at a faster rate, it’s more important right now to focus on key cost drivers. Right now, that driver is oil.

“We’re mainly focused internally—developing alternatives to manage oil prices—but we’re still expanding quite nicely,” he said.

Where the heart is
In 2001, Loomis took over as president and CEO. At the time, his challenge was to redistribute decisionmaking power. Because he was not at the company when it restructured as an ESOP in 1996, he had a lot of work to do.

“When I arrived, the company had a ‘wait and tell me what to do’ culture,” said Loomis. “I like to make sure our employees have the ability to make the decisions because they’re the closest to the business. They know better than anyone else.”

During the first three years of his presidency, Loomis realigned the purchasing, manufacturing, and scheduling departments so that each person had the correct scope of responsibility. He developed annual planning meetings so each employee would be judged and compensated for achieving his/her goals throughout the year.

“One of the things we wanted to be aggressive about was how we build our business,” he said. “For the sales guys, we gave them goals that specifically involved the kinds of businesses and returns we were interested in. If they could get business over a certain hurdle rate, that business was theirs. They were then allowed to make decisions in the field, rather than bringing it back to the office.”

Loomis believes one of the main reasons for the company’s success is that its 300 employees are more motivated, involved, and knowledgeable than other companies he’s worked with. “Every employee has a vested interest, not just in his or her paycheck for this month, but in how the company is improving the stock price year after year,” he said.

Changing color
From its humble beginnings with one product focused on the home-improvement industry, WM Barr & Co. has expanded its solvents for use in both packaging and automotive. Technology is important to this $200-million company because new products are still being developed.

“We just launched a patented product and paint remover that changes color as it penetrates into the layers of paint,” he said of the home improvement portion of the business. “It gives you a signal when it’s time to remove it for the best results.”

Future expansion will come from acquisitions such as the company’s recent purchase of Damprid, a market leader in moisture and odor absorption throughout the US. Despite his company’s position as one of the only organizations in the industry able to supply to large retailers such as Wal-Mart, Loews, and ACE, Loomis says his present focus remains in North America.

“We have a lot of opportunity here in North America with all of our divisions to expand, improve, and provide some new products coming into this market,” he said. “Overseas is interesting, but it’s not the area of concentration for us right now.”