If you’ve been on a plane, driven a car or are reading this through a pair of glasses, you could be indirectly familiar with Anaheim’s SDC Technologies Inc.
SDC makes chemical coatings that cover acrylic, plastic and glass to protect from scratching, fogging, ultraviolet rays or to add tints or a splash of color.
The company’s products are ubiquitous yet often invisible. SDC’s coatings are found everywhere from designer sunglasses and cars to city buses and “bandit barriers” inside banks.
SDC’s CrystalCoat probably is in your home, too. The coating protects against germs and smudges on stainless steel kitchen and bathroom appliances.
More than 70% of SDC’s sales,estimated by the Business Journal at $20 million to $30 million yearly,come from glasses of some sort: prescription, safety, goggles.
The company has 30% of the market for coatings for glasses and related products, according to Chief Executive William Gregg.
Rivals include General Electric Co. and Pittsburgh chemical maker PPG Industries Inc.
SDC sells to nearly every major lens maker, Gregg said.
More than 90% of the glasses at a Sunglass Hut store have SDC coatings, he said.
“Our claim to fame is to take this technology and make it commercial,” Gregg said.
Early Days
SDC started as a venture of British glass maker Pilkington PLC,now part of Japan’s Nippon Sheet Glass Co.,and Dow Corning Corp. in 1986. The venture was a way to take chemical coatings from Dow and work them into the glass for cockpit and other control gauges from Pilkington.
In 2004, Gregg led a management buyout of the business backed by Compass Group Management LLC, a private equity firm with offices in Westport, Conn., and Laguna Hills.
Gregg and managers Frank Bassoff and Mark Sollberger own the rest of the company.
SDC stood to do better on its own, Compass Chief Executive Joseph Massoud said.
“We find that that’s a good situation for us,” he said. “These huge global companies have these gems of businesses. But they are so small to their overall business that they don’t pursue them. We thought that separating it would be a huge positive.”
SDC had longtime customers but wasn’t getting much in the way of investment from Pilkington and Dow, Massoud said.
Compass also liked Gregg and the other managers, Massoud said.
“We believe these guys are very passionate about their business and very focused,” he said.
Compass, two years into its SDC investment, has no plans to sell or take the company public now, Massoud said.
The firm typically holds its investments for up to a decade, he said. Compass hopes to see SDC acquire other companies and add senior executives to run the expanded company.
SDC has a quirk. The company is run on a set of values that are spelled out for all workers on something akin to a credit card (coated, of course).
The rules aren’t above cliche,”boundary-less thinking” and having fun. But they’re not what you might expect from a chemical company.
The values help get and retain good people, said Gregg, who prides himself on being a good judge of character.
“We very rarely have people leave the company,” he said. “We work hard at having the right people in the game and rewarding them for that.”
The Brea native has a way of getting workers to express themselves. He calls it the “dream wall.”
Each of SDC’s 50 workers, including the 32 in Anaheim,from chemists to administrators,creates a collage depicting their goals and dreams with personal flair.
The collages are framed and displayed in the hallways of SDC’s offices and plants. Some feature aspirations for vacation homes and lots of cash. Others play up the workers’ families, beliefs and hobbies.
“It’s all about what lights you up,” Gregg said.
Surfboards and Espresso
Gregg, 53, is a typical laid-back Orange County executive. He’s tie-less. Surfboards,one with orange flames,hang on his office walls. There’s also a signed poster of “Endless Summer.”
He’s really attached to his high-tech espresso maker.
“I have to have one of these every day,” he said, pointing to a tiny glass cup under a sleek one-touch machine.
“This will be my next life, as a Starbucks barista,” he said.
Gregg, a California State University, Fullerton, grad who once aspired to be a marine biologist, loves the ocean and likes to paint watercolors to wind down from work.
“I’ve grown up around the beaches all the time,” Gregg said.
Gregg lives with his wife in Newport Coast.
He’s stayed true to his North County roots. He’s an advisory board member at Cal State Fullerton’s business school.
Gregg, who became SDC’s president in 1994, said he never expected to be heading a chemical company.
“Hey, I don’t have a degree in chemistry, and I’m in charge of a chemical company,” he joked.
Workers in Hawaiian shirts helped Gregg celebrate his 20th year at the company last month,with goofy video clips and a roast.
It’s not all fun and games at SDC.
“The people have a lot of fun, but they are constantly driven,” Gregg said.
The company plans to hire another six chemists and technical support workers at the Anaheim site, according to Gregg.
The company has plans to grow by acquiring one or two businesses in the specialty chemicals and coatings industry in the next few years, Gregg said.
In 2005, SDC bought all of coating maker Nippon ARC Co., a onetime venture of Nippon Sheet Glass and SDC.
SDC does about 30% of its manufacturing in Japan with plans to expand into China.
Research and development is key to competing with GE and PPG, he said.
SDC holds more than 75 patents.
“What separates us is that we have a very strong (intellectual property) portfolio,” Gregg said.
SDC is going after a new market: coatings for screens and casings on cell phones, digital assistants and music players.
Gregg recently hired a marketing executive to go after consumer electronics makers.
The company doesn’t “have to be that big to make a lot of money,” Gregg said.
Costs aren’t high at its 12,000-square-foot plant off State College Boulevard, he said.
“Our overhead is pretty average,our biggest expense is people,” Gregg said.
The company touts its efficiency. Nearly all of what’s made goes out to customers with little leftover, according to Gregg.
The plant stocks only about half a million dollar’s worth of inventory at a time, he said.
“We don’t have a highly complex manufacturing process,” Gregg said. “It’s highly controlled.”
The company is bigger on chemistry than manufacturing. Customers do most of the heavy lifting, applying SDC’s coatings to any lenses and other products.
“We just provide the juice,” Gregg said.
That means SDC doesn’t pay a lot for workers’ compensation insurance, according to Gregg.
“This is as much about science as it is black art,” he said.
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There Goes the Neighborhood
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SDC headquarters: condos going up next door |
SDC Technologies Inc. is getting new neighbors,thousands of them.
After more than two decades in an industrial part of Anaheim known as the “Tile Mile,” change is happening all around SDC.
Right next door, San Diego-based Nexus Properties Inc. is nearly done with Stadium Lofts, 400 condominiums with a parking garage and restaurant.
Across Katella Avenue, industrial buildings have been cleared to make way for Miami-based Lennar Corp.’s A-Town project, which is set to have some 4,000 homes, including some 14 condo towers.
“Our primary concern was safety to our employees and to minimize the disruption to our business,” Chief Executive William Gregg said.
SDC has been at the Anaheim site since 1989 and leases its building.
The company renewed its lease before the massive Stadium Lofts project started next door, Gregg said.
Businesses such as SDC are concerned that putting homes alongside plants and warehouses could cause headaches.
“We would have that same concern for any manufacturing operation where the zoning has changed and we now have residential neighbors,” Gregg said.
The fear: generators, trucks or other noise might keep residents awake, sparking complaints to the city. That ultimately could bring restrictions on operations or force some businesses out entirely.
SDC may consider moving, Gregg said.
“We have three years left on our final lease and will be looking at our options early next year,” he said.
The company has worked with the city and the developers to address potential impacts on workers, customers and operations, Gregg said.
“The process worked well considering the magnitude of the project with the number of trade workers on site,” he said. “The developers did follow through on resolving any issues.”
Manufacturers near John Wayne Airport in Irvine face a similar situation as the city adds homes and shops alongside businesses in the Irvine Business Complex.
,Sarah Tolkoff
