Reckitt & Colman PLC

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Reckitt & Colman PLC

One Burlington Lane
London W4 2RW
United Kingdom
(01) 994-6464

Public Company
Incorporated: 1954 as Reckitt & Colman Holdings Ltd.
Employees: 21,700
Sales: £1.39 billion (US$2.51 billion)
Stock Index: London

Reckitt & Colman foods, household products, and pharmaceutical goods are familiar to grocery shoppers worldwide. The London-based company specializes in developing novel applications of food technology and creating or acquiring high-quality products, continually extending the range of its wares for a geographically expanding market.

Three sets of roots have given rise to Reckitt & Colman. The companys evolution has been gradual, marked with repeated attempts to graft the stems together. At a watermill in the English countryside near Norwich, Jeremiah Colman began milling flour and mustard in 1814. The business was named J&J Colman nine years later when the childless founder made his nephew James a partner. When they outgrew their first mill at Stoke Holy Cross, Norwich in 1854, the Colmans built the first mustard mill in Britain at Carrow, Norwich. They added mills for wheat flour, starch, and laundry bluing at the same location. Today the same site houses Reckitt & Colmans U.K. food division.

The Colman line continued to flourish, and expanded again in 1903 with the purchase of Keen, Robinson and Company, a food company that had been in business since 1742. Keen, Robinsons products included mustard, spices, and foods for infants and invalids like Robinsons patent barley and groats.

Entry into the starch business had brought the Colmans into rivalry with Isaac Reckitt, a starch manufacturer. Reckitt had started out in business in 1819, milling flour at the Maud Foster Mill in Boston, Lincolnshire. The mill and the flour business were both left behind in 1840 when he bought Middletons starch works at Dansom Lane, Hull. This business was a success, and he soon made his sons partners and added new products. Washing blue and blacklead for polishing grates were both added in the 1850s, and synthetic ultramarine for bluing was added in 1883.

The Reckitts formed a private company, Reckitt & Sons Ltd., in 1879, and went public in 1888. Reckitt & Sons saw diversification of its product lines as the key to further growth and moved to diversify both through in-house development and through the acquisition of interests in companies with similar products. The introduction of Brasso, a new metal polish, in 1905 led to the acquisition of several polish producers. Reckitt & Sons bought Master Boot Polish Company and the William Berry Company in 1912 and the following year joined Dan and Charles Mason in establishing the Chiswick Polish Company. Reckitt & Sons held equal representation on the board with the Masons as well as a significant share in the company.

Reckitt & Sons continued to add new products related to its original line, even through the difficult years of World War I, and throughout the following decades. In the 1930s, with the addition of a germicide, they began to add pharmaceutical products.

The third branch of Reckitt & Colman began to take shape in 1886, when the Mason family began the Chiswick Soap Company. A producer of soft soap and polishes for metal and furniture, Chiswick received some early complaints about air pollution, but these didnt deter the company. Cherry Blossom shoe polish was added in 1906, and a floor polish called Mansion was added about a year later.

Although the Chiswick shoe polish business did well in Britain, the company had a formidable rival for overseas business: the Nugget Polish Company Limited. When Nugget and Chiswick had to compete for allocations of turpentine during World War I, they decided to pool their efforts. In 1929, they merged to form Chiswick Products. The new company was owned jointly by the Nugget Polish Company and the Chiswick Polish Companyin fact, the success of this merger was a model for the merger of Reckitt & Sons and J&J Colman in 1938.

The merger of Reckitt & Sons and J&J Colman was the culmination of efforts begun many years before. In 1913 the two companies had stopped competing with each other for business in South America by forming a joint company, Atlantis Ltd., to penetrate the South American market. Atlantis was so successful that they decided to unite all of their overseas businesses. Finally, Reckitt & Colman Ltd. was formed in 1938 to hold and manage Reckitt & Sons and J&J Colman, although the two companies still kept separate identities and positions on the London stock exchange.

During World War II, the companies struggled to survive supply shortages, manpower problems, and the damage done by bombings. After the war, efforts began anew to bring them together as a single entity. In 1954, a merger of the Reckitt and Colman companies established Reckitt & Colman Holdings Ltd. Later that same year, Chiswick Products became part of the organization.

The newly organized company began to concentrate its efforts on developing new business in Europe and North America while it also continued to expand its markets in other parts of the world. A major concern in the acquisition and development of new companies and products was the preservation of the high quality that had won Colmans Mustard the Legion of Honor Award in Paris in 1878. Another major aim was to continue strengthening brand-name recognition.

As the company grew throughout the 1960s and 1970s, a number of reorganizations were necessary to accommodate the addition of other types of businesses, notably in the leisure industry. But the company maintained its identity as a manufacturer of brand-name foods, household products, and pharmaceutical items to the world market. At times the rapid changes gave rise to speculation about the direction the company would take. Comments in the press referred to Reckitt & Colman as a sprawling company ready for restructuring because of the weaknesses in leadership brought about by the imminent retirement of both its chairman and vice chairman. Although the companys overseas business had grown to more than 70% of its total trade, only one foreign subsidiary, R.T. French, U.S.A., had a representative on the board.

In the 1970s Reckitt & Colman established new divisions to increase production efficiency and improve communication. This reorganization took two years and was described in the press as a period of abrasive reform, but it succeeded in focusing the companys efforts on a planned expansion program. During the early 1980s Reckitt & Colman embarked upon a carefully executed program which resulted in the expansion and streamlining of the company. This program included the development of innovative products, such as a dual-purpose toothpaste introduced in 1981 to clean both dentures and teeth.

Reckitt & Colmans position in North America was strengthened greatly by its 1984 acquisition of Airwick Industries, a manufacturer best known for its air fresheners, and the 1986 acquisitions of Durkee Famous Foods, a food producer, and Gold Seal, a manufacturer of laundry aids and bath additives like Mr. Bubble. Reckitt & Colman was widely criticized for overpaying for Airwick (its purchase price was almost 40 times earnings), but within the year, Reckitt & Colman had turned the underperforming Airwick around.

Also in the early 1980s, Reckitt & Colman plowed much of its U.S. profit back into household product development following the successful but very costly launch of Bully bathroom cleaner. But the basic products from which the innovative variations have been developed continue to be popular. For example, Frenchs mustard, made by Durkee-French in the North American group, continues to be the best-selling mustard in American grocery stores.

Also as a part of the streamlining program, Reckitt & Colman sold its unprofitable U.S. leisure-industry businesses and, in 1985, it sold its U.S. potato-processing business. And in 1988 the company sold its North American olive, cherry, and caper business. These sales helped channel the companys resources into lucrative areas more closely related to its brand-name products. The one major exception to the companys streamlining strategy, a small group of fine arts, graphics, and pigments companies, has been consistently profitable.

In 1989 Reckitt & Colman continued to expand in the personal-care field, buying Nenuco, a Spanish babycare company. This acquisition also meshed with another of Reckitt & Colmans goals: preparation for the unification of Europe in 1992. In July, 1989 the company became one of the first British companies to announce a major restructuring to accommodate the continents internal market.

Under the plan, responsibility for production and marketing of certain products will be divided between facilities in the United Kingdom, West Germany, France, and Spain. For instance, all of Reckitt & Colmans metal polishes will be manufactured in Spain when the rationalization is complete in 1991. The reorganization is expected to lead to the discontinuation of a number of lesser brands as the company seeks to establish a unified identity throughout Europe. Innovative development, judicious acquisitions, good management, and consumer responsiveness (many Reckitt & Colman products are the result of extensive consumer research) have allowed Reckitt & Colman to continue growing in a low-growth industry and should contribute to its success in the future.

Principal Subsidiaries

Reckitt & Colman Products Ltd.; Reckitt & Colman (Overseas) Ltd.; Reckitt & Colman Australia Ltd.; Reckitt & Colman South Africa (Pty.) Ltd.; Reckitt & Colman (France); Representacoes Reckitt & Colman Brasil Ltds.; Reckitt & Colman Inc. (U.S.A.).

Further Reading

Reckitt & Colman: A Brief History, London, Reckitt & Colman, 1988.