Up Close with Walter Stucky

September - October 2003

Up Close with Walter Stucky
VEKA CEO Speaks Out

by Debra Levy

It takes a few minutes to realize that Walter Stucky is the man at the top. His quiet, unassuming manner is disarming, yet effective. The 53-year old Stucky has just completed his 16th year in the United States. (See May-June 2003 DWM, page 42). By Stucky’s own account, VEKA’s presence in the states began as an idea “from nowhere” in 1983. Today it is a $175 million dollar employer in Fombell, Pa. It is part of a huge, worldwide VEKA organization which employs 800 people (in the United States and Canada) in seven companies located in four countries. He gave DWM his perspective on the company’s growth and the vinyl window business during our meeting in December.

Q—What are the greatest changes you’ve seen at VEKA in the past few years?
A—Our building is now more than 657,000 square feet, we employ more than 2,000 extrusion dies in our hemisphere and approximately 800 employees. When we started we had just 160,000 square feet, 18 employees and 18 extrusion dies.

Q—Let’s talk about the beginning of VEKA in the United States.
A—Originally, the company was set up as a 50-50 joint venture with Traco, a major U.S. window manufacturer. We quickly realized that our potential customer base was actually our partner’s competitors. That made it nearly impossible for us to get new customers and therefore the partners decided to have VEKA acquire 100-percent ownership. That happened in 1988, one year after we moved into our brand new, state of the art facility in Fombell, Pa.

In the beginning, vinyl didn’t get a lot of respect. It was a new “kid on the block” and mainly used as replacement material. But that changed quickly. People started asking for it, builders started asking for it and ultimately, even those who didn’t want to were forced to take it on because of its popularity. New construction quickly became a high volume market for vinyl and started to take big bites from the aluminum market.

Q—Is it difficult to report to a management team in another country?
A—I have lots of freedom. It always was VEKA’s owner’s mentality after establishing foreign entities, to give them the financial support they need to grow vigorously. The company also let them make their decisions about marketing and product development locally. In short, you may say, VEKA is all about “Thinking Globally and Acting Locally.” In our opinion, this is the only way how a foreign owned entity can be successful. If you don’t live here you don’t realize how different everything is. If visitors from our corporate office ask me “What’s so different between the United States and Europe?” My response typically is: “Let me rather tell you what we have in common, as this list is a lot shorter.”

Everything about the European vs. American markets is different. Houses in Europe are built to last centuries; houses here are built for decades, if that—they just don’t have the longevity.

The other big difference is in liability issues. That’s a big concern in the United States. Just look at all the litigation involving “mold growth,” due to water infiltration between the window and the walls. It is really not a window performance issue, it is an installation issue. But the window manufacturer who built the window still gets drawn into the litigation, whether he installed the window, or a builder installed it. You won’t find anything like that in Europe. It is a different mentality and thinking.

Q—Just about every CEO I’ve interviewed has had a “defining moment” early in his career, something that frames his thinking throughout his tenure. Do you follow any tenants based on an early defining moment?
A—You have to have quality. Everything starts and stops with quality. I learned early on that you never make a concession on quality, because it will only hurt you and your customers in the long run.

Q—How is the current economy affecting VEKA?
A—We will have another decent year as far as volume and growth is concerned. Unfortunately prices for raw materials are at a high level, with no relief in sight. That puts a strong squeeze on our margins.

Q—Let’s talk for a minute about the evolution of your products. How have they changed?
A—For the past 16 years, we’ve taken weight out of product. We’ve made them lighter and lighter over the years. We now see this trend reversing. Putting more material in the product can help eliminate problems. When you weld thin-to-thin, the chance for problems is greater. The heavier materials help us eliminate service and warranty issues, which are costly, so weight is not necessarily a bad thing.

Q—What’s coming in the future?
A—Our big growth areas are fencing, railing and decking We have a number of new fencing products such as “VEKA Blue inside” which lets everyone identify our products instantly.

Q—Any fads you think won’t stick?
A—There’s been a lot of noise about cellular foam profiles, composite materials, pultruded products, etc. but the economics are not there yet. For now, it’s just a marketing spiel, as everyone tries to differentiate themselves, at least to some extent.

Eventually there will be new materials that beat vinyl, but not during my career. While this is in the future it’s not here yet. Vinyl has advantages that cannot be duplicated by other materials.

Q—What do you think your customers’ biggest challenges are?
A—To continue to exist in a market where pricing has eroded and where traditional delivery times of five to six weeks are now considered too long. They have had to move from a five-week delivery to five-day delivery cycle. They have to succeed in a service economy by providing a defect-free product quickly.

Q—So what advice would you have for them?
A—1. Choose what you do well and profitably and concentrate solely on it; 2. Do it right the first time; 3. Work the process. Feed it properly throughout.