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CEO Letter Series: MAPEI

July 19, 2011


Dear Colleagues:

Original predictions that the current economic recession would last well into the twenty-teens (2014-2015) seem to be holding true. To paraphrase a diagnosis often made by emergency care physicians: “We have stopped the bleeding, but the patient’s recovery is moving very slowly.”

MAPEI Americas has implemented several measures to position the company at the top for existing and future market share. Company-wide efforts to develop inventive new technologies help supply our customers with time- and money-saving products. We, like all manufacturers in our industry, continue to face scarcity of raw materials in addition to sky-rocketing prices, but astute supply chain management has helped contain materials costs.

Taking advantage of the opportunity to grow wherever possible, MAPEI Americas has begun to expand its Concrete Restoration Systems line. We have been able to combine the experience of our R&D group in Italy with the work of researchers at our R&D Centers of Excellence in the Americas to produce innovative formulations for American products, allowing us to grow the MAPEI brand quickly in this business category. We are using similar strategies to enter other markets that will give us revenues from entirely new sources.

In addition, MAPEI Americas is expanding geographically. The recent opening of a regional distribution center in Queretaro, Mexico, has already tripled sales for MAPEI in that country. An analytical assessment of market economics in South America has led to increased efforts to develop new customer bases in this locale, too.

Another area where MAPEI has established plans for new growth is in the expansion of existing facilities, such as the major expansion presently taking place in Brampton, Ontario, and the smaller expansion in Laval, Quebec. MAPEI has just completed the purchase of a site in New Jersey, and plans are underway to build a larger plant to replace the original facility in this state. Newer, more modern plants are also on the drawing board.

In tough economic times, customers frequently must choose price over brand loyalty. MAPEI is flexible enough to meet these challenges by offering a large selection of products with a wide range of price points. We have also developed synergies with our sister subsidiary, Polyglass. We have been able to recognize economies of scale through joint purchasing, marketing and other corporate functions; and we have also benefited from cross-selling opportunities with each other’s larger customers.

In conclusion, MAPEI Americas views the future in a positive context. In the next two years, the construction industry should finally see a lasting turnaround in the economy. We are prepared and positioned for a slower, smarter return to steady market growth that will yield a solid revenue and profit stream for MAPEI, our distributors and our customers.

Thank you for your business.


Sincerely,

Luigi Di Geso
President and CEO, MAPEI Americas

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